Important Factors To Consider Before Joining A Startup Incubator

The startup phase of a business is often a tough and lonely time for an entrepreneur, especially when one is short of funds. Joining an incubator often fixes many of the difficulties at once: the incubator (may) offer funding or access to potential funders, office space, mentorship, the company of other entrepreneurs and much needed admin support that most entrepreneurs are not equipped to handle on their own.

That said, there are several factors you need to have in mind as you select an incubator:

1. Do your research.Not all business incubators are the same. It is important to understand the resources or services offered and the cost of being involved to be certain that the package matches the needs of your company. While capital is important, a good incubator has so much more to offer than capital. In addition to this, incubators require some input from you, so you want to make sure you know all there is to know about the incubator. If the incubator offers mentorship, make sure that the mentors have experiences and networks that are relevant to your start-up. In addition to this, ensure that the training offered by the incubator  is relevant  to you, and that you have the time to attend this training as they are often compulsory. If you have to move towns to join the incubator, consider whether the location will be a good match for your business even after the incubation period.

The  Made in NY Media Center by IFP is offering a free month for members who join by January 31st, 2015, click here to sign up and take advantage of this. Right now is a great time to join because there is an opportunity to put your company in front of investors and other insiders with the Demo Day program.

2. Consult the alumni of the incubators: If possible, talk to entrepreneurs who have gone through the incubation experience. It is important to talk to those who found the experience positive and negative, those who were a success thereafter and those who failed. This will give you a balanced view of the incubator. That said, you should not over-rely on the alumni, use your own judgment in addition to their feedback as no two businesses are the same.
3. Assemble a good team: The success of a business depends on a great idea and a great team and all start up incubators know this. A startup that goes through an incubator will more than likely exit a completely different and certainly more refined business. It may even turn out that, in the course of the incubator, that the company changes directions altogether, pivoting toward a more feasible or economic business model. The founders and their teams may also go through a transition, but ultimately, it is the original entrepreneurs that the incubator is depending on to execute the end business strategy. Make sure you have the right people in place.
4.  Prepare your pitch. Your pitch is how you will differentiate your startups from the other applicants and should be well prepared and well rehearsed. Keep in mind that the incubator wants companies that can succeed, not only because they have an equity stake, but also for recruiting future investment capital and promising companies. More important than winners, the incubators want doers — founders that demonstrate the ability to execute. Be sure to focus on how your business will succeed, not just what it needs.
5.  Determine what you want to give. The cost of being accepted into an incubator is typically an exchange of equity in your company and may be your time to mentor other businesses once you are done with the program. Ask yourself how much you are willing to give to be in the incubator and make certain it matches the needs and goals of the incubator. It would also be very beneficial to have your own lawyer or advisor to help you with the final term sheets. One thing is certain, being comfortable with the experience before you go in will greatly increase your chances of having a great experience throughout.

Being accepted to a business incubator is an incredible opportunity for a startup. If not properly prepared, however, your great startup idea will be lost in the thousands of other applicants. Worse yet, if you are accepted into the wrong incubator, you could find it a colossal waste of time and valuable company equity.

This post is sponsored by NY Media Center