What areBusiness Incubators? A business incubator is a space designed to help youngbusiness leaders with the necessary guidance and financial and other support inthe form of training and other resources. The business incubator programmes canbe both the private companies sponsored or public institutions or municipalentities sponsored including colleges and universities.
As the start-upculture is pacing up, business incubators tend to become more important as theyhelp the business at every stage to grow and they are collaborative programmeswhich help people seek solutions to the problems associated with launching anew business. An incubator provides the promoters of the business with thespace to work, ensures that they meet potential investors with knowledge fromthe industry along with mentoring, training and other benefits.
In its core, therole of business incubator is to serve the country's socio-economicdevelopment, through the creation of companies that generate income and sourcesof employment. In a developing country like India, where employment and GDP arethe two key problems, incubators do have a crucial part to play.
Types of Business Incubators
There aredifferent types of incubators; however, most of them act as a co-working spacefor the member start-ups. Some incubators are industry-specific focusing onstart-ups in that particular industries like education. One can find the mostsuitable business incubators that are focused on particular industries or aparticular business model to earn the start-up with a distinct name.
Virtual BusinessIncubators: While the traditional incubator model requires a start-up ventureto set up at the incubator location, the virtual incubator provides the samesupport to a start-up business. These incubators are suitable for entrepreneurswho want the guidance and advice offered by the incubators at the same timeallow them to maintain their own offices, warehouses, etc.
MedicalIncubators: These incubators are focused on healthcare innovation, healthcaretechnology, internet of things, cyber-security and various other sectors inhealthcare.
KitchenIncubators: Kitchen incubators also known as culinary incubators are ashared-use kitchen which is a licensed commercial space that is certified forfood production. Various food entrepreneurs, ranging from chefs, caterers, foodtruck proprietors, bakers to value-added producers use the kitchen for anhourly or daily basis to avoid spending the capital on a permanent space.
PublicIncubators: Public incubators are focused on public welfare as they aim toprovide social entrepreneurs with the tools to expand their business. Thechallenging economic environment is changing the landscape of how the businessworld works; hence the social businesses have to find ways' to survive in thecompetitive environment that is offered by these incubators.
Seed incubators:Seed Incubators are also known as the accelerators as they make the process ofstart-up fast-paced. They are usually the fixed-term, cohort-based programsthat provide tailored mentorship, education and training designed forearly-stage start-ups to help further grow their business.
Corporate Incubators: A corporate incubator is similar to seed incubator as it supports the early-stage start-ups' through mentorship, office spaces and often capital. In contrast to the regular programs, corporate accelerators are formed with the objectives of the sponsoring organization.
Start-upStudios: The start-up studios are business incubators interacting withportfolio companies. A studio-like company that includes Start-up factory (alsoknown as a start-up foundry, or a venture builder) aims at building severalcompanies in succession.
Start-up India -incubators:
A small exampleof state based start-up incubators in India is Atal Innovation Mission.
Under the Atal Innovation Mission, the Government is setting up Atal Incubation Centres (AICs) in public and private sectors as well as scaling up the Established Incubation Centres (EICs). 13 AICs that have been approved with a grant of INR 10 Crore each and a grant-in-aid of INR 10 crore has been provided to 6 EICs.
The Stategovernment has collaborated with various prime institutes including IIT-Kanpur,IIT-BHU, IIM Lucknow (Noida), KNIT Sultanpur to establish Incubators. UttarPradesh will host India's biggest incubator. The government has provided grantsto the host institutions for infrastructure, operational allowance andmentoring assistance.
The grants forincubators include setup grant, recurring expense grant, rental reimbursements,investment subsidy, registration fee reimbursement and land allotment.
Incubators and Equity
Incubators do ordo not charge any equity is a common query that entrepreneurs have when itcomes to understanding how what incubators take in return for their services.
The incubatorsdo not fund their members or start-ups within their community, nor do they takeequity stakes in their members' businesses. They, however, charge fees toensure their working.
If an incubationprogram seems interesting, one should be prepared to get started with theirfledged out business plan. The plan is reviewed by the panel or a screeningcommittee to determine whether or not one meets the criteria for admission inthe program.