Here in Brazil, according to the Associação Brasileira de Startups, there was a significant increase in the number of new startups: from 4,100 to 12,700, accumulating a growth of 207% between 2017 and 2019. incubators gain more and more space and interest.
And if you believe that during the pandemic this growth slowed down, on the contrary – today, they already add up to 14,065 companies with this profile.
But the success of startups is not only reflected in the number of new companies. They are also growing and thriving financially. The total number of unicorns (startups worth more than US$1 billion) continues to increase in Brazil. In 2021, they are already 21 companies with this profile.
One of the most effective ways for a small business to grow – and, who knows, become a unicorn – is to benefit from an incubator.
see below what does incubator mean and how to find the one that best suits your business.
What is an incubator?
Startup incubators are growth support programs – and scalability – for start-up businesses that often have innovative ideas, but need help structuring their processes.
Many of these programs even accept companies that have yet to take their first steps to get off the ground.
These initiatives generally do not have restrictions on the area of activity, however, it is necessary to participate in a selection process so that your project is chosen and you can start mentoring.
Who are the incubators?
Those responsible for processes in incubators tend to be institutions that have some sort of interest in social welfare, but do not necessarily seek profit by helping startups.
Therefore, it is very common to find incubator programs that are offered by universities, non-profit third sector, hospitals and other bodies that are managed by the public power.
Projects are often selected with the specific aim of finding a solution to a problem that exists in a local community, for example.
What do they offer?
Incubators offer different types of benefits to their mentees. This support depends a lot on the stage the company is already in, but it can come in the form of physical space for work and collaboration, training and networking.
In addition, some programs also offer support with technical issues of managing a company, such as the legal, tax, financial managementcost control, among other essential areas.
In practice, this support can make all the difference. According to a survey carried out by Sebrae, the closing rate in the first year of companies participating in incubators is up to 20% lower compared to independent companies.
THE incubation process It is usually divided into three steps: pre-incubation, incubation and graduation. At the beginning of the process, everything is still very incipient.
However, already in the last stage the startup will be ready to compete for its space in the market.
See below for a little more about the phases:
At this stage, the entrepreneur still does not have experience and needs a lot of help. The person responsible for the startup must mature their ideas, products and services.
In this intermediate stage, mentees receive the necessary resources to effectively develop their solution or product. This phase, which can take years, also includes a first contact with clients and potential investors.
It is when the product or service is completely mature and ready to be released to the market. Here, the startup gains its independence and needs to face the competition effectively.
Incubators or Accelerators?
Although they have the same scope – helping startups thrive – incubators and accelerators work in different ways.
While incubators help start-ups to structure themselves, and even to be born officially in some cases, companies accelerators focus on startups that are already better structured.
At accelerators prefer this profile of companies, as they are able to drive fast and scalable growth in this way.
In addition, accelerators generally prefer companies with highly profitable potential solutions, rather than focused on solving some social problem.
Also for this reason, accelerators are generally organized by private institutions, such as investment funds and large companies.
Other ways to scale your business
In addition to incubators and accelerators, the market offers other possibilities for scaling a startup – or even taking it off the ground, raising funds for it (fundraising).
You crowdfunding, or crowdfunding, are a great option for those who don’t want to resort to banks, for example. In this financing model, there are not many secrets: just choose a platform that performs the task of collecting donations, decide on a fundraising goal and the deadline.
To be more effective in these campaigns, a tip is to create interesting rewards for those who make donations, which should be more advantageous depending on the amount donated. You can be offered first-hand access to software, for example, or give away gifts.
Another option is to look for a angel investor. With the popularization of startups, this financing category also emerged, in which a usually successful entrepreneur personally contributes money to finance a startup.
To find them and try to win their support, publicize your initiative on online platforms and also face-to-face startup events
While you still do not have the support of an investor or enroll in the selection process of an incubator, check out our material that brings together 39 business management tools.
Digital solutions may not inject money into the company, but they are certainly capable of optimizing management and supporting the healthy growth of enterprises!