10 Reasons Why You Could Benefit from a Business Incubator

August 30, 2021

companies using business incubators

What’s a better path to business growth development? Being part of a team or running a small business alone? Being part of a team has helped many companies on track much more efficiently for many successful entrepreneurs.

Thus, a business incubator can be a significant step towards taking your business ideas from planning to greater achievement. According to InBIA (International Business Innovation Association), more than 1,35o incubators in the United States.

With many incubator programs globally, you may be curious about its essence in small business development. What do they offer young entrepreneurs, and what would you gain to join an incubator program?

Running a company can be exciting but sometimes daunting, and it is customary to face unexpected challenges in business that you will need to navigate through to succeed.

A business incubator is a program that offers different benefits to young startup companies, such as guidance and support necessary to succeed. However, this guide will give you the tools required to determine if a business incubator is suitable for your business or not.

What are Business Incubators

Business incubators can be seen as programs mainly designed to support young startup companies to innovate and grow. Business incubators typically provide office space, mentorship, education, and attendees gain access to venture capitalists for startups or entrepreneurs.

However, these opportunities enable companies and business ideas to take shape while operating at a minimal cost during the early stage of business incubation. 

A business incubator is a program that offers different benefits to young startup companies, such as guidance and support necessary to succeed.

Business incubators have been in existence for more than five decades. Since then, they have evolved into many structures. While there are many types, they all share a common goal of promoting growth and early-stage companies.

Some business incubators often are:

Academic institutions: Some incubators are run by universities or have academic affiliations. Some of the programs work with university students, while some accept groups of young companies. 

Non-profit development corporations: Non-profit and government agencies use incubators to stimulate economic development. These programs typically accept companies’ geared towards public welfare.

For-profit property development venture: Larger organizations develop business incubators for different purposes. First, it may be an investment opportunity or way of funding subsidiaries, improving technology, or finding partnerships. 

Venture capital firms: Some VCFs established business incubators as an investment opportunity. They can invest in startups in exchange for equity or provide seed funds further along in the program. 

the application process for startup companies

Pros & Cons of Business Incubation

Pros of Business Incubation

Services and Facilities

One of the major benefits of joining a business incubator is having access to its services and facilities, including setting up a corporate legal structure and shareholder agreement, office space, and reception desk.

You can often benefit from their support services like promotion and media coverage, which may help your startup business become more exposed.

accelerators today help startups with their early stage growth

Mentorship and quality advice

Wealthy and successful business owners typically run business incubators. However, to join a business incubator program, you can gain access to a network of seasoned mentors who can advise you on running a small business.

Aside from gaining access to a network of seasoned mentors, you have the chance of gaining access to a vast network of diverse, successful entrepreneurs.

Also, you have the opportunities to connect and mingle with successful alumni of the incubator and ask them to share their wealth of experience with you. When choosing a business incubator, ensure to examine how long each partner within the incubator program allot for mentorship.

Support Network

Business incubators promote an inspiring business environment where you and your colleagues can exchange business ideas and strategies and provide constructive criticisms of each other’s products or services. This program also creates opportunities for business collaboration and other arrangements.

accelerators today help startups with their early stage growth

Cons of Business Incubation

Limitations in corporate structure

Usually, an incubator will try to keep startups that they invest in to be as similar as possible in a corporate structure. Unlike bootstrapping, joining particular incubators may reduce your venue choices for taxation, lawsuits, vesting, and sometimes residence.

Equity stake negotiations

Business incubators are like legal entities. The benefit incubators gain from helping startups is equity stake, which means they will become shareholders or holders of the convertible note to businesses.

This may be between 2% to 10% of the stocks of the companies they are supporting. However, the negotiation deals for this percentage may become challenging and off-putting to some entrepreneurs.

Incubator responsibilities

As a part of a business support group, you also have a role to play within the dynamics. This means allotting some time for additional duties to the incubator.

