With the sudden increase in the number of startups worldwide, the number of business incubators has increased too. There are about 1000 incubators in Europe striving to navigate the growth of newly companies and helping them to survive their most vulnerable period ever. Let’s quickly look at what it’s all about.
An incubator is an organization designed to help startup businesses grow and succeed by providing free or low-cost workspace, mentorship, expertise, access to investors, and in some cases, working capital in the form of a loan. All these incubation programs are usually sponsored by large corporations or public institutions or groups of the society. Joining an incubator is very similar to starting a university – you have to apply, be accepted, and then follow a schedule in order to meet standards set by the incubator.
Main Types Of Incubators
The business incubators can be categorized into five types: academic institutions; non-profit development corporations; for-profit property development ventures; venture capital firms, and a combination of all of the above mentioned. Business incubators are distinguished according to their method of obtaining profit, the business sphere they prefer to invest in and the area they choose to operate in:
- Profit: The majority of business incubators operating (about 90%) are non-profit organizations geared toward economic development. However, it should also be noted that a small percent of business incubators (about 10%) aim to gain returns on shareholder investments.
- Sphere: Some business incubators are more interested in technology businesses while others are more inclined to support service businesses, niche markets or manufacturing firms.
- Location: One can find business incubators that focus their operation on urban areas while others tend to develop start-up companies in suburban and rural areas.
Benefits For Joining Incubator
The benefits that business incubators can provide are innumerous. They can help to secure your company’s capital in a number of ways:
- Connection with potential business partners: Business incubators are capable of connecting your start-up company with so called angel investors. In case you don’t know, they are high-net-worth individual investors. If you are striving with making your company’s venture capital presentations perfect or you have hard time getting in a trustful relationship with venture capitalists then you’d better turn to business incubators; they know how to efficiently solve this issue of yours.
- Affordability, as a potential successful entrepreneur your dream is probably to increase your company’s revenue and maximally reduce unnecessary costs. By sharing secretarial office, production equipment and conference room expenses with your start-up company they will dramatically reduce your overhead and operational costs. Also, in case you are struggling with finding manufacturing space at below-market rates you should definitely get in touch with business incubators.
- Rich expertise, business incubators will provide your business with all necessary help when it comes to business prosperity and money drawing. Need a mentor with rich expertise in turning young companies into huge corporations? Are you in search of an expert that can fund fledgling businesses and make efficient marketing plans? Congratulations! Business incubators are the specialists who will land their hands to you with pleasure.
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