Startup Incubator: Choosing the Best One
Startup incubators can help you launch your business. In this entry, we’ll examine the best startup incubators in the industry with links for where to apply.
Before you hatch your ideas, you need to ensure they’re mature enough to face the world. The same way a bird egg needs a suitable environment to develop, your startup also needs the same incubated setting in its early stages. This is where startup incubators come into play.
What is a Startup Incubator?
Let’s first define startup incubator and what it’s supposed to do.
The word “incubator” is commonly associated with the hospital equipment that holds premature infants susceptible to all kinds of health risks. So, how does that apply to startups?
In the grand scheme of things, any business that just started is considered an infant in the industry. You can pretty much picture your startup as a dawdling toddler clumsily crawling on all fours, navigating its way in its new environment. And without a supervising guardian, the baby would find itself in very dangerous situations.
As you navigate your way around the trade industry, you’ll easily stumble on dire situations. Although it’s not surprising for startups to make mistakes, they can lead to fatality. Did you know that 90% of new startups fail? This is the reason why getting a mentor early on is crucial. And startup incubators happen to offer that and more.
A startup incubator helps early-stage startups succeed by providing them the necessary resources. The aid can come in the form of funding, workforce, mentoring, training, or workspace. Startup incubators are usually non-profit organizations, often affiliated with universities or business schools, that extend their startup incubator program to students, alumni, and the local community.
Benefits of Startup Incubators
How do startups benefit from startup incubators? Here’s a list of areas they can help you with:
Perhaps the perks of tapping into startup incubators, you have nothing to lose and everything to gain, financial-wise. Grants or universities usually fund startup incubators; hence, you won’t need to shell out large amounts for their assistance. Unlike other investment ventures, startup incubators only ask for a small percentage in equity in exchange for significant funding.
They offer advice to entrepreneurs to avoid mistakes in major decisions. While making mistakes is inevitable and part of the process, mentors provide advice from experience. They can help you better navigate and prevent certain mistakes in the future. You save up a lot of time, money, and energy with the right strategy and knowledge.
Means of funding or Upfront Capital
Although financial aid isn’t as hefty as other investor offers, startup incubators provide a decent amount of cash assistance. Their goal is to help you gain momentum in earning. Not only will they provide the seed capital, but they’ll also connect you with other investors to sustain your cash flow.
Lastly, startup incubators help you connect with important names in the industry. This is especially useful when you’re just starting as a company. You gain access to a network you wouldn’t normally encounter in early-stage business. Plus, they provide events and platforms where you can show off your product to potential investors.
Top Startup Incubators
Choosing the best startup incubator can be tricky, with several opportunities up for grabs. This is why we’ve narrowed it down to the ones with the most impressive track records. In no particular order, here are the most popular startup incubators:
1. Y Combinator
A trailblazer for startup incubators, Y Combinator has a track record to envy. The company is known for accelerating the success of several household names such as Dropbox, Airbnb, Weebly, and Reddit. Since its conception in 2005, they’ve funded over 2000 startups.
Twice a year, Y Combinator funds a group of new startups with $125,000. They acquire around 13,000 startup applications, eventually narrowing down the selection between 200 to 240 projects. The selected candidates will then undergo YC’s three-month training program that will culminate in an event called Demo Day.
Their incubator program provides seed funding, mentorship, and access to a large network of investors.
Techstars is a global network that offers its startup incubator program to over 15 countries. It has invested in companies such as Uber, DigitalOcean, and SendGrid. Since its operations in 2006, they’ve supported over 1000 companies worldwide. They’re also the ones behind the iconic entrepreneur events, Startup Week and Startup Weekend.
They offer a wide range of mentorship-driven accelerator programs worldwide. These are programs designed to fit specific requirements for various industries. They offer a 3-month mentorship program, consultations, working space, access to over $300,000 of cash equivalent hosting, accounting, and legal support, and access to a large group of investors.
3. 500 Startups
500 Startups is a worldwide venture capital company that’s helped entrepreneurs in over 75 countries. Since it was founded in 2010, they’ve funded and mentored more than 2,400 companies all over the world. They’ve built an impressive record of helping large-scale companies such as Paypal, Google, Facebook, Instagram, Youtube, LinkedIn, and Apple.
500 Startups offers global funds and thematic funds dedicated to either specific geographic markets or verticals. Entrepreneurs, all over the globe, can apply for their four-month seed accelerator program. Their mentorship training emphasizes growth marketing, customer acquisition, lean startup practices, and fundraising for seed companies.
Take note that the abovementioned names are only a few of the long list of active startup incubators. There are plenty more lined up in the US.
Choosing your Startup Incubator
The best startup incubators are the ones that fit your business needs. Before you start looking into those companies, you first need to establish what you’re looking for. Identify your startup’s weaknesses that need urgent support. You are especially prone to making mistakes when you’re inexperienced in the industry.
Once you’ve figured out what areas of your business need help, you can then start your search. Keep in mind that you have a lot of competitors. They will also try to claim a spot in the incubation program. And companies tend to filter their candidates due to the limited slots. Hence, you have to make an effort to stand out.
And another thing to note, most incubation programs end with a pitch event, so you also have to prepare your startup’s pitch deck. Make the most out of every opportunity as startup incubators can only take you so far. Remember, it’s still up to you to succeed.
Kickstart your Business
Launching a business isn’t easy. One of the main reasons startups fail is due to the lack of proper resources. This is especially common for tech startups that need specific expertise. As a startup owner, you can’t skimp on the workforce you hire to run your business. You need the best people to make the best products.
Full Scale offers a wide range of resources needed to launch and scale your startup. We have the best talents in the industry ready for deployment. You can hire a dedicated team of developers, project managers, QA specialists, creatives, and more!
Did we mention our founders are also veteran entrepreneurs who can help you on your startup journey? Matt DeCoursey and Matt Watson are angel investors who actively participate in startup programs. They offer valuable advice to aspiring entrepreneurs.
Interested? Talk to us!