When times are good, incubators and accelerators are the rages. First, some terminology: Incubators focus on providing office space and shared services. Accelerators focus on mentorship, training, and helping you make connections to customers, partners, and sources of capital.
“The difference between working in an incubator or accelerator versus in your garage is the difference between going away for college versus commuting from home.”
There are many variations in these programs, so here is an explanation of the various kinds of assistance they offer:
Funding from $25,000 to $125,000 for 5 to 15 percent of your startup. This means the accelerator or incubator may invest the least amount of money of any outside investor. It’s hard to say whether this is good or bad—but you should at least understand that accelerators and incubators often get great deals.
COMPANIONSHIP AND CROSS-FERTILIZATION.
This involves interaction with other entrepreneurs at a similar stage of development— misery loves company, and you could learn a lot from your peers. The difference between working in an incubator or accelerator versus in your garage is the difference between going away for college versus commuting from home.
MENTORSHIP AND EDUCATION.
This is the totality of the advice from the people running the program plus their advisers, friends, and connections. Ideally, they are industry veterans and experienced entrepreneurs. Your task is to ensure that they have an extensive startup and hands-on experience and are not just consultants looking for clients. (Be sure to read “Minichapter: How to Separate Contenders from Pretenders” in the previous chapter.) At many incubators, access to mentors is informal—for example, a periodic pizza night. Most accelerator programs, however, have a formal mentorship and education process that will give you more contact with such individuals.
Introductions to potential customers, partners, and employees can accelerate your credibility, product development, and sales. The people who run incubators and accelerators all say they can make introductions, but you should check their claims with other startups in the program.
PATH TO FURTHER FUNDING.
Many incubators and accelerators hold demo days that can expose you to angels and venture capitalists. The incubator or accelerator will get you visibility but not necessarily an investment. Still, this is much more efficient than you trying to get an audience with these investors by yourself.
Bookkeeping, payroll, taxes, insurance, and other nitty-gritty tasks are a pain, but a necessary pain. They drain your time, the most valuable resource you have. Some incubators and accelerators provide staff and expertise to help you with these chores that would distract you from your core duties: finishing your product and selling it.
Shared office space, furniture, and Internet access are the main value proposition of most incubators, but these are ultimately not critical factors for your success. Therefore, don’t make them a high-priority reason to join an incubator. The PingPong table and espresso machine are nice, but you can always go to Sports Authority and Starbucks. The real value of coworking space is the flexibility it provides when you are not yet ready to sign a three-year lease on 2,500 square feet.
We have always emphasized the importance of having a good website for your company because it can act as your best tool for marketing and sales. A poorly designed website can repulse people from your business and can cause you to lose customers before you even have them. Get in touch with HyperEffects to work on creating, enhancing, and making the website of your company more user-friendly.