IdeaPros Talks About Startup Funding and Support: Incubator, Accelerator, Venture Capital, or Super Venture Partner™?
Starting a business without funding or mentoring can be tough, and it is typically not recommended, especially if you don’t have the capital or experience needed. That leaves the common question of how to get your startup off the ground.
There are a few options available to inventors and entrepreneurs, with the most common being: an incubator, an accelerator, a venture capital firm, and now, a Super Venture Partner™ (SVP).
IdeaPros, the world’s first Super Venture Partner™, who guides entrepreneurs with great ideas through the complexities and pitfalls of the startup world, discusses which platform is right for you:
Incubators, as the name suggests, are intended to foster and grow a new business — as opposed to giving an existing business a shot in the arm to put it on a growth trajectory. According to a recent Entrepreneur.com article, many incubators operate on open-ended timelines and the focus is more on mentoring and support than funding. Given this approach, incubators are good options for brand new startups or entrepreneurs looking to start innovative and niche businesses. However, the amount of mentoring available has its limitations.
Accelerators, on the other hand, are intended to fast-track an existing company’s growth. Firms offering this type of funding and support often invest in a very specified and limited number of companies and most firms provide a tight timeline on the accelerator-funded company to hit revenue/positive ROI metrics. For example, Y-Combinator — one of the more well-known accelerators — only accepts 2 percent of its applications. Given the timelines and the nature of this type of funding and support, accelerators aren’t ideal options for startups that have novel or unproven business concepts. They also may not be the right fit for first-time entrepreneurs who may not have “cut their teeth” on the common challenges that go into building a business in general.
Venture Capital (VC) firms tend to receive a lot of attention in the tech and business news cycles, but venture capital is not a new concept. Some of the oldest firms have been around since the mid-1900s. VC firms are comprised of investors who provide capital to startups or established companies looking to expand their operations. The benefit for the VC-funded business is clear: The company receives much-needed capital to either grow or expand their business. On the VC side, the investors are looking for a positive return on their investment. When VC firms are considering an investment, they often look for high growth potential (which means less risk associated with seeing a return) and strong management teams (which also helps to hedge their bets on the success of one particular business as opposed to another).
Super Venture Partner ™ (SVP):
A Super Venture Partner™ (SVP) is ideal for any entrepreneur who wants to create a well-positioned company that will bring their product to market in about 25% of the time and money it would take to do it themselves. You’ve probably never heard of this solution until now. There’s a reason for that. IdeaPros is the very first firm to offer done-for-you business development at any stage as your Super Venture Partner™. An SVP has the experience, expertise, and infrastructure to help entrepreneurs turn their idea into a viable product and bring it to market. The SVP does all the heavy lifting that business owners either don’t know how to do or don’t have the breadth of experience and dedicated talent to do expertly. As a full partnership, a percentage of the profits are shared, with the SVP being responsible for all pre-operational milestones, while the entrepreneur becomes the partner responsible for the business once it’s ready to launch.
How Do You Choose the Right Partner?
Now that you have a little background on each of your options, let’s discuss the merits each one has to offer. While VC firms support startups by investing in the company and banking on the promise for growth, there is a lack of continual support when it comes to helping the company grow and develop. This is an area which is fostered by a Super Venture Partner™. SVPs not only help reduce your investment and time, they also generate infrastructural support from the start to help business ideas become a reality. SVPs are the way to go if you have a great business idea but need a lot more than just financial support.
With accelerators, some funding is provided, but competition to get into one is difficult; with an unproven business model, getting accepted is nearly impossible. And, if you are accepted, plan on having a really strong management team at the ready — or else you aren’t really getting in. Incubators are related most closely to an SVP, but there is still quite a difference between the two, and that has to do, in part, with time. While incubators are in it for the long haul and work with novel startup ideas with an open-ended timeline of up to 36 months, SVPs offer support to startups with the focus of achieving quick results. The man-power behind an SVP is directed towards building the startup effectively and efficiently. In business, time is money, and SVPs certainly save you time as they get your business ready to get to market, often within 12–18 months.
So, if you have a business model that has been tested and is ready to be put into action, especially with existing revenue, you may choose to go with a VC firm. However, if you have a great idea, but not a lot of experience in the business world, you would be better suited choosing either an incubator or an SVP.
Receiving any funding or support is a time-consuming process, and difficult to achieve no matter what your choice is. So, if you are going to head down that road, make sure you go after the right kind of partner; otherwise you will have wasted valuable time that you may never recover. As with other business decisions, the more you can speak to experts and veterans, the more informed you will be. This could be the difference between success and failure. Regardless of your approach, we wish you success in all of your new endeavors.
IdeaPros is the world’s first Super Venture Partner™, guiding both first time entrepreneurs and new companies through the complexities and pitfalls of the startup world. Set on elevating the success rate of startups with new, innovative product and app ideas, their team leverages 30+ years of experience to create well-positioned companies offering compelling products to maximize upside potential for their partners.