This wave of new startup businesses stemmed from people’s need to explore income-generating alternatives, while others finally decided to turn their passions or innovative ideas into full-time business ventures.
Across Canada, COVID-19 fueled unprecedented levels of innovation and entrepreneurship which led to the creation of two million startup businesses nationwide.
But if following your passions and becoming your own boss is the ultimate achievement, why aren’t even more people jumping on the bandwagon?
The reality is 50% of small businesses won’t survive longer than five years.
This is a daunting Everest climb for many to attempt. Looming fears of failure, not having the necessary business skills and experience, and having inadequate funding are the scary challenges that keep many aspiring entrepreneurs at the foot of the mountain.
Using a Startup Incubator Significantly Increases a Company’s Survival Rate
The good news is that entrepreneurs from all over the world who once had minimal business experience or capital now operate successful companies due to the mentorship and support they received from a startup incubator.
In fact, using a startup incubator increases a company’s survival rate to 87%.
You may be asking:
- What is a startup incubator?
- What services do incubators provide?
- How do incubators help startups?
- What benefits should incubators provide?
- How do I choose the best startup incubator for my business?
Becoming educated on what an incubator does and how it can help is arguably the most important research you can do to build a solid foundation for your business to succeed.
Let’s start with the basics.
What is a Startup Incubator?
Startup incubators are organizations designed to nurture early-stage startups by providing business mentorship, professional training, networking opportunities, connections to funding, and other resources so they can grow and scale into solid and viable businesses.
Every incubator is different, ranging in size, areas of focus, and expertise. These core differences may include:
Focused primarily on funding vs. Focused primarily on mentorship
Industry-specific vs. Generalized clientele
Centrally-located vs. Online-only
Later on, we will explore choosing the best startup incubator for your business. But no matter which type of incubator is right for you, the overall importance of business incubators has been proven to be king.
Many startups outside of these programs don’t make it, and the vast majority of those supported by incubators end up with thriving businesses due to its services.
What services do incubators provide?
With a wide range of startup incubators, the services provided to entrepreneurs will vary between organizations.
However, incubators that are client-centric and genuinely invest in the success of its clients offer more dynamic and comprehensive programming and services.
These services include (but are not limited to):
- Business mentorship and coaching
Coaches and advisors are respected business professionals with industry-specific expertise.
- Training seminars and workshops
Sessions offered to startups are relevant, in-demand, and led by credible experts on the topic.
A centrally-located incubator that offers clients the option to utilize collaborative workspaces and conference rooms that foster an environment of inter-startup networking.*
* Due to COVID-19, many centrally-located incubators temporarily transitioned to online services. With mandates and restrictions now being lifted, many are returning to in-person mentorship or hybrid models.
- Access to valuable software and technology
Clients are provided with free access to tools such as CRMs, expensive equipment, and software.
- Networking opportunities and events
Organized events for clients to meet professionals, industry leaders, investors, and other entrepreneurs in the community.
Collaborative workshops or areas where clients can build products, share ideas, and have access to cutting-edge technology and other tools.
- Provide knowledge about the latest funding opportunities
Mentors advise clients on all up-to-date government grants, loans, and other access to funding.
- Strong relationships with Angel Investors
Can make introductions and connections between startup clients and investors.
- Coaching on investment pitch techniques
Mentors with investor experience teach startups the necessary skills to onboard investors.
How do incubators help startups?
Before diving into how incubators help, we must first identify the biggest challenges startups face and the elements that lead to failure.
As a startup business owner and entrepreneur, these elements can be detrimental to your business’s success and much harder to navigate without a startup incubator’s support, knowledge, and resources.
Top 4 Elements that Lead to Startup Failure:
- Limited Product Testing
Your product or service may be unique and innovative. Still, until thorough and substantial testing is conducted you will not know how viable it will be in the market, what issues may need to be fixed, or features that are necessary to add.
Gathering insight towards entry barriers in your distinct industry, along with the specific needs and wants of your desired consumer base, is essential when developing the beginning stages of a successful business plan.
This invaluable knowledge-base will serve as the basis for all future brand decisions, and will assist you in sculpting a business strategy that is custom-tailored to your target audience.
- Team Conflict
Having healthy and constructive discussions, debates, or even disagreements within your startup’s team is common and often produces the greatest ideas. However, there must always be a maintained cohesiveness amongst your core team.
A startup that is aligned on the company’s direction and made up by a team with complementing skill-sets will considerably affect productivity and general workplace positivity within your organization.
A successful team must work harmonically to propel the business forward with each member understanding the value of their colleagues and how their unique abilities aid the growth of the brand.
