Author Juan Fajardo
The increasing relevance of startups in the global economy and support by investors has made it easier than ever for startups to succeed in recent years. However, getting to the stage in which investors are able to notice and invest in your startup continues to be a challenge. This is where finding the best startup incubators can help new startups succeed.
While raising funding is certainly one of the biggest challenges every founder must face, there are many more concerns for startups looking to get off the ground. To deal with these, startup incubators have grown to become one of the most popular resources. These programs help founders succeed by offering guidance in the early stages of startup development, as well as getting ready to raise funding.
2021 set a new record for the amount of money invested by venture capitalists in the startup economy. With more than $621 billion invested globally in startups, last year represented the best year yet for the growing startup space. While Silicon Valley remained at the top, investors have started looking to other emerging tech hubs in the United States and abroad. Today, we will be taking a look at what startup incubators are, what they do, and why you should consider joining one if you are a founder. In addition to this, we will be talking about what are some of the best startup incubators. Let’s get started!
What Is a Startup Incubator?
Startup incubators are programs designed to help founders get their startups off the ground by providing support in a variety of areas. These services can range from providing you with a workspace to seed funding. This can greatly help you during the early stages while you get your business model up and running.
You will find that most startup incubators are focused on the tech industry and operated as non-profit. However, this is not necessarily the rule as the objectives of the incubator might differ depending on the organization that runs it. These organizations can be Universities and other educational institutions, or also coworking spaces of governmental entities like chambers of commerce. The duration of these programs will also vary depending on varied factors but ultimately, incubators seek to nurture startups during the early stages only. In some instances, you might be able to join an incubator even if you are still in the business plan stage.
What Services Do Startup Incubators Offer?
That depends. The services that a startup incubator offers its participants will vary depending on the organization running it, the industry, the startup, and a lot of other factors. However, most of them offer basic services that are likely to apply to most startups in the early stages. These services and benefits include:
Training programs
Networking
Legal counseling
Seed funding
Marketing assistance
Financial assistance
Strategic partnerships
Mentoring
Providing workspace and equipment
Business counseling
Training programs
Networking
Legal counseling
Seed funding
Marketing assistance
Financial assistance
Strategic partnerships
Mentoring
Providing workspace and equipment
Business counseling
As you can see, startup incubators offer a lot of benefits to those participating in them, which is why most startups try to take advantage of them. This high demand makes applications be extremely competitive, with the difficulty increasing exponentially for the best startup incubators.
What’s the Difference Between an Incubator and an Accelerator?
Many founders make the mistake of confusing incubators and accelerators, which is a mistake that can cost them joining either. While incubators and accelerators are both great opportunities for growing startups, they both serve different purposes.
As we said before, incubators are intended to help founders build their startups from the ground up or while they are still in the product-development phase. Startup accelerators, on the other hand, are intended for early-stage startups that are already operational and count with a minimum viable product.
As such, it is possible for a startup to graduate from an incubator just to join an accelerator program… but not the other way around.
How Can You Apply to a Startup Incubator?
We are sorry to say that once again, the answer to this question is: That depends. Different startup incubators will have different application processes and requirements. The good news is that as incubators are focused on helping new startups, these tend to be easier to qualify for than other programs such as startup accelerators.
The first thing you need to keep in mind is that startup incubators will usually set a duration for their programs, which means they will operate via cohorts. This cyclical nature of the programs results in application periods taking place every certain number of months. For this reason, it is important to keep an eye on application periods. All startup incubators will expect you to provide a solid business plan at the time of application. This can be in the form of written documentation, a pitch deck, a presentation video, or any other mediums the organization considers valid.
Another requirement might include the CV of the team, references, product designs, potential customers, etc.
What Makes a Good Startup Incubator?
Just like startup incubators look for the best startups to support, founders like you should look for the best startup incubators for their business. Most often than not, founders will choose an incubator based on their name and fame. Unfortunately, this is not always the best way to go as less-well-known incubators might be able to offer a more tailored experience in some instances.
