Start-up Funding Sources – Business Incubators
Starting a successful business means, besides an innovative idea
, motivation, effort, concentration and flexibility, the ability to adapt to new circumstances, passion for work, an innate preference for challenges and risk-orientation, a team of clever experts, negotiation skills. Moreover, you need a good business plan and excellent presentation skills to attract potential investors, as most entrepreneurs, whether they have a small start-up business or have already developed it, decide to request further funding.If you have recently decided to found your company and you need start-up capital, one of the most valuable funding sources could be business incubators, programs designed the development of companies. Besides capital, they offer a wide number of facilities, such as management support and advice, links to higher education resources, intellectual property management, customized professional assistance, shared services, cheap office space, networking activities. Their role is to produce viable businesses, with a rapid and efficient growth. Businesses created by private incubators have a success rate of about 85%.
Incubators could be profit, that is, private companies or non-profit supported by the state or a local government. Their objectives are both economical and social and include increasing the number of jobs and company formation rate, social assistance for minorities or for youth. Private companies, focused mostly on profit, require a percentage of minimum 20 of the company ownership. To be eligible for funding, companies must apply for admission and present feasible ideas with a great business potential and a workable business plan. Some incubators are high-tech oriented, others fund every type of business. Companies accepted into an incubator have higher chances to be viewed favourably by investors.
A properly set-up incubator can resemble a Venture Capital partnership, meaning that they also have connections in the fields they fund, hovering around centers of entrepreneurial activity, as well as wide expertise. The average amount of time spent by a company in an incubator program is usually two or three years, until the product or service is brought to market, depending on the type of business and level of expertise possessed by the entrepreneurs. The process takes less time to manufacturing companies and more to life science firms, for example.The socioeconomic advantages of business incubation consist of job creation and local economy diversification, potential business opportunities identification, creation and retention, community revitalization.
Choosing the right incubator means considering a few key points and doing research connected to the quality of services, past success rates, service and space-related issues, management and support of sponsoring organizations, policies and procedures. The extent of services provided should also be considered, as well as asking for and checking references. Entrepreneurs should also be careful with the incubator syndrome, that is, relying too much on the initiative and judgement of the consultants, an immature shift of responsibility.
Start-up Funding Sources Business Incubators
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