- Lack of Passion, Resilience, and Determination
Having passion, resilience, and overall determination sets successful entrepreneurs apart from unsuccessful ones. No matter how viable a product or business plan is, every startup will at some point be faced with some form of adversity.
Successful entrepreneurs learn to problem-solve and push through more challenging times because of their passion and belief in their business.
Greed is regularly responsible for dismantling young brands. Often pushed by a company’s founding members, personnel can be pitted against one another due to conflicting ideals for nothing more than financial gain and peer recognition.
Consumers typically respond positively to a generous attitude because such practices exhibit a genuine and relatable brand image that prompts product loyalty amongst your user base.
How do startup incubators help overcome these challenges?
Client-centric incubators offer an extensive suite of services designed specifically to overcome the common challenges and barriers that early-stage companies face.
These reputable and top-tier incubators assist with:
Product and consumer testing
By utilizing resources such as mentorship from experienced industry professionals and leading business support applications, incubators supply startup clients with the necessary tools to perfect their products and services.
Fostering a positive, inclusive, and collaborative environment
Effective incubators are designed for all clients to flourish within its entrepreneurial landscape to minimize the chance of conflict within startups’ personnel. Startups work alongside each other in the incubator program, a proven method to help young companies succeed.
Surrounding your startup with same-stage businesses
It is sometimes easy to default to a ‘giving up’ mentality when trying to lift your startup off the ground. In an incubator made up of entrepreneurs, everyone is enduring the exact same trials and tribulations creating a tight-knit community. This form of support is invaluable and keeps everyone determined and passionate about their purpose.
Building problem-solving techniques
Circumstances of greed within a startup can be avoided by providing clients with problem-solving techniques. Established mentors, advisors, and business partners within the incubator’s network enhance a startup’s professional skills to keep your brand on track and maintain a company that appears genuine to consumers.
Helping to overcome the most common and damaging elements that lead to startup failure is, of course, vital for startup incubators to provide. Still, this alone should not be the only criteria you look for when choosing an incubator for your business.
You do not merely want your startup business to avoid or overcome challenges; you want it to thrive, grow, and succeed.
You must look beyond and analyze all of the benefits and perks that a startup incubator offers over others.
What benefits should incubators provide?
Every incubator is different and unique. For this reason, you want to make sure you choose an incubator that will offer the most significant value to your business.
We recommend only considering incubators that offer a full suite of benefits that will equip you with the greatest number of tools, resources, networking, and training to bring overall success to your business.
Top 8 Benefits to Look for in a Startup Incubator
- Collaborative Workspace
Having the option to participate in an open-concept office or workspace provides endless, invaluable benefits to your startup business. These environments have proven to foster the most significant levels of brainstorming, networking amongst entrepreneurs, and innovation.
Many incubators also provide access to private boardrooms to book meetings with your team, potential investors, customers, or vendors. Having a workspace and private areas included as an incubator client alleviates high overhead costs for your business.
Over the past two years, startup incubators that typically operate out of a central location have had to transition to online services due to the pandemic. However, as mandates and regulations begin to ease, incubators are reopening its workspaces and offering hybrid in-person and online mentorship.
- Decreases Costs for your Business
Joining a startup incubator should help reduce your costs of launching and operating your business by 40-50%.
Incubators that offer office space, boardrooms, high-speed wifi, makerspaces, events, workshops, networking opportunities, and access to software and technologies offer ENORMOUS value for your startup.
These inclusions and opportunities are big expenses for an early-stage startup, and are substantial perks to launch and grow your business.
- Access to Extensive Funding and Investment Opportunities
One of the greatest benefits of an incubator is helping startups get funding. They are a gateway to accessing funding opportunities that would otherwise be confusing or difficult to navigate on your own. In Canada, startups have many avenues and ways to acquire funding, and understanding these funding opportunities is essential for any startup.
Funding opportunities startup incubators can help you with:
a) Federal Government Grants and Provincial Government Grants
Startups and small businesses across Canada have access to federal and provincial grants, notably a very long list of opportunities offered by the Province of Ontario. Although these grant descriptions and applications are available for public viewing, they can be overwhelming. Startup incubators have the experience to help you comprehend all opportunities, which ones apply to your business, and what approach you should take to have a higher chance of your grant application being accepted.
b) Introductions and connections to investors
Networking with investment firms and angel investors is a large piece of acquiring capital to build and grow your startup business. However, with millions of people launching startups that require substantial funding, it isn’t easy to get in front of the right investors without a solid introduction.
Many startup incubators have strong relationships with local investors. Having an incubator vouch for your product and business viability is often the ticket you need to get in the door.
c) Crafting a Memorable and Effective Investor Pitch
Once the introduction has been made, and the meeting has been scheduled, you now have to prepare a pitch for an investment opportunity they cannot refuse. Delivering a solid pitch can mean the difference between your startup continuing its growth or remaining stagnant.
