What Do Startup Incubators Do?

Updated on 01/10/2024

Startup incubators are support programmes specifically designed for early-stage startup businesses. Ultimately, the incubator aims to nurture startups by supporting them through early product development and customer acquisition.

Within the incubator, a company will refine its idea, build out its business plan, work on product-market fit, identify intellectual property issues, and network in the startup ecosystem. 

Studies show that 86% of new ventures will only enjoy a 5-year lifespan or less and 2 out of 10 new businesses fail in the first year of operations. These statistics alone show just how crucial early support is for survival. 

What Is The Difference Between An Accelerator And Incubator?

The terms "accelerator" and "incubator" are often assumed to represent the same concept, however there are a few key differences that business owners should be aware of before joining.

Startup Incubators work with companies (or single entrepreneurs) that are earlier in the startup process, helping them to refine their business ideas and build their company from the ground up.

Incubators are more open-ended than accelerators, and aren't usually designed to rapidly boost growth. Instead, incubators nurture and mentor startups over longer periods of time.

Accelerator’s however, provide early-stage companies that already have a minimum viable product (MVP) with the education, resources and mentorship needed to promote what might otherwise be several slow years of growth into a few short months.

So, accelerators focus on scaling a business while incubators are often more focused on innovation.

Co-working is a big part of the incubator experience and has been split off as its own separate business offering around the country, with co-working spaces, like Tramshed Tech, charging rent for access to utilities.

Some accelerators offer a co-working space, but most provide companies with private office space or let them find it on their own.

The Tramshed Tech Startup Academy 

Tramshed Tech is a startup ecosystem, home to 50+ companies ranging from pre-revenue start-ups to scaling businesses with 600+ registered members from the digital, creative and tech communities.

Tramshed Tech is the best place to start and grow your business because we understand the challenges entrepreneurs face. We build beautiful workspaces with business support and skills programmes to help businesses thrive.

One of the many business support schemes we run here at Tramshed is the Start Up Academy.

The twelve-week incubator programme covers all aspects of building a successful business from idea generation and planning to finance, product development and team building.

Call us on 029 2010 3090 to speak with a friendly member of the team about our Tramshed Tech Start Up Academy. 

Learn more about the Tramshed Tech startup academy here.

What Are The Benefits Of Startup Incubators? 

Incubators will bring substantial benefits to startup businesses, including:

1. Exposure To Mentors

Access to a number of experienced mentors means there are great opportunities for learning during an incubator program.

Many start up incubators offer workshops and panel discussions, which are both incredibly helpful in supporting early businesses development. 

Whether it's refining the business model, product development, go-to-market strategies, or handling specific challenges the startup is facing, mentors provide personalised feedback that can significantly help the business at this early stage.

2. Networking Opportunities

If you want to build a strong network among other entrepreneurs and investors in your industry, incubators often provide you with the perfect method of doing so.

Incubators often have relationships with venture capitalists, angel investors, and other funding sources, and therefore being part of this allows startups to network with these potential investors through pitch events, demo days, and one-on-one introductions. 

Some incubators also bring in guest speakers, industry leaders, and experts for talks and events/workshops.

Networking with individuals who have strong industry knowledge can allow startups to gain valuable insights and potential partnerships with these individuals. 

3. Access To Funding

Funding is the second largest reason why startups fail as they simply run out of cash. Making sure your business has sufficient funding is therefore crucial in determining not only the growth of your business, but the life of it.

All businesses involved in the Tramshed Tech start up academy will have the opportunity to pitch to a panel of investors whereby one lucky business will receive a prize of £10,000 in equity-free cash, awarded directly from ‘Google For Start Ups’.

4. Credibility

Another benefit of joining a startup incubator is the credibility and validation you receive from it. 

This is because incubators often have competitive application processes, and only a small percentage of startups are typically accepted.

Being chosen by an incubator shows that the startup has been vetted by experienced professionals, which will naturally reassure investors, partners, and customers that the company has potential.

Discover tips on how to be accepted to a startup incubator in our blog.

5. Shared Space

As touched on above, incubators often provide access to office/co-working space, office equipment and administrative support, which can significantly reduce overhead costs for startups.

This enables founders to focus on product development and scaling, without worrying about operational logistics.

For more information about what we do, tips from our experts and everything in between, check out our news page or get in touch to speak to a friendly member of the team.

Written by Kate, for Tramshed Tech.