All About Incubators For Start-Ups in India

Incubators in start up ecosystem

An incubator is an organization that provides resources, mentoring, and support to early-stage startups and helps them become successful businesses.

Incubators provide a supportive environment in which entrepreneurs can develop and grow their businesses.

They provide access to capital, mentors, resources, and networks, enabling startups to move from concept to launch in a much shorter timeframe.

Incubators are an important part of the start-up ecosystem, as they provide the resources and guidance to help startups succeed.
By providing guidance and resources, incubators create a bridge between entrepreneurs and investors, connecting them to the resources and connections needed to succeed.

Incubators also provide a platform for entrepreneurs to network, collaborate, and learn from each other.

This can be invaluable for startups, as it gives them access to mentorship and an opportunity to share best practices and experiences.

Incubators provide a space for entrepreneurs to experiment and build their businesses while also providing the resources they need to succeed.

They can help startups get off the ground, make connections, and build their businesses faster than they would be able to do alone.

How to Select an Incubator for Your Business

Start by researching the different types of incubators, the services they offer and their performance record.

Compare several options online and talk to other entrepreneurs and business experts.

Assess your current needs and future plans.

Incubators vary in terms of size, location, structure, focus and the services they provide, so make sure the incubator you select offers the help you need.

Most incubators have specific application requirements, so narrow your choices to the ones that meet your criteria.

Once you have narrowed down your list of potential incubators, meet with them personally and determine if their program is the best fit for your business.

While cost should always factor into your decision-making process, it’s important to remember that getting accepted to the right incubator is an investment that’s worth making.

Once you’ve considered all of your options, carefully weigh each factor and decide which incubator is the right fit for your business.

The Benefits and Risks of Joining an Incubator

Incubators can be great for business. But there are downsides also!

Let us explore the pros and cons of using a business incubator.

Benefits:

Access to Resources: Incubators provide access to resources such as angel investors, venture capital funding, office space, technology, and mentoring.

These resources can help entrepreneurs develop, launch, and grow their business.

Networking Opportunities: Joining an incubator can give entrepreneurs access to a network of experienced professionals and peers who can provide industry insight and support.

Public Relations Opportunities: Incubators provide the opportunity to be featured in press releases and online articles, which can be invaluable in helping build a brand.

Access to Advanced Technologies: Incubators often provide access to advanced technologies that would otherwise be out of reach for startups.

Risks:
Loss of Intellectual Property Rights: In some cases, incubators will require entrepreneurs to sign non-disclosure agreements or other contracts that could potentially limit the rights of the founders to their business or their intellectual property.

Lack of Flexibility: Joining an incubator might mean that a business has to fit into a specific schedule or program structure, which could be limiting.

High Costs: Incubators often require startups to pay fees in exchange for access to their resources. These fees may not be suitable for all startups, especially those with limited finances.

Loss of Control: Entrepreneurs should be aware that joining an incubator might mean that they have to cede some control of their company to the incubator or its partner companies.

3. Types of Incubators and When to Use Them

Incubators can be classified in many ways depending on the type of functions they focus on the way money is used. But commonly following types are in use –

Accelerator

An accelerator typically provides a series of educational workshops, mentorship and possible seed funding for start-ups.

They give new businesses access to mentors and resources to help them launch quickly.

Accelerators often provide training, capital, and/or office space to help start-ups get up and running.

Start-ups must typically pitch their businesses to be accepted into an accelerator program.

Top acclerators in India –

  1. Microsoft Ventures Accelerator – Bangalore
  2. 91springboard – Delhi
  3. The Startup Centre – Chennai
  4. Axilor Ventures – Bangalore
  5. VentureNursery – Mumbai
  6. IAN Incubator – Mumbai
  7. Calcutta Angels Network – Kolkata
  8. Lead Angels Network – Across India
  9. Jaarvis Accelerator – Gurgaon
  10. Indian Accelerator – Bangalore

Seed Incubator

A seed incubator provides more capital than accelerator and also provides mentorship and guidance.

Seed incubators can be used in a variety of ways by start ups.

They may provide mentoring and support for ideas, access to funding, networking opportunities, and other resources to help foster the start up’s growth.

Seed incubators can also connect start ups to experienced entrepreneurs in the industry and provide access to top talent in the field.

They can create opportunities for start ups to partner with larger companies.

Seed incubators can be of great assistance to startups when trying to establish themselves and grow.

Top see incubators in India –

  1. n/Core (Bangalore, Karnataka)
  2. 91springboard (Delhi, Hyderabad, Noida, Gurgaon, Mumbai, Chennai)
  3. Anthill Ventures (Gurgaon)
  4. Village Capital (Bangalore, Mumbai, Delhi)
  5. Axilor Ventures (Bangalore)
  6. LetsVenture (Bangalore, Mumbai, Delhi)
  7. Intensity (Hyderabad, Kochi)
  8. CIIE India (Ahmedabad)
  9. GSVLabs (Bangalore, Mumbai)
  10. 50K Ventures (Pune, Bangalore, Mumbai)

Corporate Incubator

Corporate incubators focus on specific industries where the start-up is aiming to explore.

Corporate incubators are initiatives developed by large companies to support the growth and development of new and emerging businesses.

These incubators provide mentorship, seed funding, workspace, and expertise to help startups develop their technology and market entry strategies.

Corporate incubators also help entrepreneurs by providing access to government grants, networking events, and other resources.

Startups benefit from such incubators by gaining access to an experienced corporate network, a larger pool of resources, and potentially improved influence and visibility in the industry.

