This article was taken from the October 2011 issue of Wired magazine. Be the first to read Wired's articles in print before they're posted online, and get your hands on loads of additional content by subscribing online.
Business incubators provide startups with technical assistance, mentorship and training -- in return for equity and IP from these fast-growing companies, and access to the investors circling them.
Here's how to set up your own.
1. RUN A STARTUP FIRST
Experience of launching and exiting a company is useful. It encourages you to run the incubator as a business, not a philanthropic exercise. Adil Abrar, founder of startup Sidekick Studios, says, "Having been there and done that means others can avoid your mistakes."
2. FIND A NICHE
Drive knowledge-sharing between startups by focusing on a particular sector. "There are many areas that could use acceleration beyond tech," explains SeedCamp partner Reshma Sohoni -- such as clean-tech, life sciences and financial services.
3. THINK ABOUT YOUR MENTORS
Make sure you have hands-on mentors who will dedicate time and expertise. It's worth providing financial incentives -- incubators usually take between five and ten percent of a startup's equity, but it's a good idea to attribute an additional few percent to mentors.
4. BE STRICT ABOUT DEADLINES
Whether the incubation period is three months or a year, having deadlines forces companies to continually reassess and solidify their business models. "It creates discipline, builds energy and gets them used to pressure," Abrar says.
This article was originally published by WIRED UK
