Definition, role … All about startup incubators

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Definition, role … All about startup incubators

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Before starting their own business, entrepreneurs go through incubators to grow their startup. These institutions support projects from their conception phase to their maturity. Focus on the role of incubators, how they work and the services they offer.

Both digital and legal developments have pushed more and more young graduates to embark on the entrepreneurial adventure and seize the opportunities that arise on the market. For quality support and follow-up, people with ideas generally turn to incubators to push their thinking further and turn simple ideas into innovative projects.

HEC Paris, EDHEC… Business school students turn to their institution’s incubators to get expert advice, be trained on pitching and leverage the resources made available to them. The role of these incubators is to encourage students to follow this vocation and to support them in the realization of their projects. However, it is necessary to pass a selection and be restrained.

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What is an incubator? Definition

An incubator is defined as a private or public organization that takes action to support entrepreneurs in setting up a business. Its main role is that ofassist holders of ideas in the realization of an innovative project. There are some incubators for projects in the implementation phase while others follow companies in search of growth and development.

In general, the incubator offers a physical workspace and a large number of essential services for the proper functioning of startups (water, telephone, Internet, premises, etc.) in addition to financial, legal and accounting services. In some cases, the incubator can connect business owners and investors.

The primary objective of the incubator is to support the emergence of new startups that are emerging. That said, it also helps minimize the risk of failure. Incubated companies can benefit from greater credibility with financial institutions and can therefore get into debt more easily. A company that goes through the incubation box puts the odds on its side and can thus hope to take off more quickly, much more than a startup that has followed a traditional path.

Read also: Behind the scenes of the EDHEC incubator at station F

The different types of incubators

There are several families of incubators:

  • “Allègre” public incubators. These institutions report to the Ministry of Higher Education and Research. Their goal is to support, for two years, the project leaders who have won the national competition for assistance in setting up a business. innovative technologies.
  • Private incubators. They generally take the form of an accelerator and can be launched by private actors (investors, associations, entrepreneurs, etc.). In some cases they have the opportunity to benefit from the support of public authorities.
  • Incubators connected to the Grandes Ecoles. They are present in economics and engineering schools (HEC, NEOMA, CentraleSupélec, etc.). Their services are aimed at students and alumni of the school. In general, their goal is to encourage students to go on an adventure and develop their entrepreneurial spirit.
  • Local government incubators. They are dependent on a region and contribute to strengthening the attractiveness and economic development of the area.
  • Large business incubators: in the current context strongly influenced by new technologies, in which companies must innovate to survive, large organizations launch their own incubator which takes the form of an open research and innovation laboratory. The target. the goal? Launch new competitive offers on the market and promote entrepreneurial culture within the teams.
  • Les CEEI (European Center for Business and Innovation). They are public interest organizations established locally. Their mission? Supporting innovative projects and promoting the creation of wealth for the development of a territory.

Read also: What do business school incubators really represent?

What is the role of an incubator?

The role of the incubator is to support the bearers of ideas and transform them into project bearers, maximizing their chances of success. Help from incubators takes three forms:

  • Sharing and feedback between entrepreneurs. Supported projects can benefit from feedback from more experienced entrepreneurs. The purpose of the incubator is above all to bring together people who are experiencing the same entrepreneurial experience.
  • Advice. Made up of specialists, incubators connect project leaders with partners who specialize in their field. The incubates are then trained and get answers to their questions regarding entrepreneurship, market orientation or the development of an economic model.
  • Access to material and technological resources. Incubators provide entrepreneurs with computer equipment, premises, but also meeting rooms. Prices remain affordable compared to those of the market.

Read also: Behind the scenes of the KEDGE incubator!

Services offered by incubators

Incubators offer many services, but these can vary from one incubator to another. Generally, young sprouts are entitled to personalized support from one or more incubators. They are thus trained in entrepreneurship and the development of a solid business plan. They also have the opportunity to interact with technical and commercial experts to answer all their questions relating to accounting, law and many other complex subjects. Project leaders also have access to a community of ex-incubates and can even talk to investors.

Depending on the incubators, start-ups can benefit from the following services:

  • Get in touch with the alumni of the incubator
  • Speech by experts on technical subjects
  • Accommodation at a price below the market price
  • Access to state-of-the-art technologies and laboratory / fab lab equipment
  • Capital contribution against a shareholding
  • Legal advice (intellectual property, fundraising, etc.)

As mentioned above, it remains difficult to provide an exhaustive list of services offered by all incubators, as they vary from one facility to another.

Read also: Qonto and PayFit are committed to supporting Station F!

How to integrate an incubator to grow your startup?

To integrate an incubator, you must first pass an archive preselection, defended before a committee. It is therefore important to prepare in advance for this phase and explain your project to a member of the jury. Therefore, it is important to prepare a presentation and presentation of the idea. You have to inspire the committee and show them that this is a real opportunity not to be missed.

To select a project, the committee members use the following criteria:

  • The path of the project leader (s)
  • The sector of activity of the project
  • The progress of the project: at what point is the project?
  • Does the project benefit from the support of other structures, such as banks or public subsidies?

To put all the possibilities on your side, we advise you to carefully choose your incubator based on the services and specificities of the facility. The incubated projects are generally those that have been well prepared and have strong development potential.

Read also: Behind the scenes of the NEOMA BS Parisian incubator selection

Pre-incubation, incubation … How incubators work

An incubator works in several stages. First, the pre-incubation. In this phase, the idea is analyzed and the feasibility of the project is studied. It is therefore necessary to prepare a clear and refined business plan to put the odds on your side. The second phase begins six months later. This is the actual incubation phase. The project is launched and the application of the business plan can begin.

Throughout the incubation, the project can count on the necessary expert support. You will also be trained during your stay in order to develop your business and become independent later on. The passage inside the incubator can last from one to two years. This period may vary according to the needs of each company.

Once the company reaches a level of maturity, it will have to spread its wings. The post-incubation lasts between 6 months and one year, depending on the needs of each startup.

Read also: The startup Swile, a new French unicorn

What is the cost of an incubator?

Even if you are selected within an incubator, you need to keep the financial aspect in mind. In some cases, the incubator may request actions from the startup. It mainly depends on the state of the institution. The most important thing is still to have a return on investment. The prices of private incubators generally vary between 150 and 500 euros per month.

They can also vary depending on:

  • Payment terms : some start-ups decide to invoice at the start of the program, others monthly or annually. There are other incubators who choose to charge only to companies that generate profits, based on previously established criteria.
  • Offered services: the premises, the technological tools made available, the presence of experts, access to a network of alumni, etc.

Read also: Launch of Station F’s new Entrepreneur Support Program

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