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What are the essential parts of the startup ecosystem?
Let’s discover the essential parts of the startup ecosystem.*
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What is an Accelerator?
An accelerator usually takes single-digit chunks of equity in externally developed ideas in return for small amounts of capital and mentorship.They’re generally characterised by a three to four month program at the end of which the startups graduate (Paul Bricault, cofounder of Amplify).
They usually require startups to demonstrate some recurring revenue.
Examples: Techstars, 500 Startups, Startupbootcamp etc.
What is an Incubator?
Incubators focus generally on startups that are very early stage and show little to no recurring revenue. They provide a workspace and can charge monthly fees for using their services.
Coworking spaces charge either a flat monthly fee or offer pay-by-the-hour formulas. They offer you a desk, wifi, access to meeting rooms, use of print/copy/fax machines, coffee & vending machines, storage lockers, kitchen, lounge/chill-out area etc. They are usually quiet but sometimes rent private offices within the coworking space so that you can work and talk with your colleagues.
More about coworking spaces here:
Mentors can help lead your idea/business in the right direction while you are focussing on “doing”.
Try to find someone who has experience in the domain of your business. Maybe you can find someone who will help you for free (friend?). Otherwise, involve him in the project with equity.
Private Investors can fund your project at its early stage. They are called “Angel Investors”.
We will cover how to raise money later on in this course.
If you want to know a bit more about angel investors:
20 Things All Entrepreneurs Should Know About Angel Investors
Venture capital is the type of private funding for early-stage firms. It usually occurs after a first “seed round”. We will learn more about funding later on.
Find out about the public funding available in your country.
You can obtain funding against equity, and you can borrow at special rates.
Have a look at the Horizon 2020 Program.
Click here: https://ec.europa.eu/programmes/horizon2020/en/what-horizon-2020
Note: This is a European initiative and just an example. You can find many more.