What Is a Startup Incubator

Nida Bohunr | October 30 2021

As newer businesses and startups pop up every day, startup incubators are becoming fashionable and practical options for many in terms of networking, mentoring, and scaling up fast. But what is a startup incubator, and how can your startup benefit from it?


What is a startup incubator?

A startup incubator is essentially a collaborative program built to address the needs of new startup companies in order to help them succeed (as compared to startup accelerators, which cater their programs to startups that are already functioning). These incubators help startups launch and grow their business.

According to the International Business Innovation Association (InBIA), “incubation programs (are) business support processes that accelerate the successful development of start-up and fledgling companies by providing entrepreneurs with an array of targeted resources and services (Torun, 2016).”

Usually attached to a business, organization, or university, startup incubators are often nonprofit organizations. While their programs are open to all startups, they also encourage students, alumni, and members of the community to take advantage of them. Incubators are also run by the government, civic groups, or entrepreneurs themselves.

Startup incubators also operate as co-work spaces with open floor plans and aim to create a productive atmosphere and infrastructure. They provide a free space for startups to come and work, build networks and find mentorship and training, as well as the resources they might need in order to launch their business.

This includes providing equipment and free internet, or access to the team members of the incubator and their expertise, such as pitching, accounting, or designing.

Since incubators are also co-working spaces, it is a great opportunity to mingle and interact with other startup founders and entrepreneurs working on different projects, startups, and ideas and learn from them.

Some incubators also have maker spaces with open access to everyone, which allow startups to learn, explore and play around with tools that could assist their startup.

While much of the attention in startup incubators seems to be around tech startups (Hytti, and Maki, 2007), they are by no means limited to them. A good incubator hosts startups from various industries, mostly catering to the needs of the community, such as social services, food delivery, community building, etc. They operate primarily as a hub of innovation and entrepreneurship.


What are the benefits of a startup incubator?

Source: A Start-up Guide for Incubator Developers

A startup incubator has a plethora of benefits for those that are just starting out and need a little bit of guidance and mentorship.

Let’s explore some of the most basic benefits of joining a startup incubator.



Networking is crucial, especially for the first-timers in a particular industry. It allows you to connect with other individuals who have a bit of experience and learn about ways to grow your business and possible mistakes to avoid. Startup incubators give you access to the social capital you need in order to navigate through the initial process.

Some of the most crucial people in your network include peers in the same industry, entrepreneurs who started off just like you and who can guide you on the steps you need to take, successful business partners of the incubator itself, and PR and marketing experts who can help you work on building visibility for your brand.



Oftentimes, the founder of an incubator is someone who has mentored several people before and this experience helps them identify the kind of mentorship and work that you and your startup need.


Moral Support

When you are part of an incubation program, you will also be surprised by the kind of support that you receive from other entrepreneurs. These can be your peers in the program, your mentors in your chosen industry, or just people with whom you interact during networking whilst at the incubator.

If someone likes your idea and wants to see you succeed, they will offer you support and empower you in every way they can. Their ideas, networks, and professional relationships can launch your startup better than you ever imagined or take it to heights you did not even consider before.


Technical skills

Learning how to create a pitch deck, and present it, the kind of pricing model you should adopt, and even something as basic as knowing how to explain what you do are important to know and polish before you launch.


Other resources

Free, high-speed internet, a space to work quietly with your team and access to investors and venture capitalists who are coming in and out of the space, building a rapport with them before you pitch to them, and learning business etiquette from them are also some invisible benefits of a startup incubator.


Tips before you join an incubator

When choosing a startup incubator, it is important to keep a few things in mind. No two incubators are the same, and a program that worked for a fashion startup might not always work for a tech startup.

There are many different types of incubators to choose from, so choose wisely after doing thorough research on what will suit your startup the most in terms of what is being taught, what kind of networking opportunities will be presented, and what kind of mentorship and training will take place during your time at the incubator.

Make sure your team is dedicated and prepared for a long-term commitment if you’re investing in the incubator. Joining an incubation program while half your team is busy with studies or jobs and only some of the members can be part of the program does not just lead to a bad incubation experience, it also ruins the overall team dynamic. Some members will be benefitting from networking and mentorship, while others will struggle to keep up.


Source: howdo.com


Look up the management team and see how they will be able to benefit you, find out who the mentors are and what industries their expertise lies in.


There are three main types of startup incubators, which are:

  1. For-profit incubators: These incubators train you and your startup in order to eventually monetize their equity in your company;
  2. Not-for-profit incubators: These incubators are invested in helping you to grow your business and launch you towards a successful venture. They aim to help startups that are trying to improve the local economy;
  3. County, state, and university-operated incubators: These are open to everyone, but students, alumni, and the local community are encouraged to participate.


Venture capital firms:

Some venture capital firms create their own incubators as an investment. They may offer to fund the startups or invest in them in exchange for equity.

Tip: Think of the future of your startup: how do you want the incubator itself to be involved, and to what extent? Are you comfortable with offering equity, or would you prefer to raise seed funding alone?


The bottom line

Startup incubators are an excellent way of giving your business the boost it needs to succeed. Knowing what areas you should focus on, how to talk while pitching to potential investors and collaborators, and being at the top of your game when it comes to your prototype are all the different ways that incubators can lend you help.

See Also: How To Reduce Your Startup’s Operating Expenses

Startup incubators help you polish your business plan especially when it comes to financial, accounting and marketing strategies. They offer a dynamic environment wherein entrepreneurs can share information, establish strong networking and communications, and address business needs in terms of funding, competition, and future expansion plans. For small startups, joining an incubator could open up new avenues for financial, economic, and legal resources as well as access to industry experts and emerging markets.

Author Bio

A highly skilled accounting professional at Monily, having extensive and diverse experience of working in US healthcare and agriculture industry. Nida is a CA finalist with expertise in Bookkeeping, Auditing, Bank Liaison, Tax Preparation, Accounts Payable, Accounts Receivable.