Ensure you put into consideration the actual time and effort you have to spend working with third parties when determining whether to join a business incubator or not.

Research using resources to help network

10 Ways To Benefit from a Business Incubator

Incubators Foster Entrepreneurship

An incubator program will support you in defining and outlining your business goals and objectives and the critical steps involved in establishing your business. It’s not uncommon for business owners to stick to their skills and expertise and ignore the aspects they are uncomfortable with due to failure.

It is essential to provide an incubator program a clear business structure, understanding, vision, and mission for your business. It would be best if you are prepared to answers some in-depth questions potential venture capitalists would like to know about your business.

It’s normal to feel overwhelmed as an early-stage entrepreneur. Still, incubator programs will support you in providing the right tools to work with on all the fundamentals of your business and helping you in gaining a solid feeling of control over your business.

Entrepreneurship greatly benefits from a government fund

They Help With Early Stage Development

Mentorship is an essential part that you need to consider when looking for an incubator. This is because an early intervention by the industry experts is significant to the development of an organization.

Thus, by working with mentors, you are privy to external opportunities, and you have the chance to avoid unforeseen challenges. Also, mentors create opportunities for possible networking which may lead to the growth of your company.

Incubators Provide Development Support

It would help if you had guidance on how to compete with established industry giants successfully. Here, incubators can tap into their wealth of experience and support you with the management guidance and operational assistance needed to compete with the industry giants.

Entrepreneurship greatly benefits from a government fund

Access to Investors

The fact is you may need extra investment to fund your business. A business incubator typically provides introductions to essential sources of finance like angel investors, economic development coalitions, and state governments.

Accelerators don’t tend to give out much in funding; what they usually do is to connect you directly with investors who are closer to accelerators in the hopes of discovering big projects.

However, during accelerators’ Demo days, many investors are invited to watch entrepreneurs’ presentations. Also, there is time to meet, connect and mingle with investors.

Thus, this opportunity can open doors to other funding deals for your business, mainly when investors see that accelerators have helped you develop your startup company further into something that shows high potential for return.

the application process

Business Incubators Assist With Developing a Business Plan

Usually, you need to submit your business plan to an incubator before they can sign a business deal with you for the benefits you will be receiving and the costs you will be required to bear.

An incubator only wants to be sure of business plans that will succeed, so this necessary vetting can also be a confidence builder for you if you are accepted.


Many business incubators offer different amenities to support entrepreneurs, including internet, meeting rooms, printing facilities, financial, technical support, exclusive partnership services, opportunities for seed funding, and more.

Frequently these amenities are included in the general membership’s dues. Membership to incubators is designed with startup companies and small businesses in mind, so modern-day facilities are affordable.

Accelerators during incubation


Even though most entrepreneurs connect with individuals through their businesses, incubators can sometimes be lonely, and individuals misunderstand entrepreneurs. Working with a business incubator will enable you to work with a diverse set of similar-minded entrepreneurs.

This will assist you in mitigating the isolation and increasing your confidence when speaking with other people in the industry and create meaningful connections.

Space and growth are influenced by resources


Every business owner is concerned about efficiency and productivity. Business incubators are organized so that entrepreneurs can maximize their valuable time to be spent on developing their empire.

The collaborative nature of several incubators with shared office spaces has helped many entrepreneurs by providing many opportunities for them to work closely with other businesses and benefit from their creativity and innovations.

Time and Money

Regarding the return on investment with the business incubator program, it is apparent that leveraging their resources and member benefits is cost-effective. Unlike getting a physical office, entrepreneurs benefit from not seeking suppliers for office equipment and maintenance.


Learning is one of the most prominent benefits entrepreneurs derive from a good incubator. It is essential to go into an incubator with open-mindedness, willingness to listen, and accept advice from mentors.

Most incubators conduct training sessions on technological development, business development, digital marketing, legal, and design. However, as an entrepreneur, it is essential to attend some of these training sessions and apply new methods to your business.

