What is
a business incubator?

What is
a business incubator?

Like business accelerators, business incubators are designed to help start-up and early-stage businesses grow and thrive.

And as with accelerators, there are lots of business incubator programmes in the UK.

They specialise in different sectors and areas of focus up and down the country.

Business incubators provide start-ups and early-stage businesses with the support and resources those young companies find difficult to access.

Their support might involve access to networks, investors and mentors, or co-working space alongside other businesses and experienced professionals.

  • Co-working space: Physical incubators – as opposed to virtual ones – often provide a space for businesses to work alongside and learn from each other.
  • Networking opportunities: You can share ideas with other SMEs and entrepreneurs within the incubator, while also gaining access to the incubator’s networks.
  • Potential investors: Incubators typically make seed funding available, alongside exposure to investors.
  • Workshops: Access to experienced mentors and advisers means there are great opportunities for learning.
  • Reduced rates: Incubators sometimes provide access to products and professional services – accountants or lawyers, for example – at a discounted rate.

Support varies between incubators, so make sure you understand what they offer and that they provide the type of support you need.

Business incubators don’t accept every business that applies to join their programmes.

This is mainly because they seek a return on their investment.

Consequently, they will typically take an equity stake in your business in exchange for providing its services.

Likewise, equity investment may not be something you’re interested in.

Perhaps you don’t want to dilute your share in the business.

Or, maybe you prefer other types of funding (such as debt finance).

It all depends on you, your business and your approach to growth.

If you have access to similar benefits via your own network, you can take advantage of them without selling a stake in your business.

  • Universities and academic organisations
  • Non-profit organisations
  • Commercial organisations
  • Venture capital firms

The Government has collated a report that explores the landscape of business incubators and accelerators in the UK.

You can view that report here.

Don’t think a business incubator is right for you?

Use our Finance Options toolLink opens in a new window to find out which type of finance suits your business.

Finance Hub guidance and information

Making business finance work for you

Making business finance work for you

Starting a business doesn’t come with a set of instructions.

We know that understanding the many different types of financial product in the marketplace can be difficult.

Our Making business finance work for you guide is designed to help you make an informed choice about accessing the right type of finance for you and your business.