You have your idea and perhaps you are at the prototype stage. You are not sure of the best way to move forward and you don’t have the funds to proceed to the next stage. What do you do?
One option is to apply to a technology incubator. Israel has more than fifteen incubators situated in different parts of the country. A link to the Technological Incubators Program can be found at http://www.incubators.org.il/. The incubators are administrated by the Office of the Chief Scientist. Each incubator is directed to certain technologies and the incubation term is usually about two years. Obviously, you should check that the incubator is a good fit for you, your team and your idea and offers the support services you need. It may be advantageous to speak to other portfolio companies and alumni.
Incubators can provide early stage companies with valuable resources, which may include the following:
- Funding – In Israel you may receive about $500,000 – $800,000 over the two year period.
- Mentorship – Experienced entrepreneurs and professionals can guide you in many different areas involved in the process from idea to successful commercialization.
- Work space – You have access to work space and administrative services.
- Legal assistance – Incubators may provide their portfolio companies with legal assistance.
- Credibility – Being part of an incubator gives you and your business a degree of credibility.
- Work environment – The environment should be conducive to drive you to work hard and use your time efficiently.
- Investment – The incubator may provide you with later stage investment or help you to obtain future funding.
- Contacts – The incubator may be a source of contacts and may introduce you to contacts.
- Publicity – The incubator will usually have a process in place.
- Community – The incubators may provide a community of other talented entrepreneurs.
- Avoiding common startup mistakes – The incubator should have the experience to direct you away from making these errors.
- Early validation of your idea and team – Being accepted by an incubator may be considered as validation of your idea and team.
- Strategic partnerships – Incubators may provide this service.
- A different perspective and relative objectivity for resolving your businesses conflicts and problems.
- Confidence – Incubators may provide you with confidence by their guidance through the process of innovation to commercialization.
Although incubators provide many resources, one should also consider the less desirable points such as the cost in equity and the related loss of total control of your company. Please note that there are alternative options, which may be better for you and your company. Joining an incubator, or proceeding without one is a business decision.
I hope this post has been helpful.