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I want to start this guide with two important points. First, Incubators are for startups. Not ideas. Second, incubators are organisations that bet on you by investing in you in exchange for equity. If they don’t, they’re just a real estate business. I learnt these two points the hard way. Let me explain the critical mistakes I made to give you more context and ensure you avoid making them too. When I was younger, just starting my entrepreneurial journey, I took part in an incubator. But I went with an idea on a napkin. I didn’t have a fully formed vision for my product, I simply wasn’t ready. It was one of the reasons I failed. Incubators are for startups that already have a formed idea, have some market validation behind them and are ready to take it to the next step. My second mistake was going to an incubator that didn’t invest in the startups they worked with. I went somewhere that took my money in exchange for office space and free beers in the afternoon. I wasn’t working with an incubator. I was joining a co-working space. There is little value in that when you’re first building your startup. In my opinion, businesses like that shouldn’t even be called incubators. It’s vastly different from going to an actual incubator that will invest in your startup for two reasons: You’re going to learn from industry leaders who have a wealth of experience in what they’re doing and a vested interest in your success; You’re going to learn from other founders in your cohort because if the incubator thinks they’re also worth investing in they must also be doing something great. Yes, at an “incubator” where you pay for the privilege of office space you’ll also meet other founders. However, there’s no guarantee that those founders know what they’re doing because the “incubator’s” main focus is filling empty desks. Whereas an incubator's focus should be on guiding and investing in young startups that have potential. With that in mind, here’s some more information on what an incubator is, how it can help you in your entrepreneurial journey, and the list of the best ones from around the world. What is a Startup Incubator? A startup incubator is a collaborative organisation designed to support new startups that are looking to validate their formed product vision (hence the name incubator). Incubators provide a number of services designed to help you at the MVP stage – like access to startup capital. That being said, incubators aren’t for everyone. If you have access to capital and other vital resources to help you get your MVP off the ground, you may not need one – and save some equity. But we’ll delve into that later in the article. Before we get to the list of the best incubators, let’s dig a little deeper into how an incubator can help you. How a Startup Incubator Can Help You Here’s a rundown of the top three ways startup incubators help entrepreneurs succeed: 1. Mentorship There are a plethora of hurdles on the road to startup success. While some of them will be unique to your specific business, there are many that are common among all startups. If you choose to work with a startup incubator, you’ll have access to successful entrepreneurs who’ve faced many of those hurdles already. As Warren Buffet once said: It’s good to learn from your mistakes. It’s better to learn from other people’s mistakes. Connecting with these entrepreneurs will help you avoid common mistakes altogether – which will save you a lot of time as you build your MVP. They can help you with everything from business basics and presentation skills to marketing advice, product expertise and connections to strategic partners. This leads me to the second benefit, opportunities for funding. 2. Opportunities for Funding Getting your startup off the ground is an expensive endeavor. Most startup incubators will provide you with funding opportunities at key points in your collaboration with them. For example, Y Combinator offers a of $500k to every startup they work with. This investment is made on two separate safes in return for a percentage of the company. standard deal But, as I’ve already mentioned, startup incubators provide connections to strategic partners. This includes investors. Most incubators have a network of both angel investors and venture capitalists who can assist with further fundraising opportunities. 3. An Entrepreneurial Environment The final benefit of working with a startup incubator is the opportunity to work in an entrepreneurial environment. This starts with a workspace. Most incubators will offer you space in a shared co-working or even a dedicated office for you and your founding team. That being said, some of the biggest incubators don’t offer a physical space – Y Combinator is a prime example here. This agreement lasts for the duration of your collaboration with them. That being said, some incubators let you stay in the space for months or even years after the collaboration ends. Aside from the financial benefits, having a workspace surrounded by other startup founders is a great way to immerse yourself in the entrepreneurial environment. However, incubators don’t only offer this resource as part of the package. Many will also offer cloud computing credits, discounted SaaS subscriptions and other products and services to make life easier. Finally, it’s common to take part in a Demo Day as part of working with an incubator. This gives you the opportunity to showcase your product, pitch your idea and network with investors, advisors and other key stakeholders. What to Assess Before Joining an Incubator If the Model Fits Your Needs Not every startup fulfils the growth targets often demanded by startup incubators. And that’s ok, there are out there that are still very successful without seeing rapid growth. plenty of startups Instead, they focused on steady growth. Take as an example. The now giant communications company and still achieved a successful IPO. Bandwidth bootstrapped for 15 years The Amount of