Business incubators have been around since the 1950s. Typically attached to universities, these entities offered a proving ground, with back-office resources, for fledgling entrepreneurs.
Now a new breed of incubator, catering mainly to technology types, is springing up all over the country. These startup hubs offer expert mentorship, resources like office space and legal counsel, and even seed money—typically in exchange for a small amount of equity in tiny (or theoretical) companies. More importantly, early-stage investors are paying close attention.
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.
How does it work? 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.
Find out how an incubator can work for you.
