A growing number of business incubators aim to change the fortunes of Europe’s entrepreneurs.
When Gary Keery found himself craving a bowl of cereal while out and about in London, he hit upon a fantastic new business idea, a caf. which serves nothing but cereal. A few years later and his new caf. is thriving, but it could never have happened without the support of a business incubator in the form of Virgin Start-Ups.
Incubators have been multiplying rapidly over the past ten years. First emerging in the US, but spreading across to Europe, there are now hundreds to be found across the continent, and they are very much needed. Entrepreneurs continue to struggle in Europe thanks to a combination of poor attitudes to risk, fear of failure and tight regulations. According to the Eurobarometer on Entrepreneurship, most Europeans (58%) say they would prefer to be an employee, whereas in America the figure is more or less reversed.
But the question is, how can businesses be sure to choose the right incubator for their needs? First things first: you need to understand the difference between an incubator and an accelerator. An accelerator programme is typically aimed at the earliest stage start-ups and might include mentorship, advice, support and some early stage finance. It might run over a few months and end with a demonstration day on which businesses show themselves off to potential new contacts and investors.
One of the largest is StartUp Bootcamp. Beginning in Denmark, it has spread across the continent to become one of the largest accelerators in the world. Its programme begins with a €15,000 investment from the boot camp to cover living expenses and six months in a supportive co-working space. In total, the startups benefit from €1,000,000 in cash from corporate partners such as Google, PayPal, AWS and many others. The programme ends with a demo day in which they meet 500 investors, partners and mentors. Others include Seedcamp, Numa in Paris and Gamma Rebels in Warsaw. Incubators, on the other hand, are for later stage businesses. Like accelerators, they offer access to office space and mentorship, and they may also take equity in the business.
However, there is no predetermined end to any programme and there will not be a demo day. Both these options can be enormously helpful for your business. They might be able to offer a source of startup capital that may not be accessible elsewhere, and they provide mentorship and support from experts, which could prove invaluable to a small business owner. However, you may need to work hard to ensure you find the best programme for your business. The sheer number of schemes means there is significant variation in the quality of the options available. Some are good, some are bad. Equally, they must match the area you work in. Some will specialise in specific niches. For example, i5invest is an incubator focused on B2C, B2B and mobile internet ventures.
All in all, though, a good incubator should have the following qualities. First, there should be a strong local infrastructure: Tech City at the Google Campus in London, for example, is close to students as well as a thriving local business community. It should have strong connections with universities, business schools and the business community. There also has to be a benefit for all parties. The entrepreneurs naturally benefit from advice and support, but the investors have to see a benefit in being granted access to a range of high quality pre-screened businesses which have already received professional support.
The scene is still in its relatively early stages, which means it will continue to evolve and develop. More incubators will come onto the scene, offering an increasingly varied range of benefits to their stakeholders. As a business, it’s all about assessing your needs and finding an incubator which best meets them.