Equity You’re Selling Most startup incubators work off fixed equity percentages. By nature, that means they’re overpaying some companies and discounting others. Before joining an incubator, you have to see if the capital they invest is worth the percentage you’re giving up for your specific scenario. Profiles of the Mentors A large part of the benefit of joining a startup incubator is the mentors you’ll meet during the experience. If those mentors aren’t entrepreneurs themselves, with a fantastic track record avoid that incubator. In my experience, many incubators are full of wannabe angel investors who are posing as startup mentors. I can’t overstate how important it is that you don’t get trapped in such a programme. How Easy it is to Get In A quick Google will tell you how competitive the startup incubator ecosystem is. You’ll read that places are limited and there are thousands of other founders just like you fighting for a coveted spot. With that in mind, if a startup incubator is easy to get into it probably isn’t a great programme to join. Put simply, places like Y Combinator didn’t get their reputation from an easy application process. Is there “Industrial Value” in the Programme You have to evaluate how valuable the programme is to your specific industry. While seed capital is important, it might be worth going with an incubator that offers less than the average if they can introduce you to the right contacts in your industry. Let’s say you’re an aerospace startup for example. On one hand, you have an incubator that can offer a warm introduction to Nasa, Boeing, SpaceX (or SurfAir’s founder and friend of Altar, ), but only invests $40k of seed capital. Wade Eyerly On the other, you have an incubator offering $150k of seed capital, but they can’t offer you a warm introduction. The former may be more advantageous in your situation. Should You Work With a Startup Incubator? To answer this question, I recommend first looking at what you need from a startup incubator. If you think it will enhance your startup journey and the knowledge, capital, network and resources are worth giving up the equity, go for it. Just make sure you choose the right incubator for you. On the other side of the coin, if you can bootstrap your startup and already have a wealth of industry and product knowledge, good connections within your market and can find all the resources you need yourself, maybe an incubator isn’t for you. If you do go down the route of working with an incubator, make sure you get the most out of the experience possible. Take this example from a successful entrepreneur, Giacomo De Lorenzo. I sat down with him recently as part of our content series The Startup Journey: “Our incubator was extremely helpful, but not all of the startups that were part of the programme made the right use of them. They weren’t calling them twice a day. Whereas I knew I had that opportunity so I took it, and it was very valuable for us. So embrace that ability to ask for help, it’s one of the most valuable resources you have. You’ll be surprised how many people will be happy to help.” Last but not least, here’s the list of the 7 best startup incubators from across the globe. The 7 Best Startup Incubators Worldwide 1. Y Combinator Founding Date: 2005 Location: Silicon Valley, California USA Application Info: Online Application Form Funding amount: $500,000 for 7% equity Startups Funded: Over 3,000 Portfolio Companies: , , Twitch Reddit Product Hunt 2. Seedcamp Founding Date: 2007 Location: London, UK Application Info: Online Application Form Funding amount: Around £200,000 ($271,000) for 6% – 7% equity Startups Funded: 430 Portfolio Companies: , (formerly Transferwise), Revolut Wise Hopin 3. Amplify LA Founding Date: 2011 Location: Los Angeles, California, USA Application Info: Online Contact Form Funding amount: $100k for 10% equity Startups Funded: 70+ Portfolio Companies: , , (acquired by Google) FloQast Clutter Bitium 4. 500 Startups Founding Date: 2010 Location: San Francisco, California, US with locations across the globe Application Info: about locations and applications Learn more here Funding amount: $150,000 for a 6% stake Startups Funded: Over 2,500 worldwide Portfolio Companies: , , Udemy Talkdesk Canva 5. AngelPad Founding Date: 2010 Location: The US in San Francisco and New York Application Info: Apply online via landing page Funding amount: $120,000 for 7% equity Startups Funded: 150Portfolio Companies: , , Postmates Buffer AllTrails 6. Bethnal Green Ventures Founding Date: 2012 Location: London, UK Application Info: Contact the team Funding amount: £30,000 for 7% equity Startups Funded: 167 Portfolio Companies: , , Fairphone Commonplace DrDoctor 7. Techstars Founding Date: 2006 Location: Techstars is situated across 12 countries in 33 cities including London, Paris, Stockholm, Berlin, New York, LA and Toronto Application Info: You can find and apply to your location of choice . here Funding amount: $120,000 convertible note, $20,000 of which is contributed by TechStars for 6% equity Startups Funded: 2,500+ Portfolio Companies: , , Digital Ocean Chainalysis DataRobot Thanks for reading. Also Published here

How Early Stage Startups Can Leverage Startup Incubators

