If you are planning and want to start your Startup venture, several queries might trigger your thought process. Some countries are progressive in offering flexibility, government funding, and Startup support, while others are yet to welcome the Startup revolution with an open arm.
It is important to understand what is a Startup Incubator as these Incubators help to shape ideas and mold ideas for budding Startup founders like you. India is the emerging home for Startups, and several of the Indian Startups have scaled internationally, becoming Unicorn eventually. It is the farsightedness of the Indian Startup community, along with the support of the Government of India. Startup Incubators in India have grown leaps and bounds. The Indian Incubator network is well diversified and spread across regions and states, helping regional Startups to scale big.
What is interesting for you to note is that India is home to plenty of incubators and enablers, starting from state-backed incubators to private Incubators; Indian Incubators have it all for you.
On that note, let us address and understand the Startup Incubators and their purpose.
What is a Startup Incubator
As more and more Startup enthusiasts and founders like you draft their business plans and create their businesses, the need for a Startup Incubator emerges. Now the pertinent question is What is a Startup Incubator?
You can understand a Startup Incubator as a collaborative and well-knitted program designed to help Startups like yours succeed. A Startup Incubator helps entrepreneurs like you solve some challenges and issues like raising seed funding and running your venture successfully without any roadblocks. Incubators also offer training and mentoring as a part of their extensive service offerings. All being said, the sole purpose of a Startup Incubator is to help you grow your Startup venture.
These are uniquely designed programs for Startup ventures to scale their operations at a lower cost in their initial years of operation and early stages of Incubation. Suppose you wish to avail of Incubation services. In that case, you must enroll by filling out an application form with the intent to commit a specific amount of time to the Incubation process.
Process of Business Incubation
Firstly if you are keen to enroll in a business incubation program, you must signup by filling out the enrolment form. Once you apply, you must wait for the incubators to accept and officially onboard you into the program. Multiple and plethora of incubators are available to choose from depending upon your need and requirements; you may select one such Incubator. Each Incubator has a uniquely designed program and a unique application process different from other incubators. The standard process of Business Incubation is as follows:
1. Applying: Once you have principally decided to enroll, you must fill out the form and spill out the answers to the questions drafted in the application form. Some of the questions mentioned in the form pertaining to your Business and you as your startup founder. Moreover, a few incubators may also want you to furnish a detailed business plan for your Startup.
2. Interview: The next step in the process of business incubation is interviews. These interviews generally happen over a brief video call. The interview is designed to be short and crisp so that the interviewer can quickly learn and gauge more about your Startup.
3. Spill out a decision: The time it takes for the Incubator to arrive at a final decision may vary. However, needless to worry, these decisions are pretty quick. It hardly takes a week for the Incubator to respond to you, thereby offering you an acceptance decision. Moreover, raising funds and funding rounds may also form a part of the process of business incubation, but it also varies from Incubator to Incubator.
Examples of Business Incubator
It is quite appealing to know that Business Incubators have been around since India became independent in the 1950s. Over the years, Business Incubators have evolved exponentially into several forms in varied capacities. However, the sole purpose remains to promote growth and foster Startups. Here are a few Examples of Business incubators that you can consider.
- Academic and Knowledge Institutions: Knowledge and Academic Institutions are one of the best Business Incubators you can think of, run by Universities or institutions affiliated with universities. Many of these Academic Institutions Business Incubators primarily work with students from universities, and some also accept cohorts of Startups like yours. No better place than a University to go back and enroll yourself in a Startup mentoring and incubation session.
- Government and Non-Profit Agencies: If your Startup venture focuses on public welfare or caters to public initiatives, enrolling with a Non-profit or Government incubator seems to be a better option. These government and non-profit incubators tend to stimulate economic growth and development of the social and public welfare sector.
