Start-up incubators are not exactly new. The concept of helping foster promising young businesses formally kicked off in 1959, when the Batavia Industrial Center in New York opened its doors for the first time.
However, the format of business incubators has changed over the years. Some offer seed funding, while others just offer a space to work or mentorship.
The terminology has changed too. Alongside incubators, we now have “seed accelerators”, “collaborative working spaces” and “start-up partner”.
The goal remains the same, though – to help advance the next great idea. And everyone seems to be getting in on the act recently, from Vodafone in the US to AngelCube in Melbourne, which unveiled its first four start-up members this week.
Do you need a helping hand getting to the next level? If so, you should check out our top 10 start-up incubators from across the world.
Since its launch in 2005, YCombinator has set the benchmark of what a start-up incubator should look like and behave.
Every single one of the more than 300 start-ups backed by the US seed fund has gone on to receive further funding, with the combined value of the top 21 businesses standing at a staggering $4.7 billion.
So, if YCombinator backs you, you’re on a pretty good wicket. The bad news is, despite its record intake of 63 start-ups last month, only 3% of applications are successful.
More than 75 venture capital firms and angel investors closely eye up the start-ups lucky enough to be picked out by TechStars.
Another American tech incubator, TechStars hosts 10 teams for three months of the year on rotation in four locations across the US. Each team member receives funding of between $6,000 and $18,000, in return for a 6% equity stake. It all ends with a pitch to VCs and, potentially, global superstardom.
Arguably, Australia was a little slow to realise the potential of a domestic YCombinator-style incubator, but that has thankfully changed over the past year.
PushStart has attempted a twist on the seed funding model by rolling out Mentor Connect, a program of hands-on help for entrepreneurs, before any kind of cash has been doled out.
Start-up “speed dating” sessions with mentors have taken place in Sydney, with the concept set to move to Melbourne. A welcome addition to Australia’s start-up landscape.
Another Aussie-run business, another tweak of the incubator model. Sydney entrepreneur Haig Kayserian, who spends much of his time in New York, created Kayweb Angels in May, with a different kind of offer for start-ups.
Realising that many new businesses were lacking technical skills, Kayserian has offered practical help, rather than cash, in return for equity. Kayweb Angels recently made $900,000-worth of investments in its first round of start-ups.
5. 500 Startups
California-based 500 Startups offers budding entrepreneurs a bit of everything – funding of between $10,000 and $250,000, a 160-strong network of mentors and working space in the heart of Silicon Valley.
Founded by tech heavy hitter Dave McClure, 500 Startups is rapidly emerging as one of the most sought-after incubators in the world.