Selecting The Right Startup Incubator
The technological innovations have made it easier to raise capital, find and manage new customers and streamline operations. Because of this reason, there has never been a chance and a better time to start a company. With this startup incubator, it became easy for anyone to take up responsibilities.
It might be said that entrepreneurship has entered a golden age in the recent years. The report of the Global Entrepreneurship Monitor(GEM) estimates more than 100 million new business are starting every year.
The capital shortfall, having a wrong team in place, a lack of focus and unattractive unit economics are some of the reasons why startups fail. It’s not any easy task to overcome these kinds of shortfalls and obstacles. However, for some startups, participating in an incubator or an accelerator can mean the difference between laying the foundation for a sustainable business and heading back to square one.
Individual incubator programs can vary hugely according to the industries they cater to, the type of educational and mentoring services offered. It also includes the degree of expertise the program leaders bring to the table. The essential thing to choose the right incubator is to understand how individual incubators align with your company’s need.
2. Observe Mentorship:
Right community in place makes a difference in outcomes for startups. One of the reports found that the depth of an incubator or accelerator’s mentoring community is linked to the overall success rate of the program. Founders should pay more attention to the number of mentors participating and also who those mentors are. Ideally, in a setting, the experience and track record of a program’s mentors should be reflective of the industry. That industry should be the one in which your company is in.
3. Fix the Perfect Time:
If you choose a wrong incubator, it becomes the first mistake. Entering the incubator in wrong time make it the second one. Apply too early and you may be at the right time. This happens if there isn’t enough traction for the incubator for your company to work with. You have to wait until you have already established your network. Or you are already generating substantial revenue. Then you may find that an incubator simply doesn’t hold as much value.
4. Refine Your Company’s Story:
Part of getting accepted into an incubator program is selling the acceptance committee in your company’s merits. Here, a finely tuned narrative comes. To get started, first, think about what you want to accomplish and the problem that your company addresses. Then reflect on your company’s history. Check for any obstacles to overcome to bring out your startups with good result.
5. Consider The Equity Dynamic:
While entering an incubator or accelerator, founders need to be prepared to part with a certain amount of equity. The amount of equity differs from program to program. An incubator allows you to leverage its network and resources in exchange for equity. Some also provide a small amount of capital.
If your business doesn’t need a substantial amount of capital to grow, you may be more sensitive to dilution. Maintaining an up-to-date cap table simplifies tracking of ownership stakes.
6. Establish your startup’s foundation:
Incubators are selective for a reason. They want to work with startups that have more than just a good concept. This means that your idea has to be viable and even related to the market. Also, it must be supported by a team of knowledgeable and passionate people. They should have a plan to bring it to life. You must be able to present a strong team with a proven track record in business, relevant education, and experience to back up. This makes it much easier to include your case in an incubator.
7. Asking Referral:
In the startup world, the only thing you know is “Valuable currency”. Make sure to have a right connection to concentrate on your entry into an incubator. Look at the people who are in your network. Have acquaintance with a founder who has successfully navigated the incubator process. Grab a chance to work with one of the program’s mentors. If you have these relationships in the past, tap on them now to falsify new ones. It also helps to leverage in social media and online platforms.
8. Set right Your Pitch:
Finally, The last hurdle before accepting to startup incubator is to present the founder’s pitch to the application committee. The better you (founder) understand your company, your mission and your vision, the better you can craft a persuasive and effective pitch.
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