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, just like Accelerator programmes, there are lots of business incubators available in the UK, specialising in different sectors and areas of focus up and down the country.

What is a business incubator?

A business incubator is an organisation that aims to speed up and help the growth of start-ups and early-stage businesses by offering a range of support and services to the businesses it works with.

That support varies depending on the incubator but typically they provide a mix of access to networks, investors and mentors, and co-working space for businesses to operate alongside other businesses and experienced professionals.

To sum up, business incubators provide access to support and resources that are otherwise typically difficult for a young business to reach, especially at the same time.

What type of support do business incubators typically provide?

  • A co-working space: Physical business incubators, as opposed to virtual incubators, often provide a space for businesses to work alongside – and learn – from each other.
  • Networking opportunities: As well as rubbing shoulders and sharing ideas with other SMEs and entrepreneurs within the incubator, businesses also get access to the networks, advisers and investors associated with the incubator.

  • Potential investors: Incubators typically make seed-funding available, alongside exposure to investors.

  • Workshops and experience: Incubators tend to come with extensive learning opportunities for participating businesses with access to experienced investors, mentors and advisers.
  • Reduced rates: Alongside a workspace, business incubators sometimes provide access to products and services at a reduced rate. For example, they may provide access to accountants or lawyers who offer professional services.

The support and resources are not the same across the board and varies from one incubator to another. It’s important that you understand what the incubator offers and that it provides the types of support you’re interested in.

What do business incubators ask for in return?

Not every business that applies to join a business incubator will be accepted onto the programme.

One of the main reasons behind that is that incubators look to get a return on investment, usually by taking an equity stake in your business in return for the services and benefits it provides.

That’s why a business which the incubator considers to have

Likewise, equity investment may not be something you’re interested in as a business owner because you don’t want to dilute your share in the business or you’d prefer to source other sources of finance, like debt finance.

Once again, it depends on you and your business and your approach to growth and finance.

If you have access to similar benefits via your own network, then you don’t necessarily need to sell a stake in your business to access those opportunities.

What kind of organisations run business incubators?

  • 1

    Universities and academic organisations

  • 2

    Non-profit organisations

  • 3

    Commercial organisations

  • 4

    Venture Capital firms

Where can I find a Business Incubator programme?

Using data from NESTA, an innovation foundation in the UK, we have compiled an interactive map which allows you to identify Business Incubators in your local area.

Gov.uk has collated a report that explores the landscape of business incubators and accelerators in the UK, you can view that here.

Don’t think a Business Incubator is right for you? Find out which type of finance your business is suited to using our Finance Options tool.

Want to explore finance options for your business?

You can with our quick six-step tool

Find my business
finance options