Incubators - is the % worth giving up?

[Nic S.]

I am applying for incubators to get help in developing my product and growing my business. Is this the right way to go? Most of these incubators take between 2-10% and will invest in the company between 20-120k. In my mind I think is worth since I will be getting help in growing a company but also networking with potential partners and investors.
Anyone has experience in this area that would like to share?

 

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[liquidglass]

Yes it's worth it, as long as you will work the resources they give you.

Think about it, they are giving you money in exchange for something that is essentially worth nothing in hopes that one day it will be worth something. You are also getting guidance and introductions along with a 'certificate of trust' by just being in the incubator.

Now you could work on building all this yourself and if you believe you can get to it! But the resources, time, guidance, network, and money they are giving you for your (presently) worthless % can save you an enormous amount of time and stress. With time being a limited resource I would say the exchange is more than fair in your favor.

Good luck!

 

[Tiago]

Generally speaking, yes.

It depends a lot on the incubator though. Ask some graduates about their experience in the incubator you're willing to join.

An incubator is only a tool. They give you great networking possibilities, effective frameworks and good guidance. It's you who has to use them though.

 

[oldkevx]

I'm at partner at BetaBlox, a KC incubator. We are on our 13th batch and have over 90 companies we have helped since 2009. We take 5% equity in exchange for a 6 month path of support, lectures, speakers, consultations, demo day and technology. No cash award.

KC is a unique city with no egos, a helpful community and a growing ecosystem. Today over 80% of our companies are still in business. I believe the value exchange is huge for both parties. We take in companies that we know will never have a liquidity event because we believe in the entrepreneur(s), their ability to execute and our city. We have a band as one of our companies. Bands don't sell, they break up.

Look at the companies that have gone through an incubator, talk to the founders about their experience and go with what is best for you and your company.

 

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[Deleted35442]

I am applying for incubators to get help in developing my product and growing my business. Is this the right way to go? Most of these incubators take between 2-10% and will invest in the company between 20-120k. In my mind I think is worth since I will be getting help in growing a company but also networking with potential partners and investors.
Anyone has experience in this area that would like to share?

I almost went this route and glad I didn't. Accelerators Are Useless. I don't care what anyone else says. "lectures, speakers, consultations, demo day" in this forum you get the first three of those already. "Demo Day" is just fluff talk for getting a room of investors in a room to listen to you when you can do this easily on your own. Just get a free ticket to NY Tech Day, it's in April 2016 and free to go, there are investors there. If a VC likes you enough, they'll help you lead an entire series round rather than pitch to bunch of angels in these "demo days." 5-10% is saying your company is worth $1mm - $2mm at most (5-10% for 120k is Y Combinator, most go for less). Seriously, your can go to angel.co and find your own "angels" and get your own private pre-seed round if it's that good for likely more money. The only reason people give a F*ck about Y Comb is they think there's some prestige going through an incubator with "umm" Paul Graham.

We have a program here in NYC that I've been fortunate enough to meet some people involved with it known as Founder's House. Subsidized housing living as an 'entrepreneur in residence' essentially. Do what you want in the end, but if I'm working on a startup that I know can scale and go IPO/multimillion/multibillion $$$ exit, I wouldn't give away equity for chump change.

If you or anyone else here wants to go to Tech Crunch for free in NYC, see: https://techdayhq.com/events/ny-techday-2016/attendees/start
If you want to crowdfund your own seed round online: https://www.seedequity.com/
If you want an easy-to-find list of investors: https://angel.co/people/investors
Or hell, take up @Perry Rico with his $700 startup proposal (negotiate a fair exchange of equity for an MVP): https://www.crunchbase.com/organization/700-startup
Lastly, you can always go for something like this, like Perry's, they fund you and WORK for you: http://coventure.vc/

For all considering an "accelerator" or an "incubator" I say F*ck that. Don't be lazy. You can do this yourself.

 

[oldkevx]

@Cyriex just outlined the difference between KC and NYC. Do what is best for you and your company. Only you can make that decision. Make your own luck.