Extensive research is a primary focus

5 Best Business Incubators Worth Checking Out Today

Incubators are essential requirements for startups to build more prominently by developing and creating different programs. More so, it provides the necessary guidance and resources that are very important for startups.

However, the most significant benefit of an incubator is when you engage and explore other entrepreneurs and mentors who lead and guide you perfectly with their wealth of experience and business accumen.

Most incubators conduct training sessions on technological development, business development, digital marketing, legal, and design.

Thus, these become essential for startups to grow and develop.

Below are the top 5 business incubators:

Urban Future Lab

Urban future lab happens to be one of the promising and leading startups in New York City. Urban Future Lab is a startup incubator that holds on to the idea of joining capital, individuals, and purpose.

The Urban startup is an up-and-coming incubtator and has received many compliments and successes. There are over 60 startups incubated through Urban Future Lab, and they’ve also raised over $650m of funding for young businesses.

Urban Future Lab focuses on earning potential and sustainability and has a success rate of 86%.

Extensive research is a primary focus

Alts Capital Lab

Alts Capital Labs is the leading Boston-based Accelerator for Global Startups with over then 75 startups incubated and raised  $12 Million in equity for their startups.

Founded by Derek Van Vliet & Geoffrey Marcus, ALTS Capital Labs provides a comprehensive & integrative program designed to prepare businesses to be capital ready.

Alts Capital labs has all the insights a startup needs. Through a unique blend of consulting services, course and print content, key technology partnerships, and online events. Alts also provides access to Venture Capital, Private Equity & Hedge Funds.

FinTech Innovation Lab

FinTech Innovation Lab is a leading startup company that looks after mentorships and communication utilizing programs. FinTech Innovation Lab offers excellent deals to support startups to enhance and develop.

It offers different programs within three months and incorporates product feedback, seminars, workshops, and meetings to fulfill various subjects.

It also provides diverse opportunities for startups to engage and present their business model and tech to different journalists, venture capitalists, and other interested individuals who belong to the field. It is a leading firm in the industry that is successful in building many startup businesses.

Business Incubator Association

Business Incubator Association connects different startup incubators in New York City, venture capitalists, and entrepreneurs. The business incubator association provides and ensures startups network with investors, gathers incubators for venture capitalists, and preserves incubators’ funding from the NYS budget.

It aims to serve and provide assistance, and guidance to different startups and looks after the profit and innovation of the startups. Business Incubator Association has more than 90 other startup incubators in New York City.

It provides different virtual business incubation programs that work to motivate and support startups belonging to various domains.

A number of education organizations


Innovate518 is popularly known as the hub of innovation in the central region of New York City, which includes Columbia, Saratoga, Albany, Greene, and Washington counties. It is supervised by The University of Albany that offers services to startups like tax incentives and funding at the initial stages of the startup.

It looks after the development stages of your startup and provides you with the essential services you need to develop your startup company.

Innovate518 provides different business and financial planning, legal advice, and mentorship programs. It also guides startups with copyright and intellectual property.

Is A Business Incubator Program The Right Choice for Your Business?

A business incubator is a program designed for early-stage companies and startups. If you are looking for an affordable workspace and mentorship program, an incubator could be the perfect choice for your business.

Also, you need to consider if a long-term commitment is right for your business. However, with a different variation on how incubator programs work, it is essential to determine which program is right for you and consider their support for each program’s benefit.

Assuming you are looking for seed funding, note that only a tiny percentage of incubators offer equity investments, narrowing your options. Depending on your business niche, it can be helpful to work with mentors who have a wealth of experience and are more exposed to your field.

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About the author: Joe Silk -

Joseph is a freelance writer who focuses on sharing our Startup Oasis team's abundant knowledge with the rest of the world. Our team has no secret for anything to do with Startups, SaaS software firms, technology, Web and mobile apps, IoT, UI/UX Design. View on Linkedin