With the rise of esports startups in the scene, their survival and thriving will require that they be given and find the needed support to take off, and that will be done through certain programs. They are what we refer to as business incubators.
What are business incubators?
Business incubators are programs designed to help startups through mentorship, investors, workspaces, and other forms of support [administrative, equipment, training] to help them be established. They provide coaching for businesses looking to take off with their promising ideas and help entrepreneurs build up on their ideas. They help these companies develop a MVP (minimum viable product) and then help make the product marketable. Companies that have MVPs can then move on into the business accelerator program,
Incubators Vs Accelerators
These terms have been used interchangeably, but they are different programs that serve different purposes. Incubators may have no MVPs and no viable business models, as they may also be unsure of when to launch an MVP. Accelerators on the other hand have an MVP and will be close to product launch, a business model, are operational at a certain level, and will be looking for seed starter funds.
Ways To Get Into An Incubator Program
To increase your chance of acceptance in an incubator program, you may want to consider doing the following:
- Be serious about your application: The entry into these programs are very competitive, so when making submissions ensure the application is polished enough to warrant a screening and probable selection. Make sure there are no misspelling of words, provide elaborate answers to questions, and be organized.
- Prepare your pitch: This is what will set you apart from the rest of the startups and applicants — a well-prepared pitch well rehearsed for presentation. Incubators are not only looking for companies that will succeed because of the equity stake, but also recruiting future investment capital. The focus should be on how the business will succeed, with a demonstration on the ability to execute.
- Form and maintain relationships: It is very likely that some startups may not be accepted by the incubator program. Still keep in touch with the program managers, as you send them occasional milestones of your achievements, or events you think will be of interest to them. The important thing to do as startups is to build networks that will last, and incubator programs should be considered because they too will have a good database of contacts and potential clients.
Examples of Successful Incubators and Accelerators
- Y-Combinator: Y-Combiantor is a pioneer in the startup incubator/accelerator space. Each year it funds a group of new startups $120K, reducing friction between founders. Companies it has been involved with so far have a combined valuation of over $100B. Some of the notable companies include Airbnb, Twitch, Reddit, Coinbase and Dropbox.
- 500 Startups: This is a seed and early stage capital fund consisting of 4 major funds and 13 micro funds with startup investment in at least 60 countries. Some of these startups include Udemy and Credit Karma, with exits including sales to Google and Rakuten. They recently took over ½ of the board seats in Abu Dhabi Financial Group, where they have taken in equity.
- MassChallenge: This program has locations all around the world, including the UK, Switzerland and Mexico. There have been over 80,000 jobs created through this program, and they are heavy on Biotech and Fintech.
- Plug and Play: Plug and Play has put 51% in investments into pre-seed ventures, invested in a whooping 262 startups in 2017, and holds networking events every year. Its portfolio companies have raised about $7B combined, with checks written from $25,000 to $500,000 by the program’s in-house VC.
- Wayra: Wayra began in Latin America, expanded to Spain and then got launched in the UK. It has made investments up to $50K in startups, with 45% ventures having female founders, Wayra is backed by one of the biggest telecommunications companies in the world, Telefonica.
We will highlight the crucial role that incubators and accelerators have on the esports industry and showcase the journey of entrepreneurs who have leveraged these programs to propel their businesses forward.
Esports has helped create jobs for lots of people. Interested in knowing about the business side of esports? Listen to the Gamers Change Lives Podcast! We get experienced guests from all around the world featuring.
Written By Jeffrey Osei-Agyeman
