How to Choose an Incubator for your Business

As a small business owner, you will have no doubt noticed the recent proliferation of business accelerators and incubators in the UK and further afield. With success stories aplenty, it’s becoming accepted wisdom in the entrepreneurial community that these kinds of programmes can represent a great way to turn bright ideas into credible and robust business propositions with a high chance of success. This article will help you decide on the right incubator programme for you.

First off, what’s the difference between a business accelerator and a business incubator? Though sometimes used interchangeably, the difference often lies in the fact that accelerators are often top-down programmes that equip a cohort of participants with skills and knowledge via mentorship, workshops and networking, whereas an incubator adopts more of a bottom-up approach. That is, they often operate on flexible and open-ended timeframes and offer tailored support to each participant or team, catered specifically to their business challenges. This article will focus more on business incubators, and how they can benefit your small business.

Having decided that a business incubator is right for your small business or start-up, the next challenge you’ll face is deciding which incubator to choose from. To give you an idea of the range on offer, Entrepreneur Handbook lists 153 incubators and start-ups in the UK alone, and it’s not even an exhaustive list!

Here are a few things that might help you with your decision:

Sector Fit

Attesting to the wide array of programmes available, some incubators are sector agnostic while some cater to specific industry sectors. Some want to see evidence of a thought-through business plan as a condition of entry, whereas others won’t even require you have an idea at all. For those types of programmes, they believe the team is everything and pride themselves on putting the right teams together from their intakes before providing them with a business proposition to work on. So as you can see, it’s a very broad church.

Assuming you have an idea already, it’s a good idea to find an incubator programme that caters specifically to your sector. A tailored, sector-specific package of support and expertise can really light a fire under your fledging business. It will allow you to work experts and key industry players in the very sector you’re trying to make a splash in.

Sector-agnostic incubators shouldn’t be discounted entirely, however. Many of the skills you will learn on an incubator are highly transferrable and hearing from experts across a range of industries has its own benefits.

The Cardiff Medicentre is a business incubator focussing on health, wellbeing and the life sciences, while BioAccelerate at AberInnovation is designed to bring innovations in biotechnology, agri-tech and food and drink to life.

For a more generalist incubator, London-based Seedcloud support all ideas in the B2B space while the long-established YCombinator is sector agnostic and has two intakes per year.

Facilities

Start-ups are not renowned for having access to the money required to purchase cutting-edge equipment to develop, test or hone their business propositions. Some of the kit required in these endeavours runs to millions of pounds.

The news is that the state-of-the-art facilities required can often be found on university campuses and science parks. What’s more, via vehicles such as incubators, universities often have a specific remit to work with innovative small businesses and collaborate on projects or R&D work. For you, this means the chance to get your hands on equipment that would otherwise be unreachable.

University-affiliated incubation programmes will be more than happy for their participants to develop their new products, processes and services using their capital equipment. What’s more, they’ll have all the training, technician support and academic expertise you need to make your most of the services available.

So think about what equipment and technology you might need and look for an incubator that offers access to these.

For example, AberInnovation has a newly-built pilot-scale biorefinery connected to its Future Food Centre. Having both capabilities under one roof makes it a unique proposition in the UK and a perfect site for circular economy innovation.

Knowledge Exchange

As you might expect, universities are a hotbed of ideas and innovation. They bring together pre-eminent scholars, top-of-the-line equipment and facilities and significant tranches of funding in an attempt to solve some of the world’s most pressing challenges and to create new knowledge and understanding for the benefit of society as a whole.

Incubators that are linked to universities therefore have a clear advantage because the companies that take part in their programmes can capitalise on the new research and innovation coming out of the academy. Being this close to the action may well give you an enviable advantage over your competitors by allowing you to interpret, capitalise on, and commercialise new findings, hot off the presses.

Networking

I’m sure you’ll be familiar with the popular aphorism ‘your network is your net worth’. An often-overlooked benefit of a good incubator programme is the fact it can provide a real boost to your professional network. Even with a lightning in a bottle idea, you’re most likely going to need to bring others into the fold at some stage.

A good incubator will have key relationships with professional service providers that will be crucial to your success, think intellectual property attorneys, human resources experts, product development specialists, and so forth. Most importantly of all, you’ll want a programme that has actual, proven links to venture capitalists and investors that can turn your dreams into reality.

What's Up for Grabs?

The end-goal of any individual or team on an incubator programme should be investment in their proposition. A proposition that will have been iterated, challenged, tested and pored over for weeks should get its chance to pitch for investment to enable it to be launched.

With this in mind, do your due diligence on the pitch panel. What are you pitching for? Some panels might boast the right organisations, but they may be there in more of a feedback-giving role. You’ll want to know whether there’s actual ‘money on the table’ at the end of the programme – will you have a chance to secure that all-important investment that attracted you to the programme in the first place?

Also, don’t overlook the attached stipulations with regards to accessing or drawing down any investment you’re lucky enough to have secured. Some terms and conditions will be stringent and rather onerous, while some programmes or investors are happy to take a more hands-off approach to how you spend it – within reason of course! Do you want an activist investor who can help and mentor you, or do you have a winning team in place and would rather more of a silent partner in the background? These are all things you’ll want to give careful consideration when it comes to choosing a programme.

Conclusion

While there’s a lot to consider when making this choice, it really does pay to do your research and to make an informed decision when it comes to the right incubator for your small business. You would no doubt learn some valuable skills whatever you chose, but making the right choice now could have a huge influence on the ultimate success of your business.

Find an incubator that aligns with your business sector, choose one with strong links to a university if you’ll need access to expensive and complex technology, situate yourself at the nexus where fresh ideas abound, don’t neglect the importance of building a network, and finally, find out what you’ll be pitching for, and to whom. Good luck!