Incubators sound like a really good idea for every startup. You get access to office space, business education, people, funding and opportunities. But not all incubators are created equal. Finding the right one for your business requires some extensive research to ensure that your company’s needs and objectives are met.
Validate the incubator
… make sure that the incubator that you have just found is not just a co-working space in disguise.
Start off your research by making sure that the incubator that you have just found is not just a co-working space in disguise.
Beyond providing office space and standard office facilities, see if they can support startups in other ways, such as providing business services, access to investors and training programmes. Also, check their portfolio, alumni, mentors and track records.
Industry-specific or general?
Industry-specific business incubator has the expertise and structure to help you grow fast. The niche incubators may even provide costly, specialised tools, such as 3D printers or lab equipment, that may not be readily accessible to startups.
A general incubator maximises your exposure to as many different types of businesses as possible within the same space. However, with well-connected incubator management, even industry-specific incubators can be connected to complementary businesses outside the incubator.
Ideally, the team behind the incubator should have some experience dealing with your industry.
Find out the team behind the incubator. Are/were they successful entrepreneurs? Do they have the experience to provide your business with what it needs? Ideally, the team behind the incubator should have some experience dealing with your industry.
If the management behind the incubator is a school or an agency, then ensure that they have some experience with your industry or are at least able to bring in mentors that can help you along. Otherwise, at least check that they have helped several startups achieve success.
One of the most valuable aspects of being in a business incubator is mentorship. A good incubator proactively connects you with successful entrepreneurs in your industry to guide you.
Look deeper into each alumnus and judge for yourself if the incubator played an instrumental role in its success or failure.
Checking on an incubator’s track record is the quickest and dirtiest way to determine if it’s a good one. Many incubators showcase their portfolio on their website. Just do a quick google search on a few of their portfolio members to see how they are doing. The incubator should be fine as long as they have more successful cases than failed ones.
But keep in mind that a company’s success isn’t entirely the responsibility of the incubator. Many businesses come and go. Look deeper into each alumnus and judge for yourself if the incubator played an instrumental role in its success or failure.
Chat with the alumni
If you really want to know more about what goes behind the scenes, contact a few alumni and have a chat with them.
Check to see if the incubator has other affiliates and partners as well.
Looking at their alumni list is a good way to see if they can get you connected directly to the people you need. Visit the LinkedIn profiles of the management and mentors to see who are the people within their networks. Check to see if the incubator has other affiliates and partners as well.
Ensure that it is on stable financial grounds before you commit.
Find out the source of the incubator’s funding, especially if the incubator is relatively new. Ensure that it is on stable financial grounds before you commit. Otherwise, when the incubator collapses, it will disrupt your business and may set you back.
Incubator facilities and services
Ideally, your chosen incubator should have the resources to support your business activities. It should have basic amenities (such as internet connection, printers and meeting rooms) and services (such as accounting, legal and marketing services).
What do you have to give up?
Many incubators are businesses themselves. Some may ask for a low monthly fee, while others may ask for equity. Think about what you can afford and what you can give up carefully.
Besides financial costs, you’ll have to spend time going through the incubator’s programmes and fulfil some requirements. Find out how much time you’ll need to commit and consider the impact of the time loss on your business.
Before committing to an incubator, consider if you should even be in one. Read about the pros and cons of joining an incubator.
Featured image by Alison Burrell