TLDR

  • Structure - Incubators offer startups an open-ended, flexible environment in which to build the foundations of a startup and subsequently grow.
  • Investment - Incubators do not typically provide seed investment but provide a number of other financial benefits/cost savings e.g. free/discounted work spaces & professional services, utilities, mentorship, education and access to investors.
  • Variation - Not all incubators are the same.

Incubators are usually non-for-profit organisations run by public and/or private entities that support entrepreneurs and startups build the foundations of a new company and/or help it grow. Whilst some incubators are independent, some are associated with VC firms, universities, angel investors, major corporations or government bodies.

An incubators’ purpose is to help fledgling startups innovate and grow. They typically provide free/discounted work spaces & professional services, utilities, mentorship, education and access to investors.

Unlike accelerators, incubators follow a less rigid schedule and can be customised to a company’s unique needs. As a result, the duration of the incubation process will depend on a company’s needs and, generally, a company will stay in an incubator for as long as it takes for the company to reach a sustainable level. Whilst this can occur in as short as one year, this typically takes place over the course of several years.

Incubators do not usually provide seed investment like accelerators. However, they can still be a useful resource for startups looking to raise capital, be it through cost-savings (which can serve as a type of investment), warm introductions & direct solicitation to investors, or pitch practice & deck guidance (ensuring you have a business plan and company worth investing in).

Not all incubators are the same. Depending on their model, some are for-profit whilst others are not-for-profit; some operate in a physical space requiring in-person attendance whilst others operate on a virtual basis; some serve particular industries, academic programmes or groups e.g. female-founders or underserved demographics; and some provide seed funding whilst others provide little to no financial investment. It is, therefore, sensible to find an incubator that suits your company’s requirements.


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