Incubators and accelerators in India for startups: A beginners guide
First-time startups or newly established businesses definitely need capital to grow and expand. But simply having money and spending it will not make your business grow.
This is where incubators and accelerators in India play a huge role to help startups with the right mentorship and educational components to develop their business model in a scalable manner.
A startup incubation program is meant for businesses that are newly established and are in their early stages such as seed or pre-seed and are building a prototype.
Startup accelerators on the other hand are for businesses who have established a small customer base for themselves and proven their business model to be working by generating revenue.
Startups join accelerator programs in order to scale their business.
An incubation program is usually run by government bodies or universities but can also be run by private companies. Most of them are funded using grants which is why they usually do not charge any equity.
A startup accelerator program on the other hand is run by private VC firms or big financial entities and they charge equity for the support and help given to startups under their program.
Another difference between both these programs is the duration for which your startup is a part of it.
Generally, a startup is a part of an incubation program for anywhere between 6 months to 2 years whereas for an accelerator program the engagement is anywhere from 2 weeks to 6 months.
Incubators and accelerators in India generally intake startups in batches. Many of these programs have 1 to 3 batches every year within which you can apply to become a part of them.
Sometimes you will find that certain programs focus on a specific industry, market, technology, or stage of the company.
Researching a bit and connecting with the right people will help you identify batches and programs that you should apply to for a higher chance of being accepted in them.
Accelerators and incubators in India will have their own screening process to judge whether your business idea has the potential to grow and you will be accepted or rejected in a program accordingly.
There are usually no eligibility criteria to get into an incubation program as these are meant for businesses that have just started and are in their ideation stage.
Accelerators on the other hand might or might not have criteria to become a part of their programs but one thing that you will definitely face is a lot of competition.
Since a startup approaches accelerator programs when they already have a working business model that they want to scale, it will be quite tough to compete with other businesses that are at a similar stage.
But once you become a part of an accelerator program you get many benefits including access to a network of well renowned VC firms and the opportunity to be funded by them.
A startup accelerator in India helps you network with internal or external VCs who are a part of their community and give you a chance to pitch your product or business idea to receive further investment.
Although this is only done after the accelerator program has done a thorough fundability check for your business.
Getting funded is a major benefit if you are accepted into an accelerator program.
Having capital will allow you to scale your business by hiring the necessary people and also be able to conduct better business operations and continue building your product or service.
While you might have proof of concept by building a small customer base and generating revenue, joining an accelerator program will help you grow your operations and validate whether your business model works at scale.
Your seed stage might have shown success but it is not enough to gauge the longevity of your business model.
Being part of a startup accelerator program in India will give you access to funding that will help you scale your business in the market and see how the majority of your target audience responds to your products and services.
Incubator programs are filled with aspiring entrepreneurs and early-stage businesses to network and learn from, which otherwise would not have been very accessible.
The network you create within an incubator program can definitely help you collaborate and expand your startup later on.
Most entrepreneurs joining an incubation program are generally first-time founders or recent university graduates.
At this stage, you most likely do not have a lot of business resources. A huge benefit of joining a startup incubation program is that you get access to resources like office space and constant business support.
An incubator program offers to fund a startup typically on a fee basis instead of charging equity.
These funds are derived from institutions such as universities or municipal organizations like government bodies in the form of grants.
But there are cases where incubators are run by for-profit private companies that seek equity in exchange for a seed or pre-seed fund.
There are many startup incubators in India filled with experienced entrepreneurs and mentors.
These people who have been a part of this industry for so long bring invaluable wisdom and knowledge that can help you avoid mistakes in your early stages and make the right moves instead through their guidance.
Corporate accelerators similar to corporate incubators are those that are run and funded by corporate entities.
With a mix of corporate organizations running this type of accelerator, any startup joining such a program benefits from its wide corporate network and the mentorship that comes with it.
These types of accelerator programs are operated by Venture Capital firms or groups. VC accelerators tend to focus on helping businesses that can generate a large return for them within a 3-5 year period.
These accelerator programs have a lot of influence in the market as they use their financial power from high-income sources and networks.
Unlike a VC-operated or corporate accelerator, a government-run accelerator’s aim is not as straightforward as wanting to earn profits by gaining high returns through their investment.
These institutions are also focused on helping startups that can contribute to agendas such as keeping up with technological developments in different countries.
For example, helping more people get jobs to reduce unemployment, gaining recognition for funding the local talent, and many more such initiatives.
Corporate incubators are those that are run by corporate entities. They are great for providing budding entrepreneurs with financial resources and access to commercial market testing under this scheme.
A great advantage of getting into a corporate incubator is the ability to access resources and guidance from people who run corporate organizations.
Social or public incubators specifically cater to the needs of business ideas that help create a positive impact on society. It does not have to be a charity or non-profit organization.
You can have a business model that directly affects a social or environmental cause.
As the name suggests, academic and scientific incubators are those that support and help university students.
They provide technical, scientific, and business assistance to test and develop ideas brought by students in different institutions for a chance to see whether their idea can become a startup or not.
Incubators that have been set up by the government are aimed at helping local talent thrive and gain access to resources that they might otherwise not find for themselves.
There are many government incubators set up across different states in a country to support and build the local economy.
The Indian Institute of Technology Guwahati has the Technology Incubation Centre within its university campus.
This is one of the top institutes in the country and its incubation center follows the same reputation. It helps IIT students gain a massive amount of knowledge and resources to test and develop their startup ideas.
The Amity Innovation Incubator is located in Noida, Uttar Pradesh.
This incubation program has one of India’s largest mentoring networks with an advisory body consisting of venture capitalists, industrialists, technical specialists, and established managers to help budding entrepreneurs.
