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Incubators are designed with smaller, newer companies in mind. And, when we say “companies” here, we’re being quite generous, as most who seek out an incubator have little more than a cool startup name and a potentially powerful idea.
Join a startup incubator when you’re still putting your dream team together. When considering an incubator to apply to, research the mentors that are available.
You should also be wary of incubators if you need funding. Many incubators do not offer investment, unlike accelerators. However, they do not usually require relocation, either, so budget accordingly.
What startup companies and entrepreneurs should expect when going through the process of applying and working with a business incubator.
1. Do your research. Not all business incubators are the same. It is important to understand the resources and services offered, the cost of being involved, and make certain the whole package matches the needs of your company.
2. Consult alumni. Most incubators will list the companies that have gone through the process. Do your best to contact and discuss the experiences of former incubator businesses
3. Assemble your team. Business incubators look for strong founders with strong teams first, business ideas second. A startup that goes through an incubator will more than likely exit a completely different and certainly more refined business.
4. Prepare your pitch. Your pitch is how you will differentiate your startups from the other applicants and should be well prepared and well rehearsed. Keep in mind that the incubator wants companies that can succeed, not only because they have an equity stake, but also for recruiting future investment capital and promising companies
5. Determine what you want to give. As mentioned before, the cost of being accepted into an incubator is typically an exchange of equity in your company.