For many emerging companies, securing a spot in the illustrious cohorts of a business incubator or accelerator program is highly coveted. Joining the likes of Techstars, 500 Startups or Y Combinator is desired by many growing companies.
So what does it take to be selected? In this article, we dive into seven things you can do to increase your chances of being chosen.
- What problem do you solve?
At the idea level, it is vital to be able to answer what problem your product or service solves, why your team is right to solve it and why now is the time to do so. By answering these questions, you speak the language of an incubator that is looking to take an idea or business posed for success and catapult it to the next level.
- Revolutionary versus evolutionary
There are a lot of ideas out there and they typically fall into one of three categories:
- The first category are those ideas that are truly revolutionary. They change their industry forever once they hit the marketplace.
- The second category are evolutionary, which improve upon a function or process of an earlier product or service.
- The third are all other ideas. While you can make money in any of these categories, the ones that tend to be the unicorns are the ones that fall into the first and sometimes second category. This is what many incubators are looking for; ideas and businesses in those categories.
- Have your ducks in order
Prior to entering an incubator, it is necessary to have the foundation of your business in order. This means consulting with a proper trusted advisor around your legal needs. Be sure to have the basics in place as far as a corporate entity and any necessary agreements with investors or potential customers. If there are multiple partners, an operating agreement is good to have in place.
Pending resources, being able to secure your IP shows that you have taken the necessary steps to be prepared go to the next level. By the time you get to the incubator, it is best to focus your time on gaining traction for growth and the next round of investment, not worrying about your legal needs.
- Know your math
While early on, you may not understand all of your company’s margins or many of the financials, it is always good practice to have some understanding of how your business operates from a financial standpoint. This understanding gives you the ability to utilize incubator resources to really grow your business.
The ability to talk financials with mentors and strategic partners can be invaluable. Taking the time upfront to know your financials is even better. Although many people enter an incubator or accelerator without these in place, part of the reason that incubators and accelerators exist is to assist with these types of issues.
- The team, the team, the team
Ideally, you enter an incubator or accelerator with a team. People typically want to know that if they put the necessary resources around an idea or business, it has the team in place to execute. While they don’t expect you to have a full fledged staff, they will want to know there are a few dedicated people who are going to make sure they are in attendance during the program, and can utilize the resources to produce results.
- Build your network
Most incubators and accelerators exist to take an idea or business and assist it in gaining traction toward its next round of funding. Therefore, it is important to build your network. Taking the time to properly set up your LinkedIn or AngelsList profiles can be very beneficial.
Start connecting early and often with key strategic partners, mentors, advisors and investors, and begin to build this network long before you need to go to them with an ask. By creating this digital footprint, it demonstrates that you are ready, willing and able to accelerate your growth and hatch your idea or business.
Being able to demonstrate or articulate how you are going to gain traction can be very crucial when applying for coveted spaces in these incubators and accelerators. It is the traction that you will gain through their program, utilizing their resources that will accelerate your startup’s growth.
Ultimately, incubators and accelerators look to hatch business ideas in order to accelerate small business growth. The steps listed above are all best practice for doing what works efficiently. Remember, luck is when preparation meets opportunity, and the more prepared you are going into a program, the more likely the chances of ultimate success.