Getting Started With Business Incubators
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What it is: Business incubators are organizations geared toward speeding up the growth and success of startup and early stage companies. They’re often a good path to capital from angel investors, state governments, economic-development coalitions and other investors.
The National Business Incubation Association has more than 1,400 members in the United States -- and a total 1,900 members in 60 nations.
How it works: Incubators vary in their strategies. Some are located in an actual physical space meant to foster networking among entrepreneurs and their coaches. Others operate on a virtual basis.
Incubators sometimes call themselves accelerators instead, often when they’re geared toward jumpstarting businesses that are more developed.
Many have potential capital to invest, or links to potential funding sources. There’s access to services such as accountants and lawyers -- not to mention invaluable coaching and networking connections through the staff and other entrepreneurs at the incubator..
Upside: Your business not only gets access to a potential buffet of capital choices, but also a host of intangible benefits including mentorship, expertise and networking.
Downside: The very benefits that can make incubators so useful -- constant mentorship and networking with entrepreneurs -- can damage your focus during crucial early stages.
Think hard about whether your business is at a stage where it could benefit from an incubator. And don’t move in to the first one you come across, either. Shop around and find the one with the services that are the best fit.
Related: Pros and Cons of Incubator Funding
The directory, however, is limited. And it is important to find an incubator that is the best fit for your business. Other good sources for finding an incubator include state and local economic development departments, as well as local SBA offices.