Top 10 start-up incubators
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.
Although it has a mission to “kick start” European ventures, Seedcamp has already attracted plenty of interest from Australian start-ups and told StartupSmart this week that it was keen on expanding to the Southern Hemisphere.
Backed by a raft of leading venture capitalists and mentors, Seedcamp is on the search for entrepreneurial talent after recently raising the equivalent of $2.6 million in funding.
With a global team of more than 80 people and having helped more than 25 businesses rapidly grow, Pollenizer has become a key part of Australia’s start-up scene, despite being only three years old itself.
The Sydney-based incubator calls itself a “co-founder” of leading tech start-ups, helping the likes of Spreets, which was sold last year to Yahoo!7 for $40 million, onto bigger and better things.
A business centre in regional Australia may seem a world away from the cool kids of Silicon Valley, but the reality is that the Workspace Australia network has provided an invaluable springboard for many Australian small businesses.
With spaces in towns such as Bendigo, Castlemaine and Gisborne, the non-profit Workspace Australia provides flexible, low-cost accommodation to start-ups, as well as handy add-ons such as business mentoring and events.
Not only that, Workspace Australia was named Business Incubator of the Year 2010 by Business Innovation and Incubation Australia.
9. Startup House
Australian entrepreneur Elias Bizannes is clearly keen on start-ups working together for the mutual good.
Not only did he create leading tech network Silicon Beach and SXSW Festival staple Startup Bus, Bizannes recently launched Startup House, which is tipped to become one of the largest co-working spaces in the US.
Budding entrepreneurs live with each other in a 36,000 square metre building in an incubator that is, according to Bizannes, like “YCombinator and American Idol in a blender”.
Western Sydney is one of the fastest growing regions in Australia, so it’s not surprising that one of the country’s leading business incubators is located there.
Created by the Blacktown Regional Economic and Employment Development (BREED), the Nirimba is a serviced office with added benefits – mentoring, seminars and money off services such as accounting and insurance.