- Companies or Conglomerates: Many leading companies or conglomerates also start incubation initiatives for Startups in a similar space and cover different sectors and industries. The Business Incubation platforms started by these large companies can also have a structure to fund and help raise several series of funding for Startups. Some of the other offerings are to develop technology, networking, mentoring, etc. It will surely benefit you in several growth stages of your Startup.
- Venture Capital firms: Several leading Venture Capital firms start Business Incubators to help emerging Startups. They predominantly invest in your Startup and take an equity stake, offering full-fledged guidance, advisory, mentoring, and further funding rounds along with the program. These VC firms may look at it as an investment opportunity as a part of the Incubation program.
What is the role of an Incubator in a Startup?
By now, it is well understood from our discussion so far that Business Incubator creates value as it combines your entrepreneurial drive with the resources available at the disposal of these Business Incubators. Incubators provide extensive research, help create employment opportunities in the local arena, and strengthen technologies.
Moreover, Incubators provide you with office space, legal and technical expertise and support, mentoring, drafting your initial business plan, and advising your Startup on intellectual property. Incubators also provide administrative support and help your Startup to raise funds at a competitive rate better than the market, etc.
Hence you need to know What is the role of an Incubator in a Startup
- Incubators guide your Startup Company in matters related to how to function well with already established companies in the business world
- Incubators handhold your venture in framing and knowing the basics of the sector or your core business.
- There are a plethora of networking opportunities available through Incubators.
- Incubators, irrespective of the type or the sector they serve, help you to save on marketing costs.
- These Incubators conduct market research and provide marketing assistance.
- Incubators bridge the gap between investors looking to invest in Startups and Startups seeking to raise funds.
- Incubators connect your Startup with influential people in Business, representatives from ventures and companies already big in the business world.
- Incubators provide easy access to public financing, loans from banks, and guarantee options, speeding the fundraising process.
- Incubators act as mentors and advisors on the advisory board of your company.
How to start a Business Incubator
India is a host of well-known Incubators. Some of them are funded by the Department of Science and Technology, Government of India, giving you access and easy reach to the stalwarts of the Industry. The well-known Incubators are the Indian Institute of Management, Ahmedabad (IIM A), Indian Institute of Technology, Bombay (IIT B), IKP Knowledge Park, Hyderabad, etc. India boosts more than 50 Incubators across the length and breadth of the country.
The central question still lies, How to Start a Business Incubator? Let us understand the mechanics behind starting an Incubator
Step 1: Selecting the model of the Incubator: The first step while starting an Incubator is to decide on the model. Internal corporate Incubators are the most common ones. These Incubators are internal to an organization within the four boundaries of that organization. It promotes intrapreneurial culture and offers equity stakes as founders of the company. Other models of Incubation are external Incubators, Accelerator models, etc.
Step 2: Selecting the type of Industry to serve: Each Incubator focuses on and specializes in one particular Industry or sector. Some Incubators may focus on Fintech, and others may focus on fashion, healthcare and lifestyle, EdTech, Technology, IteS, etc. Irrespective of the industry focus, Incubators nurture the growth of Startups in their entire journey.
Step 3: Deciding upon the length of the Incubation program: Many corporate Incubation programs generally last for 3 months, yet they do not follow a strict duration. Some Incubation programs run for one to two years, including several workshops, seminars, simulations, etc., uniquely designed. The duration of the program may be mostly need-based depending upon the dynamics of the sector it serves.
Step 4: Selecting the participant: The next important step in the process is to select a viable and eligible participant for the Incubation program. It varies depending upon the sector, focus area, and changing business dynamics. Moreover, hosting a participant also depends upon the Incubator’s support structure and mechanism.
If you are worried about finding the right Business Incubator for your Startup, which shall act as the launch pad for your Startup, the worry is over. Tyke Invest does a phenomenal job is bridging the gap between Startup founders looking for the right community to mingle with and the investors looking for the right set of promising Startups. Tyke Invest clarifies all your queries in terms of investment structure and technique.
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