The recent COVID-19 pandemic has struck the world like a wave. Each industry sector around the world has seen a tremendous loss. Even the most like Los Angeles, Silicon Valley, Beijing, etc., weren’t immune to this. But, whatever happened, happened! powerful entrepreneurial hubs As we are past that phase and industries are getting back on track, it is time to analyze if the new normal will suit them or not. If we talk about Los Angeles, the startup ecosystem isn’t going to stop thriving. The Los Angeles entrepreneurs’ charging bull spirit has sustained them during the pandemic, and it will keep them going forward in the future. Here are some great insights about the Los Angeles business hub that places it in the lead in the post-pandemic era! #1 - A Center for Potential Startups Los Angeles is a hub of startups, no matter what business niche it is. As the COVID-19 period affected many of these startups, countless others kept their flag high and survived. As per Chris Hill, the LA-based principal of Comcast Ventures, many industries have stayed perfectly strong during the pandemic. He pointed towards Fintech, SaaS, Gaming, Health Tech, and eCommerce. Here is why- Stanley Pierre-Louis, chief executive of the Entertainment Software Association, said it’s fair to say that video games are having a moment right now - a unique and extraordinary time by any measure. And indeed, he was right. The video game industry has skyrocketed in the COVID season. The perfect example of this is . The mobile game developer and publisher , making it one of the most valuable startups in Los Angeles. Scopely raised $340 million in 2020 Moreover, the video game streaming market also experienced a massive boost. was the (67.6 million hours). Counter-Strike: Global Offensive second most viewed game on Twitch These points prove that an that develops explicitly games will indeed thrive. Apart from the gaming sector, the health tech sector was also rising in the COVID season. As per the Pitchbook analysis, the virtual health segment firms raised around in the second quarter of 2020. app development company in Los Angeles $534 million LA-based startup in Series B funding led by Magnetic Ventures. ConsejoSano is a platform that provides appointment coordination with medical providers and patients. ConsejoSano raised 17 million Moreover, , a digital health startup, did not have any trouble raising venture fundings as per its founder Celine Tien. Flowly Other than these, countless others have a scope of potential growth in the post COVID era, especially any app development companies in Los Angeles. Here are some more examples for reference: : is a management software for bookkeeping. The key motive behind this software is to make the bookkeeping process faster and efficient. The startup raised $40 million in Series C funding. FloQast FloQast : The SaaS platform allows Shopify brands to create shopping apps for mobile. The firm raised $10 million in a Series A funding round led by SignalFire. Tapcart #2 - The New Normal Paradigm When the lockdown was relaxed in late 2020, we witnessed some strange things but became a part of it. For instance, people resisted buying something from physical stores. They were more inclined towards buying online. One clear proof of this is the sudden boost in the app downloads of . Walmart The eCommerce giant app bagged the number #1 spot across all shopping applications in the US. The app even . This scenario is enough to describe that eCommerce startups are sure to boom in the future. And people will continue to purchase things online. surpassed Amazon by 20% One great example of a successful eCommerce startup in Los Angeles is . It is an eCommerce streaming startup that in a funding round led by Floodgate and Abstract Ventures. Popshop raised around $3 million Hence, it is safe to say that startups like these are sure to thrive in the post-COVID period, and people will get used to the new standard (buying online)— the reason being the diverse and expansive Los Angeles market. As the city is a hub of fresh opportunities, it is the best place for any firm to test its startup concept. #3 - A Key Attractor of Venture Capital Countless startups in Los Angeles have attracted heavy investments from investors. And it is not just about the startups. Investors are investing in anything where they see potential. One key thing that supports this is the diverse and evergreen startup ecosystem of Los Angeles. Whether they are more prominent fund investors like Upfront Ventures or early-stage investors like Mucker Capital, the investors firmly believe that Los Angeles will thrive in the post COVID era. As per Hsu, the co-founder of Mucker Capital, there are far more great companies than venture dollars here in Los Angeles. Investors in other cities should continue to see LA as an underserved ecosystem with tremendous opportunities. Mark Suster, the managing partner of Upfront Ventures, stated that 40% of its investment dollars in Los Angeles, 40% distributed across the Bay area and NYC. He added that the rest 20% is invested both nationally and internationally. The share of LA is pretty high as compared to other locations. the firm invests around has invested in various LA startups like GOAT, Drone Base, Scopely, and many more! Upfront Moreover, is another venture capital fund in Venice that has invested in the LA-based bookkeeping startup, FloQast. Amplify From all of this, we can say that LA holds a high ground in investments. Thus, making it ready to launch in the post-pandemic period. #4 - Remote Talent Acquisition Almost every firm in the world started hiring employees remotely amidst COVID-19. Thus, offering a lot of convenience to them. Moreover, the trend of remote hiring is here to stay for long. Why? If we talk about LA, it may take hours to get to work if you live across town. This long commute was greatly reduced for people in the lockdown, and people are used to it now. The remote hiring regime has not just benefitted the employees of LA firms but also the LA firms. As the geographical barriers are eliminated, firms can hire skilled workforce across the border. With remote working in trend, firms can get their hands on professional and diverse talent overseas. Thus, reducing their hiring cost! , , , , , are some of the firms switching to remote work. Facebook Twitter Shopify American Express Microsoft Salesforce Final Words As the city is flooded with the best of the best and diverse startups globally, there is no doubt that it will not thrive. The clear proof behind this is the heavy investments made by various ventures. As people are used to the new normal, it will not take much time for businesses like eCommerce, online food delivery, and health tech to hit zenith.

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