Starting a company is both exhilarating and challenging. And it can be overwhelming without help and guidance from people who have already done it successfully. It is also very easy for unsuspecting first-time founders to be misled by the hype often surrounding innovation and entrepreneurship.
Sadly, startup failure rate is above 90%. That's a scary statistic. But data shows that founders who receive help when building their startup have a higher chance of success and growth as well as attracting additional investment.
Enter the startup incubator. Startup incubators and accelerators provide founders with assistance and help to guide startups. Top benefits include:
- Focus on strategies that have the highest impact on growth
- Create customer acquisition channels that scale cost effectively
- Develop sustainable business models and revenue sources
- Get venture funding
- Make connections with key partners and acquirers
There is a lot more you can get from joining an incubator. However, the main aim is often to make the business valuable and attractive to investors. But getting accepted to an incubator or accelerator isn't simple. In this article we break down the steps to apply and get accepted to any of the 1000+ programs around the world.
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What You Need to Know Before Joining An Incubator
If you think you're ready to apply to an incubator or startup accelerator, then you're ready to take certain steps. Read on to see what it takes to get accepted.
Application Procedure
To be accepted into some of the best incubators, your startup has to meet certain measures mainly because such incubators tend to be selective and mostly approve startups that are in their early stages. A startup is required to provide its business plan when applying to join. The business plan can either be in the form of a document or potentially innovative ideas that promise development in certain sectors.
On some occasions, incubators will only accept startups that have been referred to them by a member of a network of incubator advisors.
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Objective
Incubators support innovation, new ideas and push startup businesses to come up with market solutions. This way, they encourage new entrepreneurial ideas and innovative outcomes; this is how ideas are incubated to design business models. They help nurture and guide entrepreneurs for a certain period to assist them in devising a startup.
Tenure
Joining an incubator provides you with access to a long-term support system that promotes development for your startup. The tenure can be between 6 months and over a year; this depends on the time it takes for the entrepreneurs to gain investors or get their ideas or products working.
Investment
New upcoming startups usefully don't need immediate investment. Therefore incubators often offer support without necessarily investing or having a claim to equity in the businesses; this is mainly because most incubators are usually sponsored. They are therefore capable of providing support without relying on financial earnings from the startups.
Standing
The majority of incubators are open to all types of entrepreneurial ideas, as long as it involves promising industrial development concepts—however, some focus on a specific industry. An example of this is incubators that deal with pharmaceuticals; they can only take in startups that offer development in medical issues.
Additional Benefits
Joining a good incubator means you will have the most extensive support you could wish for when starting a business or creating a new market. You can expect a boost in credibility, mentorship, and even the provision of working space. However, not all incubators offer the same services; you may need to choose between the various ones available to pick the one that suits you the most.
Incubators offer shared office space to maximize the amount of support provided. This helps them monitor progress and provide constructive input. Aside from that, they focus on providing the startups with connections to communities and recent developments and help you stay informed about potential threats.
Once you join an incubator, you will have all means to help boost your company's presence in the market. You will have access to investors and receive the guidance you need.
Why Join an Incubator?
Startups that have been involved with an incubator have an advantage in terms of built networks and mentorship. There's also a high chance for such startups to succeed in their ventures. You just need to know the right time to join; it's recommendable to join as early as you can as long as your business plan is well defined.
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How Can You Apply and Get Accepted?
It's highly required for upcoming businesses to associate with incubators; this is steered more by their desire for growth in their respective industries. So what do you need to be selected? Let's look at how you can ensure your application earns you a seat at the table.
First, you need to understand your project or product fully. You have to be able to lay out what problems your products and services are solving, how they will solve them, and whether or not you have the right team for the job. Once you have the answers to these questions, you have a chance at being accepted by an incubator that will help boost your ideas to a higher level.
Generally, there are three categories of ideas that can help prepare you for your presentation and which can determine your selection; such categories include:
- Revolutionary Ideas: Can forever change the industry once introduced to the market
- Evolutionary Ideas: These are improvements made upon an already existing service or product that guarantee improvements that will take them to the next level
- Other Ideas: An ordinary idea but with the potential to make money and profit. However, incubators tend to look for ideas and businesses that fall under the first two categories.
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To be selected, you need to be prepared. Here are the top things to focus on before you pitch.
Make Sure Everything Is In Order
Before joining an incubator, you need to ensure you have established your business to some degree. This means leaving no stones unturned, which requires you to take care of all the legal needs and consult trusted advisors. Ensure to take care of the basics in terms of agreements with potential customers and investors.
If there are other partners, it's good to have an operating agreement. Ensure all your legal needs are catered to, such that when you join an incubator, you only focus on growth and mentorship, not legality issues.
Calculate Your Value
While starting your venture, you may not be fully converting to many financial aspects of your business. However, it's important to practice and familiarize yourself with the financial perspectives of your project; doing this prepares you on how to employ the incubator resources that will enable the growth of your venture.
Although incubators can help you learn about this aspect of business, it's always best to be prepared.
Assemble a Capable Team
When you apply for a position in the incubator, they will need to know whether you have the proper team to execute your ideas, provided you are given access to the resources required. You don't necessarily need to have a whole team of staff; however, you may need a number of dedicated team players that have the potential to yield results and offer project solutions when needed.
Network
Incubators can help you gain funding as well as new investors; however, you need to establish a presence in order to be the viable candidate for such resources. Building your presence within platforms such as Linkedin can be beneficial. This will help you start an early connection with advisors and mentors, providing you with your own network before joining an incubator.
Last Scoop
Positions in an incubator are often coveted; therefore, you have to boost your eligibility by doing a bit more work than the average applicant. Demonstrating you are capable of employing the resources you will receive into stimulating the growth of your startup gives you a better chance of being accepted.
Keep in mind the more prepared you are for a program, the higher your chances are of succeeding. The above guidelines are meant to help you efficiently prepare for an incubator and to better your chances of getting into one.
