We researched the most popular business incubators and created a top 5 list. Learn how to identify the right one for your business.
Startup incubators provide an excellent launchpad to establish a successful business. According to the National Business Incubation Association, 87% of new businesses that participated in incubator programs survived their first five years.
For this reason, startups often rely on incubators when stepping into the industry. However, there are thousands of global incubators, making it difficult for your board of directors to find the best fit.
Here’s the good news: We researched the most popular business incubators and created a top 5 list. Read on to identify the right one for your business and learn how you can improve board effectiveness.
What Is a Startup Incubator?
A startup incubator is a program for businesses to source seed funding, learn business management strategies, and collaborate with industry partners. Launching a new business can be a risky venture. Think of an incubator program like a parent providing shelter to a child (a startup). Under the parent’s guidance, the child can safely learn how to talk and walk.
The guidance here includes business skills training, office space, and access to professional networks and financing. Learning how to walk and talk is how the program nurtures young firms in the startup phase until they can stand on their own feet.
Startup incubators can work for any type of business. Big brands like Dropbox and Airbnb were launched through incubator programs. If it worked for them, it might work for you, too. Here are our top 5 startup incubators for your business.
5 Popular Startup Incubators (Plus Pros and Cons)
Startups can choose from thousands of startup incubator programs spread across the world. We recommend these incubators to fine-tune your ideas and speed up early-stage growth.
1. Y Combinator
Y Combinator is a global incubator program that has funded over 3,000 companies since 2005, with a total outlay of $500,000 yearly to each company that joins the program. Y Combinator hosts three-month incubator programs twice per year:
During the three months, venture capitalists, executives, and founders from successful companies give talks, provide mentorship, and connect small businesses with the program’s partners. Over 10,000 startups apply for this program, resulting in a 1.5 % to 2% acceptance rate.
The best part is that Y Combinator helps businesses even after leaving the program. After funding your startup, Y combinator’s partners continue to guide you on scaling your business.
This program offers a successful track record. It has helped big brands like Airbnb, Stripe, and Twitch get off the ground and rise in their industries. Companies launched through this program have a combined value of over $400 billion. Apply online to join the Y Combinator incubation program.
Pros of Y Combinator
- Relatively fair competition.
- You can obtain funding even after the program ends.
- You access a global network to help you build your business.
- You can go through more than one Techstars program in different years.
Cons of Y Combinator:
- Narrow chance of getting accepted into the program due to stiff competition from other applicants.
Since 2006, Techstars has helped over 3,000 startups generate solid ideas and build successful businesses. Techstars outlays a maximum of $120,000 yearly to companies that join the three-month program.
In those three months, you gain access to a global network to help you with:
- Hiring talent
- Increasing your market share
- Choosing the proper business infrastructure
The program funds all types of startups, including logistics, finance, and retail. Each year, Techstars chooses more than 500 early-stage businesses to join the program.
Techstars program offers a solid track record, as it has helped companies like ClassPass, DataRobot, and Cloudability get off the ground and thrive in their industries. The company’s total funding to startups stands at $21.3 billion. Apply now to join the program.
Pros of Techstars:
- You receive continuous support for scaling your business, even after leaving the program.
- The program supports businesses at all different stages.
- You get a chance to learn from peers who have overcome similar hurdles in the industry.
- It connects you with industry experts and potential business partners.
Cons of Techstars
- You give up a part of your business to the program’s owners.
- Lots of must-attend events, reducing the time you invest in your business during the program.
- The application period is limited.
3. 500 Startups
500 Startups is a worldwide venture capital firm founded in 2010. Their incubator program focuses on tech startups, where innovation, technology and capital drive growth.
Globally, 500 Startups has invested in over 2,600 early stage companies, with some valued over $1 billion The acceptance rate for the program is less than 2%, with a total outlay of $150,000 investment to startups that join the program.
The program has funded big brands like Canva, Udemy, Mejuri, Gitlab, Credit Karma, and Intercom. The combined value for companies launched through 500 Startups stands at $363 billion. Apply online to join the 4-month program.
Pros of 500 Startups:
- You can apply anytime throughout the year.
- You gain access to a network to helps your business grow fast.
Cons of 500 Startups:
- Applicants face stiff competition. Getting accepted into the program is challenging.
- You gain the funding in exchange for a 6% stake.
Since 2007, Seedcamp has helped over 430 startups transform a big idea to a successful company. Their incubator program focuses on tech startups targeting large, global markets. Businesses launched through this program include Revolut, Grover, Hopin, and Wise.
At pre-seed, your company will most likely get £300,000 for an ownership stake between 6% and 7%.
Pros of Seedcamp:
- You can build your network.
- You get funding to bring your dream business idea to real life.
- You can get additional funding on top of Seedcamp’s initial investment.
Cons of Seedcamp:
- Non-tech businesses cannot join the program.
- Seedcamp’s incubator program only supports European companies.
5. Google for Startups
Google for Startups connects you with the right people, products, and business best practices to help you thrive. It’s a worldwide incubator program that supports diverse and inclusive startups.
Whether you’re looking to start, build, or grow your business, Google for Startups offers the following benefits:
- Access to experts
- Strategic support
- Equity-free support for three months
- Product credits
Improve Board Effectiveness with OnBoard
Startup incubators offer a great way to obtain extra funding for your business, support from experts, and opportunities to create lucrative partnerships in the industry. For these reasons, your startup board should consider leveraging one of the incubator programs mentioned above.
As you consider incubator programs, you want the meeting to be seamless and effective. OnBoard’s powerful board portal improves board effectiveness and intelligence, while streamlining communication. Try OnBoard for free today to see how it can take your startup board to the next level.
About The Author
- At OnBoard, we believe board meetings should be informed, effective, and uncomplicated. That’s why we give boards and leadership teams an elegant solution that simplifies governance. With customers in higher education, nonprofit, health care systems, government, and corporate enterprise business, OnBoard is the leading board management provider.
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