Have you or would you join a startup incubator?

5 replies
I know this mostly relates to tech ideas, but if your business was really taking off, would you approach an incubator for funding and mentorship? Has anyone worked with an incubator before?
#incubator #join #startup
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  • Profile picture of the author samanthac
    I personally have not, but my close friend has. It's a great idea because of the additional exposure you get to other businesses, ideas, and the ability to meet fellow entrepreneurs. These guys and girls are on the same journey as you, so it's great for business networking. My friend has counted on the friends he made in the incubator he was at for various things, like getting a guy on board to be a business partner in his firm, and getting contacts for various purposes. Also, these incubators would usually not take a big percentage of your business, so I think it's really beneficial to join one, even if your business was really taking off. You might also be meeting the future Mark Zuckerberg in the incubator programme, so why not!
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  • Profile picture of the author Jason Kanigan
    Do your research... there are a lot of bad incubators out there.

    In sales we tend to remember WIIFM faster than other people, and we need to apply that here. What's in it for the incubator? Some want to push as many opportunities through their program as they can in the hopes that one will pay off.

    Who do they have relationships with as far as VCs go? Are they really a bird dog for a certain VC? This kind of specific relationship is often in evidence. You should make sure the incubator is not being paid to introduce you to VCs. That's bad.

    What are the terms their "graduates" get for funding? What's the track record for that been?

    There are only a couple specific people I know who I would trust in a cap table discussion, and they'd have to be on my side of the table. A lot of founders get taken because they're so eager to get at that money--they think it's the savior but it's really a curse.

    I spend two hours every Tuesday on a call hosted by a VC, and we've had many discussions about incubators and their (mis)uses. Y Combinator, despite what I'll say below, has a good reputation through this call.

    Again: people get so excited about the money they accept any terms. Look up ratcheting equity clauses activated by failure to achieve performance targets. Often funding is NOT the answer. So rushing towards it by making your company fit the mold through what the incubator tells you to do may not be the best move.


    I've done many 1:1 calls with startup founders, and found they often lack the most basic concepts. Who's the customer? They don't know. What's the payback or ROI for their solution? They've never considered that. Why would pouring investment money on this "opportunity", which isn't even aflame yet, make sense to anyone but the idealistic founder who's enraptured by their own dreams of technological achievement ("I have a dream: give me $100 million and I'll make it for you")?


    Founders often enter these things to avoid having to go talk to potential customers. It's another delaying tactic. So know your "Why". A VC is not going to fund a completely unproven idea.

    I suppose an incubator could be of great use to a founder simply by pointing out, and repeatedly returning the founder's attention to, the fact that the new business needs a golddarned CUSTOMER. You have no idea how often that simple concept is missing. These founders pitch VCs over and over on the tech and get disillusioned: "Why does no one love my idea?" / "Because you don't have a single customer!" / "I don't understand."

    Did you know there are VC funds specifically for the SECOND businesses of successful founders? That's all they invest in: Business #2 of someone who's just exited successfully. The participating VCs don't even care what that business is, exactly.

    There is, especially in Silicon Valley, a quite insular and cliquish incubator-VC environment. Personally, if I found it necessary to join one, I would pick an incubator outside that area, one with sector-specific experience to my startup, and with a specific outcome discussed beforehand.


    My advice is for people to go to thisweekinstartups dot com and scroll down to the "Learn About" box, then look for the "Startups Basics" videos button. A user here, believe it or not, pointed that site out years ago and I've been following them ever since. I've helped several sector-specific firms move towards funding, and developed relationships with many VCs. For awhile, a few years back and before they moved to the approach of rewarding question askers and ignoring answerers (so I quit contributing), I was a most-followed Quoran on VC topics.


    It's great to want funding and all (and I speak in the general case here, not specifically to you, Matthew), but it's often a pipe dream, the wrong direction even if you could get it, and the founder still needs to go get customers anyway.
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  • Profile picture of the author socialentry
    I think it depends on where you are in life and where you live.

    My city has only one going on for it: world class research in certain STEM fields and cheap real estate.

    If I needed access to a network of researchers that are at the very tip of the spear, then yes that makes sense.

    If I were a PhD student or postdoc and have the next-cure-for-uterine-cancer and NEEDED that time to do research and I wouldn't be expected to turn a profit in the next 3 years (or in this example: a decade). Then yes, that makes sense.Absolutely.

    I did go to a couple of incubator events, and just being able to ask questions and get immediate answers from experts without being formally enrolled in their program was very useful.

    But other then this , nah. Well, technically the incubator is free and they don't take equity, so there's no harm in any case. I'm sure they at least have some useful things to say, but I wouldn't be interested in VC funding.


    (since I'm none of this things its probably nah)
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  • You say
    startup incubatah

    I say
    virgin harem ...

    let's call the whole thing official!


    Way I see it, the battle for ideas is gettin' milked earliah down the teat than evah.

    Troo breakthrough stuffs bust outta noplace, always have.

    An' mostly they do so bcs they don't get leeched or sullied first by polyamorous growth enablers whose C.V. says I STIFLE PLENTY. WANNA SEE MY YACHT?

    Too many schemes for YOUR ADVANCEMENT merely line the pockets of PEOPLE DON'T CARE 'BOUT YOUR ASS.

    Before STORY an' BRAND comes VALUABLE STUFF BCS.

    An' you wanna get this stuff to the people for whom it gonna matttah -- without no obfuscatory zillennial glazin' WINDOW gettin' in the way.

    Tellya, next time I hear the word FUNNEL I srsly considerin' spreadin' on Insta.
    Signature

    Lightin' fuses is for blowin' stuff togethah.

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  • Profile picture of the author Medon
    Yes, I joined one a few years ago . I received very valuable skills from their training and I still use them up to date.
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