

Pros and Cons of joining a start-up incubator - philipDS
http://thenextweb.com/entrepreneur/2011/04/04/the-pros-and-cons-of-joining-a-start-up-incubator/

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pg
"Incubators tend to focus on the ‘low hanging fruits’, the companies that are
either very easy to make profitable or very easy to ‘flip’ to a larger party
in a tech acquisition or a team acquisition. Various incubator operators are
on the record stating that they are ‘in for the long haul’ but the statistics
do not bear this out and incubators tend to stay away from companies that
really intend to ‘change the world’."

I have no idea if this is true of the others, but for the record, it is
certainly not true of us. It's one of our guiding principles that the ideas
with the biggest potential usually seem borderline crazy, and we consciously
seek them out.

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lux
"The 'change the world' companies are typically not launched from incubators,
though there is no reason why that should continue to be the case."

I wonder if this is simply because incubators of the YC variety are still such
a new idea that we really don't know yet whether they'll produce a Google or
Facebook yet. I doubt there's a deliberate focus on safe bets going on, since
it seems to me it's in their best interest to take more risks if they're
investing such a small amount at such an early stage.

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pg
Yes, that's exactly right. The way we invest (a large number of small bets)
means that it makes less sense for us to be conservative than it does for any
other investor. So either JM is writing about other "incubators" or he's been
misled by the fact that it takes a while for the world-changing companies to
emerge as such. At year 2, Microsoft or Google or Facebook would not have
seemed world-changing.

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rexreed
Does the author have any direct experience in an incubator, and if so which
one(s)? Might be better written from an insider perspective.

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kiubo
"If you plan on signing up for an incubator try to get an idea of how much
time there is allocated by the various partners in the incubator for this
mentoring and maybe talk to some alumni to see how well that worked out in
practice."

This is actually something I have been wondering about. Can anyone give
feedback in regard to this? pre-emptive thanks

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pmjordan
I can't help myself, I'm always extremely skeptical when incubators and YC-
like startup programmes have long lists of mentors and/or when the mentors
have no actual skin in the game. What are their motivations for mentoring,
exactly, if they hold no equity? They usually hold a full time job elsewhere
and do the mentoring on the side. Even if the motivations are purely selfless
(yeah, right) I question the utility of the advice they give under the
circumstances. Very few seem to have their ear quite so close to the startup
ground as YC.

That said, talking to founders of portfolio companies seems to be an
established (and sane) part of due diligence before accepting _any_ kind of
investment. I'd say you should apply it to seed/incubator stage as well.
(after all, you're usually giving away equity at a fairly low valuation on
paper - you can't measure advice, so you can hardly make the transfer of
equity contingent on its quality)

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grammaton
Having actually worked in an incubated start-up, I can say this article is
overstating both the pros and cons of working in one.

