What roles does an incubator play in the growth of a startup??

In the medical field, incubators are known as the fixtures which are designed to protect newborn baby, by providing them with the best possible environment and ensuring the conditions are optimal for their development.

In essence, business incubators are no different than this, as they serve the same purpose for startups. Startups are also like newborn babies; they also need attention, care and support in the initial stages of the development process.

Many well-known companies such as Reddit, Dropbox and Airbnb used incubators to spur their growth.

In 2017, NASSCOM found over 140 incubators in India and placed the country third in the world for the number of incubators, behind the US and China. By October 2020, this number had multiplied. While the number of incubators is believed to be much higher.

YourStory listed and verified over 326 incubators in India. This translates roughly to one incubator per 150 startups in India.

So, in which ways do these incubators help the startups in their growth?

In this article, we will try to answer this question by taking cues from the experiences of alumni of STEP’s incubation program.

Providing structure

In the initial years, the responsibility of all the administrative duties and performing all the mundane tasks falls on the shoulder of the founder and her small team. Sometimes, this could get overwhelming for them and could distract them from their overall goal.

Incubation programs enable such an environment for startups that their focus remains on what matter the most: the core business.

Mentorship

Having access to the knowledge and advice from individuals who have already built successful businesses can prove to be invaluable for startups.

In incubation programs, startups are assigned a mentor, who is usually an experienced professional from the same industry or sector in which the startup operates. In STEP’s incubation program, many entrepreneurs continued this relationship, even after the end of the program.

Learning opportunities

Conducting learning sessions and workshops for startups, are vital components of any incubation program.

In an incubation program, you get the chance to learn about topics such as business plan, impact measurement, storytelling, financial modelling and many more.

Very rarely you will find access to this kind of diverse topic under one learning program.

Networking opportunities

Without a strong foundation of professional relationships and connections in the industry, you’ll find it very difficult to develop a strong network.

Incubation programs can be an easy channel to gain access to industry leaders, experts, influencers or even your future partners or investors. Some of the business opportunities that can spring forward from your networking efforts include joint ventures, speaking opportunities, asset sales, and strategic partnerships.

Community & Support

Running a startup can be a very lonely journey for an entrepreneur. We all need people in our life who can understand the challenges and problems we face in our daily lives.

Now imagine a community of entrepreneurs who are traversing identical paths, this person can not only be the support system you are seeking but you also get the chance to learn from the mistakes of others before you made them yourself.

Funding opportunities

Many of the incubation programs also provide funding to the participating startups. These are either given as grants or in a form of equity financing.

Even if an incubation program does not guarantee funding, it can help you in discovering the right funding opportunities for your startup.

These programs also assist startups in getting ready to raise funds by helping them in preparing their business pitch that they can showcase to the investors.

With this kind of support, incubators help entrepreneurs to step into the spotlight and continue to work towards their goals.