So, how can you make sure you are choosing the right fit for your business out of the best startup incubators? Well, you will need to put effort into doing research on the services, experience, and network each option can offer you. After all, choosing an incubator is all about which one fits your business needs.
This should go without saying but it is essential that you ensure the incubator’s area of expertise matches your startup’s industry.
With this in mind, it is a good idea to take the time to establish your priorities. Chances are that if you have a business plan, you already have a potential team that will certainly help you in your endeavors. Evaluate in which areas your startup needs help: Are you lacking when it comes to financial or legal management? Maybe you are not entirely sure how to market your product? Do you need an incubator that shines when it comes to technical resources? Are you willing to pay fees or equity?
Once you have determined your startup’s needs you will be ready to perform in-depth research of your available options. This includes a review of the program and services offered by the incubator but should also expand beyond the obvious. Taking a look at the rate of success of the startups that have graduated from the program and consulting with alumni can take you a long way. Finally, it is essential that you also consider the long term when choosing the best startup incubators to apply for. While your startup is likely to be part of the program for a few months, you should make sure to keep in mind the need for future capital. Evaluate your potential program connections with investors, the existence of pitch days, and similar benefits that will help you raise capital in the future.
The Best Startup Incubators
If you have looked around for lists of the best startup incubators in your area, you might have noticed that many outlets use “accelerator” and “incubator” interchangeably. This can make it hard for founders to find a program that matches what they are looking for. For this reason, we have created a list of some of the best startup incubators around the world for you to consider. It is important to note that we are not listing these incubators in any specific order. Let’s take a look!
Idealab
Idealab is one of the oldest running tech incubators, having been around since its foundation in 1996. The organization has helped over 150 startups succeed with more than 45 IPOS and acquisitions under its belt. This track record is more than enough to warrant Idealab a spot in any list of the best startup incubators.
Founded by Bill Gross as Los Angeles’s first incubator, the organization is currently headquartered in Los Angeles. The incubator’s mission is to “create companies with exceptional entrepreneurs to fix big problems”, which aims to achieve by focusing on AI/Robotics, consumer, commerce, enterprise, and environment startups.
Idealab offers founders not only funding but also several resources and services to support them in their early stages. These include office space and services, development and technology, product and graphic design assistance, marketing, financial advice, legal counseling, and much more. While there have been claims of high turnaround among employees, Idealab has proven to be one of the most effective startup incubators in the United State. Its wide range of offerings, successful history, and extensive networking capabilities make it one of the best startup incubators available to any founder.
Z80 Labs
Based in Buffalo, New York, Z80 Labs is a startup incubator focused on helping startups looking to innovate and foster an entrepreneurial culture in Buffalo. The organization has worked on this mission since being founded in 2012 as the first internet-focused tech incubator in the region.
Any startup that applies and gets accepted for the Z80 Labs program will receive office space, education programs, mentorship, amenities, and infrastructure, which come in the form of local sponsors and networking with industry advisors. Startups in the internet, life sciences, GreenTech, and SaaS companies can apply to the program… As long as they have a local sponsor.
This incubator manages more than $6.6 million, with $5.1 million being recently awarded by The Innovate NY Fund. Empire State Development has also provided funding to the incubator as a result of its effort to boost innovation and the local economy.
If you are looking for high-tech resources, seed funding, and top-notch mentoring in the tech sector, you should consider joining Z80 Labs’ program. You will need to be willing to move to Buffalo or nearby, tho!
Launch Academy
One of the best startup incubators in Canada, Launch Academy has made a name for itself by incubating more than 6,000 entrepreneurs across 100 countries, raising over $1.2 billion in funding. This incubator focuses on helping startups expand their business to North America, which is why it launched the Maple Program & Startup Visa program. While exclusive to tech startups, Launch Academy offers international expansion, mentorship, community connections and networking, education and training, office space, and several courses. The range of services and benefits will depend on which program you apply for. If you are not in North America and are looking to launch your startup in Canada, Launch Academy might be the best choice for you as they have plenty of experience with visa-related matters. Even if you are already there, the incubator can help you expand your startup around the globe.
