Countless startup incubators are popping up throughout the United States and around the world. These organizations exist with one goal in mind: to empower early-stage entrepreneurship by providing access to capital or resources. If you're considering joining an incubator, you'll have a range of options from which to choose, including name-brand venture funds and independent conglomerates of angel investors. It is important to approach your choice of incubator with the outcomes you're hoping your business will achieve. Ask yourself the following four questions to make the most of your experience:
1. Does the Incubator Have Industry Expertise?
Ambiguity can be a major challenge for entrepreneurs, especially if you're a first-time founder. Small-business owners face many unknowns and have many hurdles to jump through. A startup incubator with experience in your industry will help you navigate these challenges and uncover your clearest path forward. This benefit is especially valuable in complex or highly regulated industries.
2. Will the Incubator Help Me Learn?
Many incubators offer learning opportunities through workshops and mentorship sessions. Choose a program that complements the areas in which you're looking to learn and grow. You'll want to build upon your core strengths while you tackle your biggest areas of weakness. To that end, your incubator's curriculum isn't an extra perk — it's an important part of your core business strategy and vision.
3. Who Will Be My Peer Companies?
The best learning opportunities come from the people and teams surrounding you, which is why you want to be in good company. Do your fellow founders embody your values? Are they experiencing the same challenges as you and your team? Make sure that in addition to having common interests, you are also inspiring one another.
4. What Is the Incubator's Track Record?
Your incubator will be a lasting partner to your business. In exchange for participating in the program, you'll likely need to give up some equity (profits or another form of business value) or pay a fee for working with the incubator. This means your incubator partners may have some level of control over your business. No matter how much you agree to give away, make sure you'll receive proportional value in return. Which paths have alumni companies followed? What has worked well for them? What hasn't gone well?
Startup incubators could represent a great path forward for your business, but you need to make sure you find the right fit for your venture, vision and team. Just as incubators and investors conduct due diligence, you need to do yours too.
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