There are companies out there that specialise in giving entrepreneurs the guidance they need in the early stages of their business ventures.
While there are many different stats thrown about on the failure rate of startups (globally as well as in South Africa), they all show that the majority of new businesses won’t make it past their first year. As disheartening as that might sound, there are organisations out there to boost your chances of making your entrepreneurial venture a success: these are called business incubators.
The purpose of a business incubator is to offer startup companies the support and resources they need to become sustainable operations. This usually includes a work space; networking opportunities; education, mentorship and training; strategic, technical, legal, financial management or even recruitment support.
What’s in it for them? They are essentially investing in your business and in return take an equity stake, which, when a company grows and becomes profitable, results in dividends for them. They might also charge rent or choose to sell their shares should the start-up be acquired.
Finding the right fit
If you feel your business is at the stage where it could use a jumpstart, make sure you seek out a business incubator that meets your company’s unique needs. Before you jump in, do some research on the following:
What’s available to you?
Not all incubators offer the same resources and services. Don’t just join an incubator that offers startup capital. Good business incubators usually provide a lot more than cash. Research who the mentors are and what type of training is provided.
Who are your peers?
Find out which other start-ups are currently working with the incubator as well as those who’ve gone on to grow outside of the organisation. If possible, speak to them about their experience.
What are your goals?
Before you apply, make sure you’ve thought clearly about how much you’re willing to give over to the incubator in order to be part of it. What do they expect from you and does this match up to your goals?
There are a number of South African incubators that specialise in the tech space. These include:
Bandwidth Barn – Part of the Cape Innovation and Technology Initiative, Bandwidth Barn has two physical spaces, one in Woodstock and the other in Khayelitsha. Both offer complete end-to-end support from idea stage.
JoziHub – This Joburg-based incubator provides a space for sharing ideas, collaborating and exploring opportunities in the country’s social and technological spheres. With partners including Silicon Cape and Google, members also have access to a network of innovators and valuable events.
Raizcorp – Not strictly for tech companies, Raizcorp provides business support for enthusiastic and growth-hungry entrepreneurs. Raizcorp says a start-up with no revenue joined the incubator in 2014 and was valued at R50 million in 2017. “Simply put, we support the growth of multimillionaires,” says its website.
RLabs – When Marlon Parker started RLabs in Cape Town, his mission was clear: to reconstruct communities through innovation, technology and education. The incubator aims to transform lives and empower those from its surrounding community.
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