CodeBase
CodeBase is one of the biggest and definitely one of the best startup incubators in the United Kingdom. Founded in 2014, the incubator has raised over $600 million in investments, expanded to 3 core sites (Edinburgh, Stirling, Aberdeen) and 24 cities across the UK, and helped over 400 founders get their startups off the ground.
The incubator not only helps startups via its programs but also creates direct connections with corporations and investors to help them detect early the startups that will shape the future. Some of the partnerships of this incubator include organizations like Barclays, Stripe, Amazon Web Services, HubSpot, The University of Edinburgh, Zendesk, Seedrs, and many more.
This heavy focus on networking is one of the key elements that have helped CodeBase succeed over the years. This has translated to it offering startups with mentorship, physical space for up to 100 people, investment, and networking opportunities.
Le Camp
Also located in Canada, Le Camp is an incubator and accelerator focused on tech startups. The organization provides support from pre-startup to internationalization stages, which has granted its team plenty of experience when it comes to entrepreneurship. Le Camp has assisted over 340 startups raising over $148 million in financing via its acceleration, learning, and connection efforts. The organization offers multiple programs aimed at helping startups at every point of their development, each of them offering different services.
No matter if you are not living in Quebec, Le Camp offers resources to startups all around the world via its international communities. The services you can expect from the programs include mentoring, office space, amenities, networking events and receptions, free software, and much more.
Seedcamp
Located in the United Kingdom, Seedcamp describes itself as “Europe’s seed fund” while others describe it as “Europe’s Harvard”. Seedcamp has been voted as the best incubator of Europe in the past, having helped more than 430 startups raise over $7 billion in funding. Seedcamp has been around since 2007 and ever since then, it has identified some of the most impactful startups in the world. Its portfolio includes notable investments such as Hopin, Revolut, and TransferWise!
Those who apply for pre-seed funding with Seedcamp not only receive capital to start their businesses but also access to a wide network of founders, operators, and investors. With its history and success, these networking capabilities make Seedcamp one of the best startup incubators for anyone who believes connections are everything.
ecentre
We are now going to the other side of the world with ecentre. Headquartered in New Zealand, ecentre has maintained its position as a leader since being founded back in 2004. ecentre is the result of collaboration with Massey University and as such, it puts a lot of emphasis on education efforts.
The incubator offers founders assistance in a variety of fields such as marketing, market research, product development, mentorship, networking, business modeling, pitching advice, group discussions, and more.
While ecentre doesn’t provide funding nor more “physical” services like office space, it has gained its spot as one of the best startup incubators in the region. If you are looking to expand your business skills and create a solid plan, you should consider this incubator.
Tech Ranch
Austin has become one of the hottest hubs for startups in the United States, with startup incubators like Tech Ranch playing an essential role in this process. Founded in 2009, Tech Ranch has assisted over 6,500 entrepreneurs across 42 countries.
Founded with the mission to “support entrepreneurs to gain access to the markets, resources, and relationships so that they may solve local problems with global insight”, Tech Ranch has been recognized as one of the best startup incubators by UBI Global and Gust’s Global Report.
The incubator offers programs aimed at helping entrepreneurs during all stages of startup development such as ideation and global expansion. This is achieved via programs destined to provide connections, training, events, and assistance destined to help founders improve their business skills. If you are looking for an incubator focused on community, Tech Ranch might be a great fit.
Article courtesy of our content partner site Grit Daily
About the Author:
Juan Fajardo is a News Desk Editor at Grit Daily and ParlayMe contributor. He is a software developer, tech and blockchain enthusiast, and writer, areas in which he has contributed to several projects. A jack of all trades, he was born in Bogota, Colombia but currently lives in Argentina after having traveled extensively. Always with a new interest in mind and a passion for entrepreneurship, Juan is a news desk editor at Grit Daily where it covers everything related to the startup world.