by Dr. Xiao Wang, Chief Fire Starter, InnoSpring Silicon Valley
So you’ve decided to enlist a technology incubator to help your new business get off the ground. You have a great idea and a strong business plan, and an incubator is just the partner you need at this stage. Luckily, there are a good number of incubators now available to burgeoning entrepreneurs. Some are tailored to serve specific industries or specialties such as the high tech sector or cross-border and international markets.
The first step to making the most out of your partnership with an incubator is finding the right one for your business. Choosing the right incubator will help jumpstart and bring your startup to the next level. When researching an incubator program, you need to ask three very important questions: What do you want out of the partnership? Does the incubator have the right offerings for your business? Lastly, how should you work together?
Before delving into these questions, we need to address the many misconceptions about what incubators can provide to start-ups. The major misconceptions are that the incubator will help you form your founding team, will guarantee funding for the company and that they will directly invest in your company and possibly take a lot of equity away from the founders. Knowing these misconceptions, you’ll be able to set expectations, ask better questions as well as better leverage the connections and networks that incubators provide.
But don’t fret. Asking the right questions will help lead you in the right direction:
1. What do you want out of the partnership?
Regardless of the type of incubator, there are many benefits that startups can take advantage of including work space, networking opportunities and contacts, mentorship and training as well as support services. The three areas that are usually most important for entrepreneurs are mentorship and networks, resource accessibility and fundraising.
Key questions to ask or look into are:
- Does the incubator have entrepreneurs and specialists with experience and networks that are beneficial for my startup?
- Are accounting and legal resources available to me?
- Are there resources that can help me craft a fundraising plan and improve my pitch and/or presentation?
- Can the incubator provide seed funding or help connect you to their investor network?
2. Does the incubator have the right offerings for your type of business?
Not all incubators are the same. Some are strong in specific services, are tailored to specific industries, and vary in their offerings. Be sure to look into these as there are specific incubators that might be better at serving your industry focus, the stage at where your startup is currently, and at meeting your technical requirements. In addition to weighing in the incubator’s history and reputation, entrepreneurs should assess what the incubator’s business model and set of conditions are.
Key questions here are:
- How have they helped startups like mine in the past?
- Can they share some past success cases?
3. How should you work together?
Like all important relationships in business, there must be an understanding of how you should and want to work together. This is especially important with an incubator since you may be sharing workspace and closely collaborating in refining your company, products and/or services and market entry strategies. And not only that, incubators are also serving other entrepreneurs like yourself so gauge how accessible advisors and staff are.
You’ll want to ask:
- What is the culture like at the incubator? Do entrepreneurs work alongside one another?
- How much time do entrepreneurs have with key mentors and technical experts? Who are these mentors and their experience?
- What shared business support services do you offer such as administrative support?
When young entrepreneurs approach tech incubators, they must do their homework in order to find the one that works for them. Get recommendations too. Entrepreneurs have found us mostly through word-of-mouth and referrals from existing residents or invested companies. Actually, half of our current resident companies have come from referrals. The other half have come from outbound outreach. Some incubators like ours are very entrepreneurial with investment teams that actively seek out interesting and innovative companies that fit into our mission and focus. So, incubators might just approach you.
The ability to learn and receive support from incubators can be very valuable especially when it’s the right fit. When you find one, then it’s working to get accepted into the incubator of your choice by impressing the decision makers.
Dr. Xiao Wang is the general manager and chief fire starter at InnoSpring Silicon Valley. InnoSpring, with offices in US and China, is the first US-China technology incubator platform for globally minded startups. In 2011, she co-founded the China America Innovation Network (CHAIN), a professional non-profit organization envisioned to help transform innovation into value through fostering entrepreneurship. She is the president of the Tsinghua Alumni Association of Northern California (THAA-NC) and an honored associate member of the Tsinghua Entrepreneur and Executive Club (TEEC).