Choosing the right incubator/accelerator is a lot like applying to college, or business school. There’s an increasing number of options available nationwide, some are more desirable than others, and each has its own culture, admissions process, and niche. All of that makes it very hard to determine which one is right for your start-up. We previously ranked the Top 10 Incubators/Accelerators and now we’re going to help you create your own top 10 list.
The goal of any entrepreneur is to come out of the incubator/accelerator with a high growth company that’s on the fast-track to success. The first step to getting there is to decide which factors are important in picking an incubator/accelerator (referred to below as I/A). Among the factors to consider are an I/A’s 1) niche, 2) track record, 3) admissions process, 4) management, 5) meets your needs, 6) geography, and 7) time commitment. There are other factors in picking an I/A, but these are among the most important.
1) Niche: Just like a college, each I/A has a sector that its known for, or specializes in. Most of its alumni go into that sector/specialty. These reputations are worth paying attention to because you want to spend your time in an I/A that can provide the maximum benefit to your start-up via connections and mentors that specialize in your industry.
2) Track Record: Just like a major university, a top-level I/A will have multiple successful alumni. Having a track record of successful alumni is an important quality when looking for an I/A because it tells an entrepreneur 2 things. First, the I/A has a solid admissions process and can weed out the less likely to succeed so that you’re surrounded with people and ideas likely to be successful. Second, it tells the entrepreneur that the I/A has a strong curriculum, great mentors, and can make the necessary connections to secure funding, all of which set your venture up for future success.
3) Challenging Admissions: The top universities are hard to get into and have the luxury of being very selective in who they admit. The same is true for an I/A. The more challenging the admissions process, the better the program is (usually). If an I/A is very hard to get into, you probably want to be in their program (as long as they’re in your niche).
4) Management: Make sure the people who founded and/or run the I/A know what they’re doing. A college professor who spent 10 years as a biochemist working on infectious disease prior to teaching is going to be a much better teacher of the topic than someone who read a book about infectious disease 10 years ago. Similarly, an entrepreneur who spent time in the perverbial trenches and was successful will be able to provide real world insight, so make sure those running the I/A have walked the walk, and aren’t simply talking the talk. Also, look into how much time those I/A founders and managing directors spend doing hands on work with the start-ups they admit to the program. It’s not always as much time as you think.
5) Fits Your Needs: Different start-ups have different needs and each I/A is structured differently. Some ventures may need funding, but not office space because the founder already has an office from a previous venture. Some start-ups may need cheap office space and utilities, but have access to funding because of the entrepreneur’s personal or professional connections. Once you know your needs, examine the services you’re getting and the quality of those services. Is the I/A providing top-level legal advice, or someone who offered them a kickback? Some I/As charge for office space, some give it to you for free and pay you a stipend while you’re in the program. How nice are the offices and what part of town are they in? Are there office perks? Some are open 24/7, some won’t let you break your lease on short notice, some provide coffee and/or beer. Make sure the I/A provides the services that best fit your company’s needs.
6) Geography: Similar to colleges, I/As are located all over the country. For some entrepreneurs, especially those with families, moving to a different time zone or city might not be possible. Apply to I/As in locations that you can reasonably spend a minimum of 3 months, and realistically closer to a year or more because the majority of an I/A’s mentors, VC contacts, etc. are going to be local to that I/A. Just like a university’s alumni (read: job) network is usually strongest in one or two locations close to the schoo, the same is true for an I/A. It’s foolish to go through a program and then relocate as soon as it ends, diminishing the strength of the relationships you built with the I/As support services and potentially diminishing your chances of success.
7) Time Commitment: I/As place time commitments on entrepreneurs in their programs. These include business classes, dinners with VCs, and other requirements. Think of the commitments like homework in college. Some colleges have a reputation for giving out more homework than others. All that “homework” takes time away from working on your start-up, spending time with your family, and other stuff you do in your free time (yes, we know that you have a life outside of class). While we think you’ll need to spend 95% of your free time on your start-up if you want to succeed, we recognize that other things sometimes get in the way. Carefully consider how much time an I/A requires and the minimum amount of time that you’re prepared to commit to your start-up.
*Finally, as always, be cautious with your equity. Some I/As ask for more equity than others. Make sure you’re getting good value for your equity and read the fine print. Be wary of I/As or anybody else trying to structure a contract so that they get rights to your IP. It happens more often than you think.