The most relevant supporting organisations for early-stage startups, according to Spring Board’s Startup Manual Guide, are universities, business incubators and business accelerators. These organisations can provide several assistance, starting from providing a set of business support services, such as mentorship and consulting services, to helping own offices, R&D centers and makers laboratories for startup entrepreneurs.
As a founder, before making a decision which mentorship is suitable for your startup business, it is important to understand the core of these mentorship opportunities. What is also important is to indicate the growth phase of a startup to find the best match of services according to that.
Taking into consideration the growth stage of the startup company and finding the corresponding supporting organisation, the outcome would be the following:
- Startup companies in the ideation and concept phase match best with the services provided by the university entrepreneurship and innovation units
- Startup companies in the committing and validating phase match best with the services provided by business incubators.
- Startup companies in the scaling phase match best with the services provided by business accelerators
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Innovation and entrepreneurship centers of the university
A number of colleges and universities around the world are leading the way as they introduce learning facilities labeled as innovation + incubator + maker centers. These centers focus on multidisciplinary inquiry that can foster partnerships with industry and fully leverage available grants and funding for research. Advancing these new models can help universities recruit fresh talent to help scale business, establish new partnerships for success and promote an environment where emerging leaders can explore the complex social challenges of our time.
Universities can combine their business development programs with the R&D or testing facilities available. This means that startups can build the prototype or test the functionality of their product in the university lab, and develop business plans in the university growth program. The services provided by the universities are often free, or with a minimum commitment fee.
Business incubation is a unique and highly flexible combination of business development services (mentorship, trainings, matchmaking etc.), infrastructure (office facilities, open office, meeting rooms, makers labs etc.) as well as the people designed to boost the growth of a startup by helping them to grow through the difficult and vulnerable early stages of development.
Business incubators are usually designed for the startup companies or full-scale teams who have validated their business model, built the MVP or prototype, and are ready to launch the product or service on the market. Incubation programs run normally for half a year till two or three years. During that time period the startup validates and fixes the business model, reaches the initial revenue by effective sales and marketing, finishes the initial product development and raises the first, seed-stage capital for growth.
Business incubators are suitable for startups that are not yet ready to launch their product on the market and need to figure out the exact strategy to get the sales and revenue going. Incubators also fit startups that have already launched, but need to pivot (change) their business model or product to reach the market fit.
Startup accelerators are fixed-term, cohort-based programs, that include mentorship and educational components and culminate in a public pitch event or demo day. There are specific types of startup accelerators, such as corporate accelerators, which are often subsidiaries or programs of larger corporations that act like startup accelerators.
Startups are accepted and supported in batches or classes. Peer support and feedback that the classes provide is an important advantage. If the accelerator does not offer a common workspace, the teams will meet periodically.
The primary value of business accelerators to the entrepreneur is derived from the mentoring, connections, and the recognition of being chosen to be part of the accelerator. The business model is based on generating venture style returns, not rent, or fees for services, however there might be hidden fees. For example, accelerators do not necessarily need to include a physical space, but many do. Thus, founders might need to rent or provide physical space for their business. The process that startups go through in the accelerator can be separated into five distinct phases: awareness, application, program, demo day and post demo day.
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