Launching a startup in Canada and getting a visa is a long and exciting journey, but it is not without its challenges. The road to success can be rocky, and as a newly established business, startups face many obstacles, such as lack of mentorship and resources, undeveloped management skills and others. That is why joining a business incubator program is a great idea.
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What is so different about business incubators?
When applying to a business incubator expect the following:
- There will be a price to pay (literally)
- There may be a waiting list
- There will be fierce competition
- There will be many documents to prepare
- There will be high expectations to meet
Business incubators help overcome many problems startups face, ranging from helping manage business operations to providing capital. It is no wonder that being accepted into a business incubator program (or another organization type) is one of the requirements for the Canadian Start-up Visa program.
However, being accepted by an incubator program is easier said than done and there are many things to consider when applying to one.
What is so different about business incubators?
The eligibility requirements for the Canadian Start-up Visa will require you to get a letter of support from a designated organization. There are three types of designated organizations, including:
- Venture capital funds
- Angel investor groups
- Business incubators
First thing to know about business incubators is that they are not like other designated organizations. Venture capital funds and angel investor groups provide startups with investments, usually in exchange for equity. They have their own set of requirements and application procedures, and operate a bit differently than business incubators. Their biggest difference is the scope of support they offer to startups. While both venture capitalist and angel investors offer investments to startups, angel investors can provide mentorship and guidance. However, business incubators can go further than that. They offer more, much more.
Business incubators are organizations that provide startups with necessary help to get their business off the ground. They do so by providing various services, such as administrative functions, office space, mentoring and management training or investments. These services are offered in an exchange for a fee or equity shares in your company.
There are different types of incubators, which are usually working together as partnerships or collaborations, such as investment-related ventures, government entities, economic development organizations, and educational institutions. The type of organization or institutions working as collaborators will indicate the amount of resources available to the incubator. So choose your incubator in accordance with what you need from them.
It is also important to note that in order to get a letter of support from a business incubator, no investment is required, just acceptance into the program, which isn’t the case with venture capitalist or angel investors.
When applying to a business incubator expect the following:
Since business incubators differ significantly from angel investor groups and venture capital firms their application process is also different, which brings a whole other level of experience to getting a letter of support. That is why there are a few good things to know, before applying to a business incubator. Knowing what’s on the road ahead of you will give you the confidence to tackle the application process with ease.
There will be a price to pay (literally)
Nothing comes free, and that is certainly the case here. Incubators usually provide their services for a fee, but in other cases, for-profit business incubators may require equity in your startup just like other designated organizations.
The upfront payment goes into providing your business with the necessary resources to help it grow. The list of services a business incubator provides can be long, but it may include things like market research, marketing assistance, help with accounting, networking, business training programs and others.
There may be a waiting list
There are many companies trying to get into a business incubator program, and unfortunately there are often a limited number of spots available within each incubator. Making matters more restrictive, incubators accept business in batches at set times during a year, which can make them harder to get in. So expect that there mayl be a waiting period to get accepted, or before you may be able to start once accepted.
There will be fierce competition
In addition to potentially having a definite number of spots available, there will be tough competition to beat. It is in the incubators interest to have the businesses in their program suceed, which is their purpose after all. That is why several do not accept businesses that will compete with each other. It is counterproductive for incubators to support business at the detriment of another one in their program. This means that, to get accepted, your business has to truly stand out.
There will be many documents to prepare
Each designated organization has different admission and assessment standards which dictate the application process. Some may require a business plan, others a pitch deck, an in person interview or a presentation. It is therefore up to you to do your research and find out how to prepare yourself. If you apply to multiple incubators, it may be that you will have to make various documents in order to appeal to them.
There will be high expectations to meet
One thing that designated organizations are looking for in a startup is innovation above anything else, per the requirements of the Start-up visa program. Venture capitalists and angel investors may require your business to already be somewhat established, to avoid the risk of failure, but business incubators may accept startups in the ideation phase (as long as the idea is a good one).
This is what makes it challenging to convince incubators that your business idea is worth their time and resources. Your business has to have a certain novelty to it in order to stand out from the rest and catch the eye of the business incubator.
Opening a startup in Canada is an adventure, but when it comes to applying to a business incubator it is not the time to venture completely into the unknown. The stakes are too high to risk being denied your letter of support to move forward with your Start-up visa. So, equip yourself with knowledge and facts before embarking on your journey. Knowing everything there is about the business incubator application process will make it much more bearable, and in the end beneficial, opposed to undergoing the whole procedure blindly.
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