The incubator is registered as a not-for-profit society and has a team with over a decade of experience in assisting young students to become entrepreneurs.
They provide support in areas such as technology, business planning, company formation, legal & IPR assistance, and managerial assistance among many other things.
The incubator at the Indian Institute of Management Lucknow is well known for nurturing young minds and their entrepreneurial ideas into viable businesses.
The incubator has its own council under the institute that takes all its functioning decisions. Some of the startups it has funded include Techny Birds, DELIVERFUEL, AbhiCure - Your Doctor at Home, and Hypothizer.
iCreate is known for being one of the best technology business incubators in India.
This incubator program was started in 2012 and is the only one in the country that is a non-academic institution dedicated focused on developing startups based on tech innovation.
This center is supported by the government of Gujarat as well as the government of India to facilitate ‘Next Generation Entrepreneurship’.
The Indian Angel Network was established in 2006 and comprises the largest group of angel investors in India with the support of DST.
With so many influential investors as part of the incubator network, they not only provide financial support but also their wisdom through quality mentoring and input on a business strategy based on your idea.
Villgro is one of the oldest incubators in India and also one of the top programs in the country.
It is India’s first social venture incubator and aims to fund, mentor, and incubate early-stage social businesses that are finding ways to positively impact the lives of India’s poor citizens.
CIIE is the Centre for Innovation Incubation And Entrepreneurship that is built at IIM Ahemdabad.
It is a not-for-profit organization governed by a board of industry specialists, IIMA representatives, and the government that was started in 2007. It helps incubate startups in sectors such as agriculture, environment, healthcare, energy, technology, and more.
With more than $2.8 billion in assets, 500 Global is a VC firm with a presence across the world.
This accelerator focuses on investing in innovative technology companies that have the potential to grow in the long term and impact economic growth.
The Target accelerator program in India is based in Bangalore and was started in 2014. At its core, they constantly seek to help innovative ideas that stay ahead of the curve.
Their accelerator program helps entrepreneurs to scale their products and solutions by developing and testing them alongside Target business leaders with proper guidance.
The NSRCEL(Nadathur S. Raghavan Centre for Entrepreneurial Learning) is situated in IIM Bangalore and is an accelerator program to help entrepreneurs gain access to resources to build the future of India.
A unique aspect of this accelerator is that they have a specific Women Startup Program for promoting entrepreneurship among women and supporting them in every way possible.
Zone startups is a global network of accelerator programs.
In India, it is a part of BRTSIF(BIL - Ryerson Technology Startup Incubator Foundation) which is a not-for-profit organization that was set up in the form of a joint venture between BSE Institute Ltd., Mumbai, Ryerson University, Toronto, and Simon Fraser University, Vancouver.
Tlabs is one of India’s leading tech investors focused on helping internet and mobile tech startups in their early stages.
Some of their impressive statistics include 50+ companies, $200M+ market cap of the portfolio, 7 Exits, 160+ co-founders, 150+ Mentors, and connections to over 200 Angels and most VCs in India and abroad.
GSF is another tech-focused VC accelerator program that was started in 2012.
They have an impressive 110+ companies, a combined valuation of $2 billion, 200+ founders, and a 10X multiple on their invested capital.
Cisco Launchpad is B2B corporate accelerator program that helps startups in the deep-tech niche that explore disruptive and innovative technologies.
MSME incubation scheme is one that has been launched by the government of India in May 2019 to support the growth of innovative small and medium enterprises.
People who can apply include students/entrepreneurs of technical colleges/institutes/universities, R&D institutes, NGOs dealing with relevant activities, DICs or any Institute/Organization of Central/State government, EDCs of O/o DC (MSME), MSME-DIs/Technology Centers (TCs).
They provide financial aid of up to Rs. 15 lakhs for the development and nurturing of an idea, up to Rs. 1 crore for procurement and installation of plant and machinery if needed, and up to Rs. 1 crore as seed capital support to help the idea turn into a functioning startup.
Startup India Seed Fund Scheme was started by the government of India on the 16th of January, 2016 seeing that many promising startup ideas are never realized because the individual does not have the necessary capital to grow their business.
The scheme mentioned that up to Rs 50 lakhs of financial assistance will be provided to early-stage startups through incubators. And for this scheme, the government has allocated Rs. 945 crores towards this scheme.
The government will be distributing this grant to 300 incubators across the country.
While different startup accelerator programs in India will have different criteria for application and approval, there are steps that generally remain the same and you must prepare for:
• Find and fill out an online application form
• Provide a business plan and financial projections
• Submit all your startup member details
• Assessment of the application
• Ready with your pitch deck for investors (Idea, team, target market, business model, financial projection, etc.)
• Acceptance of the funding
The application process for startup incubators in India is pretty straightforward and simple and getting accepted is also usually pretty easy especially if you are a student of the university that is hosting the incubation center:
• Startup submitting an online application(business plan, a detailed description of the startup's product or service, financial projections, and a resume of the founding team.
• Interview with the incubator team
• Offered a place in the incubator
As a young entrepreneur who receives funding support through an incubator or accelerator the last mistake you’d want to make is using the capital you gained inefficiently.
This is where Volopay can help you streamline the usage of your company capital through an all-in-one expense management software:
• Our platform is equipped to help you make online money transfers domestic and international at the lowest FX rates.
• With Volopay you can create unlimited virtual cards to manage online expenses such as advertising and SaaS subscriptions.
• Each expense you and your team make through our corporate cards or other payment features is immediately recorded on the platform for real-time visibility of expenses.
• You also get to control and set custom budgets for different teams so that each team member uses company capital judiciously and there is no case for overspending.