For many startups, getting involved with an incubator can be a great move. However, not every startup should become involved with one, and the ones that do shouldn’t simply sign up with the first incubator that shows interest.
If your startup is considering an incubator, and you’re just getting started in the process of finding one, then here’s what you should be doing.
Decide What You Want to Gain
At the outset, you’re probably thinking only of the capital that an incubator is going to invest in your startup. That’s a huge mistake. The real benefit of an incubator doesn’t come from the capital that you get; it comes from everything else.
For one, any incubator is going to provide you and your startup team with training. Will the training that’s part of the incubator’s curriculum benefit your business? Also, you’re going to gain access to a number of different mentors. Who are they, and what are their connections? Are they the kind of people that can guide your startup to success?
Talk to People
After you’ve sifted through the number of incubators out there by identifying which ones will address your startups needs, it’s time to dig a little deeper. The best way to do this is to get in touch with people who have already gone through the incubator.
Ask them about their experience with the incubator and whether or not they found it beneficial. What were the things that they liked about it? What didn’t they like? Ultimately, you’ll want to ask whether or not the experience was worth it. Did giving up that equity provide a benefit that they wouldn’t have been able to achieve otherwise?
Decide What You Will Give Up
And that’s the thing: In order to get involved with an incubator, you’re going to have to give up equity in your startup. How much are you and the other founders willing to give up? You don’t have to make a completely rigid figure here, but you do need to have a solid idea. As you research different opportunities, you may find that you and the other founders are willing to give up more because of the things you stand to gain by signing up.
Get Your Ducks in a Row
When it comes time to actually sitting down with different incubators, you and the other founders need to be prepared. First, make sure that your team is rock solid. The quality of your team and the way that you all work together will factor in heavily to the incubator’s decision to extend an offer or not. The other major factor? That’s your pitch. Make sure that you and the other founders are well rehearsed, and that you’ve crafted a pitch that’s concise and effective.
Don’t Rush the Process
By seeing the above steps through, you should position yourself well to find the right incubator opportunity. However, don’t get stars in your eyes. Giving up equity in your business is a decision that shouldn’t be taken lightly. If possible, have a lawyer review any documents that you’re going to sign, and make sure that you thoroughly consider everything before making a commitment.