But how do you do this? Where do you start?
Startup incubators with knowledgeable and experienced advisors can coach you on the best strategies to build an effective investor pitch.
- Ability to Focus On the Core of Your Business
Startup incubators that provide huge benefits such as workspaces, alleviating overhead costs, and access to funding allow you to focus on what matters most – your core business product.
While taking care of administrative and funding-related matters are essential, ensuring your product is ready for market is absolutely paramount. Incubators allow you to focus your time and energy on creating, evolving, and testing your product.
- Access To “Mover And Shaker” Networking
Having access to “mover and shaker” networks—being able to tap into a strong network of business partners and investors—allows your startup to network productively. A startup incubator that offers high-quality networking should be a ‘must-have’ when researching which organization is right for your business.
- Public Relations and Marketing
You may get to the point with your business when you have a solid product, extensive testing under your belt, and even healthy capital to support your growth. But if your target consumer has never heard of your brand, nor do they identify with it, you will not have any customers or revenue.
Full-service incubators provide assistance and coaching on PR and marketing strategies which are critical areas every startup business owner should prioritize. Incubators also tend to have large groups of businesses and investors that follow its digital presence. Therefore, incubators can help promote its clients’ successes through newsletters, websites, and social media platforms.
- Support from Well-Known and Respected Business Mentors
An influential business incubator has a network of well-known and respected business professionals that entrepreneurs can learn from in real ways. Mentors are often active business owners who can share their first-hand experiences and the mistakes they have made to enrich the knowledge of incubator clients.
Often these mentors have endless connections across the business community which can help you access a variety of people and services in marketing, accounting, presentation skills, legal guidance, insurance, finance, human resources and much more.
- Access to Workshops, Events, and Business Training
Choosing a startup incubator that holds various workshops, events, and business training will prove to be a massive benefit for your business. These inclusions are how you can organically network with business leaders, investors, and other entrepreneurs while building your professional skills and knowledge.
How do I choose the best startup incubator for my business?
Your product or service is unique, so choosing a startup incubator should not be an impulsive decision.
No two incubators are identical in services offered or areas of expertise, so we recommend researching to determine which organization will be the right fit for you.
In addition to considering an incubator’s benefits and how they will help your business, as listed above, there are other significant considerations to take into account when picking a startup incubator.
Location of Your Startup: What factors should you consider?
A considerable portion of your research should include the best place for your startup to succeed. Consider the following questions.
What country or region leads in my industry?
Where is there significant growth and funding available in my sector?
Is there government funding available in the locations I am considering?
Is being in a large city necessary to achieve my business goals, or would a more rural location be a better fit?
Why is Canada a popular location for startups?
Many of the best startup incubators in the world are located in Canada due to:
- Large funding opportunities
- High-quality of life
- Close access to U.S. markets
- Being immigration-friendly
- Substantial growth across the technology industry
Growing Canadian Tech Market
Canada is home to some of the world’s most sought-after tech startup incubators because of the country’s immense support and the abundance of natural resources to support the agtech and cleantech sectors.
Cleantech will be one of Canada’s top five exporting industries by 2025, with $20 billion annually in exports—nearly triple the current value.
Other technology sectors experiencing a surge are digital and healthcare, especially after the two years of strain that COVID-19 placed on Canadians and its public healthcare systems.
Innovation Cluster Peterborough and the Kawarthas: The Ideal Incubator for Tech Startups
With two locations nestled in one of Ontario, Canada’s most desirable regions, Innovation Cluster Peterborough and the Kawarthas ticks all of the ‘must-have’ boxes for a startup incubator.
The Innovation Cluster offers a full-service incubation program focused on growing technology-driven companies. It provides collaborative workspaces, workshops, events, one-on-one mentorship, training, access to funding, networking opportunities, and more.
The Innovation Cluster is located 1.5 hours from Toronto and 3 hours from Ottawa, providing entrepreneurs with the best of both worlds: Rural community life with quick access to Canada’s booming city centres.
Being a rural startup incubator allows clients to access funding opportunities and receive one-on-one support often unavailable to startups residing in large metropolis centres.
The Innovation Cluster not only can support entrepreneurs in the Peterborough and Kawarthas region, but also international startups through its Startup Visa Program accredited by the Canadian Federal Government.
What truly sets the Innovation Cluster apart from other incubators is not only its ability to provide all clients with high-level expertise, services, resources, and an extensive entrepreneurial network.
What stands out is the organization’s prioritization of providing individual, high-quality mentorship to every client, and this is in our opinion is the most valuable attribute you can find in a startup incubator.
Learn more about the Innovation Cluster and apply online by visiting www.innovationcluster.ca.