So you’ve registered your business, bought a domain name and now you’re ready to make your startup dreams come true.
If you’re a first-time business owner, you’ll soon find out that there are a lot of different tasks involved in starting a company from scratch.
From financial forecasting to sales and marketing, you’ll have to wear many hats.
Fortunately, there are organizations called startup incubators that are dedicated to helping new entrepreneurs in the early days and years of their ventures.
The purpose of a startup incubator is to support the growth of fledgling businesses by providing:
- Training
- Office space
- Tools and technology
- Networking
- Mentorship
They also help minimize the risk for new business owners as they test their business ideas.
Find the right startup incubator in 3 steps
From Quebec City to Vancouver, startup incubators are everywhere. Here’s how to find the right one for you:
- Focus your search.
- Consider local colleges and universities.
- Go where there’s support for your sector.
Let’s explain how startups work before diving into our tips, then close with 5 tips on writing applications that get accepted.
How startup incubators work
Most incubators require entrepreneurs to apply for acceptance. Once accepted, you could be in the incubator program for anywhere from a few months to a few years.
The ultimate goal is for startups to “graduate” from the program with all they need to run successfully on their own.
Incubators take different forms or organize themselves around different themes. For instance, some incubators function much like non-profits, while others invest money in exchange for partial equity in the fledgling business. Some incubators will nurture any startup in their region, while others focus on those in a particular industry, such as software or technology.
Also, not all businesses are a good fit for a startup incubator. For example, if you run a lifestyle company, are a second-time entrepreneur, have access to office space or want to build your own company culture, you might be better off turning to your network for support and guidance.
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Finding the right fit
So how do you find the right startup incubator for your new biz? Here are a few steps you should take to help you narrow down your choices.
1. Focus your search
Before you start filling out applications, you’ll first want to figure out whether you should target incubators or business accelerators.
If you’re an early-stage startup, focus on getting into an incubator program.
Already gained major traction around your product or service? Set your sights on a startup accelerator. Once you’ve clarified which type is right for you, you’ll be able to refine your search for the right program.
You can read more about the difference between incubators and business accelerators at the bottom of this post.
2. Consider local colleges and universities
Many Canadian universities have developed (or are in the process of developing) incubator programs to support their students’ entrepreneurial aspirations. If you’re affiliated with a university that has its own incubator, this may be a great place to pursue personalized support and enjoy substantial networking opportunities.
3. Go where there’s support for your sector
Depending on what industry you’re in and where you’re living, it may be helpful to expand your search beyond your hometown. For instance:
- Waterloo has a reputation for supporting tech companies and is often referred to as “the Silicon Valley of Canada.”
- Vancouver and Toronto are also big tech hubs.
- Montreal nurtures artificial intelligence (AI) startups.
- Ottawa is great for SaaS (software as a service) companies.
- The east coast is known for supporting grassroots startups.
Don’t let yourself be limited by geography. Successful entrepreneurs will tell you there are big benefits to being where there’s a critical mass of startups like yours.
Tips for applying to a startup incubator
Once you put together a solid short list of startup incubators, it’s time to start sending out applications. To set yourself up for success, here are five things you should keep in mind.
Understand the problem you’re solving
What problem does your product or service solve? Why is your team the right team to solve it? Why is now the right time for your solution?
When you answer these questions, you are speaking the language of the groups that look to take an idea or business poised for success and skyrocket it to the next level.
Figure out what type of idea you have
There are a lot of ideas out there, but the ones that incubators love the most fall into either of the following categories:
- Revolutionary. These ideas change their industries forever once they hit the marketplace.
- Evolutionary. These ideas improve upon a function or process of an earlier product or service.
Ideas like these are the unicorns — the Airbnbs and Ubers of the world. In other words, these ideas have high-growth potential and will be very attractive to startup incubators.
Have the basics in place
Before you enter an incubator, you should make sure you’ve covered your bases legally. This means registering your business as a corporate entity and drawing up agreements with investors, business partners and potential customers.
Be sure to secure your intellectual property.
When you’re in a startup incubator, you should be focusing on growth and the next round of investment, not worrying about your legal needs.
Know your financials
You don’t need to be a financial whiz, but you should have some understanding of how your business operates from a financial standpoint. This understanding will help you make the best use of an incubator’s resources. It will also give you the ability to talk financials with mentors and strategic partners.
Demonstrate promise
This is one of the most important pieces of the puzzle. Showing or explaining how you are going to start selling can be very crucial when applying for an incubator program. After all, these incubators exist to accelerate a startup’s growth. Current orders or sales show that an idea is already on its way to becoming a profitable business.
Startup incubator vs. business accelerator
While they might sound similar, the biggest difference between a startup incubator and a startup accelerator is the types of companies they serve.
A startup incubator is designed to support early-stage companies by providing them with support and resources like mentorship, office space, access to technology and so on.
A startup accelerator is more appropriate for companies that have entered the growth phase of their development. Like startup incubators, accelerators can also offer mentorship, financial investment, and other resources.
The end goal of an accelerator is to help prepare established businesses for fundraising and other growth opportunities.
Additionally, while incubator programs can run for anywhere from several months to a few years, startup accelerators tend to move more quickly, with an average program length of two to six months.
Jumpstart your success
With the support of a startup incubator, new entrepreneurs can get further, faster. But if you can’t find one that fits your business, don’t fret. There are hundreds of startup incubators across Canada. Just make sure you do your research and get your financial and legal requirements in order and you’ll land that coveted incubator spot in no time.