Top corporate incubators in India

  1. Z Nation Lab – Bangalore
  2. The Hatch – Bangalore
  3. Action Building Ventures- Mumbai
  4. T-Hub – Hyderabad
  5. Kyron Global Accelerator – Gurgaon
  6. 91springboard – Delhi
  7. GSF Accelerator – Mumbai
  8. Axilor Ventures – Bangalore
  9. Innoviti Incubator – Mumbai
  10. IAN Incubator – Delhi

University Incubator

A university incubator offers mentorship, access to resources, and network connections to the start-up.

University incubators can be used by start-ups to accelerate their growth by providing access to resources, mentors and financiers.

University incubators may also offer specific resources such as networking events, workshops, seminars and mentorship programs, and office space, co-working areas, and capital or funding support.

These incubators often attract investors who may be interested in investing in innovative technologies created and developed by start-ups.

Such investors bring funding and strategic guidance and advice, and act as gatekeepers for collaborations with corporate or venture capital investors.

Top 10 university incubators in India –

  1. KIIT-TBI – Kalinga Institute of Industrial Technology, Bhubaneswar, Odisha
  2. T-Hub – IIIT-H Foundation, Hyderabad, Telangana
  3. IIT Bombay – Entrepreneurship Cell – India Institute of Technology, Bombay, Maharashtra
  4. IKP-EDEN – Indian Knowledge Park, Hyderabad, Telangana
  5. IEDC-IIM A – Indian Institute of Management, Ahmedabad, Gujarat
  6. NSRCEL – IIM Bangalore, Bangalore, Karnataka
  7. HTIC – Hindustan Technology and Innovation Centre, Chennai, Tamil Nadu
  8. RII-TBI – Rajasthan Institute of Technology, Jaipur, Rajasthan
  9. Launchpad – IIT Madras, Chennai, Tamil Nadu
  10. Start-Up Oasis – Jaipur, Rajasthan

Angel-Investor Incubator

An angel-investor incubator provides seed capital and mentorship in exchange for equity or a convertible loan structure.

Achieving success as a startup can be a difficult endeavor, particularly due to funding.

Angel-Investor Incubators provide startups an opportunity to receive capital, resources, training, and networking opportunities to help their businesses grow.

Depending on the incubator program, startups and their teams can receive guidance from industry professionals and venture capitalists, who can provide an array of advice and mentorship ideas.

Additionally, angel-investor incubator programs can provide access to resources such as shared workspaces, specialized technologies, and other organizational tools.

Finally, many incubator programs are very selective in their selection process and involve considerable vetting of teams to ensure their potential for success.

Top 10 angel investor incubators in India –

  1. 50K Ventures, Bengaluru
  2. VentureNursery, Mumbai
  3. GSF Accelerator, Mumbai
  4. Exotel, Bengaluru
  5. Blume Ventures, New Delhi
  6. Kstart, Bengaluru
  7. UNI Incubators, Bengaluru
  8. Microsoft Ventures, Hyderabad
  9. Anthill Ventures, New Delhi
  10. Calcutta Angels Network, Kolkata

Venture Capital Incubator

A venture capital incubator provides more mature start-ups with funding and mentorship in exchange for equity or convertible loan structure.

Unlike venture capitalist firms which usually invest in the later stages of companies, venture capital incubators invest early-stage or start-up companies in exchange for equity.

Venture Capital Incubators provide more than just capital — they provide additional support in mentorship, office space, and access to network of industry and financial contacts.

They also help to shape the strategy and guide the development of the start-up’s product and services.

Top 10 venture capital incubators in India –

  1. Kstart, Bengaluru
  2. GSF Accelerator, Mumbai and Bengaluru
  3. Indian Angel Network, Multiple Locations
  4. VentureNursery, Mumbai
  5. CIIE.CO, Ahmedabad
  6. Techstars, Bangalore
  7. Villgro, Chennai
  8. YourNest Angel Fund, Gurgaon
  9. IAN, Multiple Locations
  10. Unitus Seed Fund, Bengaluru

How to Pitch Your Business Idea to an Incubator

Research the incubators in your area or region and determine which ones you should target with your business idea.

Look at their criteria, history and portfolio of companies.

You want to make sure that the incubator shares a common mission and values with your own, and has the resources and experience to help bring your forward-thinking business idea to life.

Prepare a comprehensive business plan. This should include a comprehensive overview, market research, financial projections, organizational structure and a timeline for success.

It should also include an executive summary to give potential investors and business advisors an introduction to the project.

Create a PowerPoint or other presentation to give a visual overview of your business plan.

If you do not think you can create an effective one on your own, consider hiring a graphic designer or getting expert help from a business advisor or industry leader.

Once you are ready, practice your pitch with trusted friends and family members.

This will help you to prepare for questions that the incubator panel might ask you, as well as practice your skills in an unfamiliar setting.

Dress professionally because first impressions are crucial.

Finally, you should prepare for questions that the panel might ask you.

It is important to be able to quickly and coherently answer their questions in order to demonstrate that you know and understand your project.

Once you have pitched your business idea to the incubator, follow up with members of the panel to make sure you were heard properly and to address any further questions.

Incubators often receive hundreds of proposals from entrepreneurs, so it is important to remain top of mind by keeping communication lines open.

Tax and Loan Benefits for Businesses

Small and medium enterprises are eligible to receive a three-year tax exemption on profits in India if they are incubated in approved business incubators.

The period of exemption can be extended up to five years, depending on the incubator’s performance.

Incubator-based startups can avail the benefits of operating in Special Economic Zones (SEZs).

These benefits include import and export duty exemptions, tax holidays, etc.

Incubator-based startups may also qualify for concessional loans (up to Rs. 10 crores) under the Credit-Linked Capital Subsidy Scheme (CSCS).

These loans are provided by the Small Industries Development Bank of India (SIDBI).