When the phrase “startup incubator” is bandied about in the office, there’s usually an equal mix of confusion and double takes coupled with knowing nods of assent. The concept, though, isn’t that hard to unpack if you take the words individually and see what they equal when combined.
How do startup incubators help entrepreneurs realize their ideas?
A startup incubator is a collaborative initiative—undertaken and sponsored by private and public sources—with the intent of facilitating startup success.
Typically referred to simply as “incubators,” these initiatives are designed to allow entrepreneurs the chance to more directly pursue their ideas without getting tied down with issues that prevent some startups from getting off the ground.
Incubators are frequently conducted and financially sponsored by business schools attached to universities, other academic institutions, and even private actors interested in solving a real-world or practical problem being researched by an entrepreneur.
Example: Instead of tackling global problems and providing an incubator for entrepreneurs seeking to mitigate the world’s energy issues through green energy, many incubators are regionally focused.
The latter might, for instance, sponsor entrepreneurs looking to curb local problems rather than those who are researching issues that have a broader, international scope.
What sorts of tangible services do incubators provide entrepreneurs?
Startups can face a lot of problems getting their ideas launched, and incubators have developed strategies over the years to help entrepreneurs overcome many of these early hurdles.
That’s why incubators provide two main services designed to water the seeds, so to speak, and allow entrepreneurs’ ideas to fully blossom. These two services are providing seed (i.e., startup) money to defray early equipment purchases, for instance, and providing workspace accommodations.
On the latter note, many entrepreneurs are following national trends and choosing to work in coworking spaces. Why? Because they typically allow for more synergistic collaboration among entrepreneurs in similar positions, as well as access to mentoring and brainstorming opportunities.
Do incubators offer more nitty-gritty skills to help out startups?
Startup incubators can provide entrepreneurs—depending on their position and prior experience—with business and management skills, presentation skills, e-commerce solutions, better access to private loans, strategic assistance, and help with regulatory compliance in the entrepreneur’s particular industry.
Startup incubators can also provide skills as qualitative as better business etiquette and as tangible as legal counsel. Other skills may include assistance with negotiating patent filings and understanding the nuanced intellectual property issues they may face in the future as they develop into industry rock stars.
Incubators, in summation, can connect entrepreneurs with a host of professionals from the fiscal and legal sectors to help their ideas grow into thriving organizations. Startup incubators work with accountants, lawyers, and venture capitalists who are eager to get in on the next big thing.
In what ways are startup incubators and startup accelerators different?
The terms “incubators” and “accelerators” are often used interchangeably in business and venture capital circles, but there are some distinct differences that entrepreneurs and franchisees in co-working environments should be aware of.
The difference between the two, essentially, is that accelerators are shorter in duration, typically much more selective, and focused more on mentorship, while accelerators seek to compress, say, two years of business acumen into three to six months—no small feat.
Startup incubators are a different animal, according to the Harvard Business Review. Incubators don’t center around cohorts or mentorship as much as accelerators do, and they take in a wider range of entrepreneurs at different stages of development.
If hosting seminars and overseeing entrepreneurs hard at work in a coworking space appeals to you, check this out.