Unit 4: Incubation support to starts ups.
Introduction:
Startup incubator is a collaborative program designed to help new startups succeed.
Incubators help entrepreneurs solve some of the problems commonly associated with
running a startup by providing workspace, seed funding, mentoring and training. The sole
purpose of a startup incubator
Meaning of incubation:
Business Incubation is the name given to the process, wherein an individual or
an organization supports the establishment and growth of a start-up. Those supporting the
start-up or new companies are called business incubators.
Meaning of incubation centers:
Incubator’s center is the institution that assists entrepreneurs in developing their
business and solving problems associated with it, especially in the initial stages, by
providing an array of business and technical services, initial seed funds, lab facilities,
advisory, network and linkages.
Definition of incubation centers:
According to National business Incubation Association “Incubation centre is a catalyst
tool for either regional or national economic development”.
OBJECTIVES OF INCUBATION CENTERS:
1. The objective of the scheme is to promote and establish world class incubation centers
in specific subjects/sectors such as manufacturing, transport, energy, health, education,
agriculture, water and sanitation etc. in India.
2. These incubation centers would support and encourage innovative technology-
based start-ups that have an application and/or impact in the core sectors of the
economy.
3. The incubation centers would provide the startups with necessary guidance tech
support, infrastructure, access to investors, networking, and facilitating a host of other
resources that may be required for the start up to survive and scale.
FUNCTIONS OF INCUBATION CENTERS
1. Assist the incubates in creating a sustainable, scalable & profitable business model.
2. Provide physical infrastructure and value - added support services.
3. Create a strong network of mentors who would provide sector specific knowledge &
real-world practical guidance.
4. Conduct events and inspirational programs.
5. Provide trainings and mentorship to entrepreneurs.
6. Forge partnerships and networks with academia, industry, funding sources, existing
incubators and others for the start-ups to leverage.
7. Enable access to prototyping facilities, test beds, markets, and pilot implementation for
the product /services.
8. Build a strong team with adequate knowledge and experience in guiding start-ups,
building business plans, facilitating investments, building networks etc.
SERVICES TYPES OF INCUBATION CENTERS:
Services Types of Incubation Centers can be summarized as follows:
❖ They help with business basics.
❖ They provide Networking activities.
❖ They provide Marketing assistance.
❖ Incubators help in Market Research.
❖ They provide High-speed Internet access.
❖ Incubators Help with accounting/financial management.
❖ They help in providing Access to bank loans, loan funds and guarantee programs.
❖ Incubators help with presentation skills.
❖ They link to higher education resources.
❖ They link to strategic partners.
❖ They provide Access to angel investors or venture capital.
❖ They organize Comprehensive business training programs.
❖ They act as Advisory boards and mentors.
❖ They help in Management team identification.
❖ They help with business etiquette.
❖ They provide Technology commercialization assistance.
❖ They help with regulatory compliance.
❖ They provide Intellectual property management.
TYPES OF INCUBATORS:
There are a number of business incubators that have focused on particular industries or on
a particular business model, earning them their own name.
1. Virtual Business Incubators:
Business incubators began in the 1950s and took off in the late 1990s as support for startup
companies who need advice and venture capital to get their ideas off the ground. As the
dot-com bubble burst, many high-tech business incubators did so too. Now the model of a
business incubator is changing.
virtual incubators can be defined as a catalyst for socio-economic development, providing a
process for developing early-stage ideas into viable ventures. They offer formal and
informal learning opportunities and connect entrepreneurs to an ecosystem of related
services. While virtual incubators are still getting defined in a fast-changing world, they
have a potential of disrupting the traditional business incubation model.
This new model suits those entrepreneurs who need the advice an incubator offers but still
want maintain their own offices, warehouses, etc.
2. Medical Incubator:
This is a business incubator focused on medical devices & biomaterials. For encouraging
innovation and entrepreneurship in medical technologies, through technology, business
incubation support is given to innovators, start-ups and industry.
3. Kitchen Incubator:
It is a business incubator focused on the food industry. Specialty foods are typically high-
value and, least in the beginning, low production. Starting commercial kitchen from scratch
can cost a huge amount of investment. The average food entrepreneur has to spend plenty
before even making their first batch of food item.
This need for low-cost kitchen space has led to the development of shared commercial
kitchens that can be rented for hourly or monthly rates. But finding a place to make
specialty food products is only the first step. Entrepreneurs who want t make a profit have
to successfully package, market, and sell their products, too and the food incubators
provide help with all this.
4. Public/Social Incubator:
This is a business incubator focused on the public good. Social incubators aim to provide
social entrepreneurs with the tools to expand their business. The challenging economic
environment is changing the landscape of how we do business. At one end, some
businesses avoid their social responsibility and, at the other, charities have to find ways to
be more business savvy to survive. India has embraced the concept, with a twist, creating
the idea of "social business".
5. Seed Accelerator:
This is a business incubator focused on early startups. Seed accelerators, also known as
startup accelerators, are fixed-term, cohort-based programs, that include mentorship and
educational components and culminate in a public pitch event or demo day. While
traditional business incubators are often government-funded, generally take no equity, and
focus on biotech, financial technology ("FinTech"), medical technology ("MedTech"), clean
tech or product-centric companies, accelerators can be either privately or publicly funded
and focus on a wide range of industries.
Unlike business incubators, the application process for seed accelerators is open to anyone,
but highly competitive. There are specific types of seed accelerators, such as corporal
accelerator, which are often subsidiaries or programs of larger corporations that act like
seed accelerators.
6. Corporate Accelerator:
It is a program of a larger company that acts akin to a seed accelerator. A corporate
accelerator is a specific form of seed accelerator which is sponsored by an established for-
profit corporation. Similar to seed accelerators they support early-stage startup companies
through mentorship and often capital and office space. In contrast to regular programs,
though, corporate accelerators derive their objectives from the sponsoring organization.
These objectives can include the wish to stay close to emerging trends or to establish a
funnel for corporate venture capital investments.
Corporate accelerators differ from Business incubators, which usually have a continuous
intake, due to their fixed-term, cohort-based organization (similar to seed accelerators) and
are distinct to corporate venture capital which is direct, targeted investment.
7. Startup Studio:
This is a business incubator with interacting portfolio companies. Startup studio, also
known as a startup factory, or a startup foundry, or a venture builder, is a studio-like
company that aims at building several companies in succession. This style of business
building is referred to as "parallel entrepreneurship". Today, there are over 65 startup
studios across the world, of which 17 have been built since 2013.
8. Venture Builder:
These are similar to a startup studio, but builds companies internally. Venture-builders are
also called tech studios, startup factories, or venture production studios: They are
organizations that build companies using their own ideas and re-sources. Unlike incubators
and accelerators, venture builders do not take any applications, nor do they run any sort of
competitive program. Instead, they pull business ideas from within their own network of
resources and assign internal teams to develop them such as Engineers, advisors, business
developers, sales managers, etc.
Venture builders develop many systems, models, or projects at once and then build
separate companies around the most promising ones by assigning operational resources
and capital to those portfolio companies. In its most basic form, the venture-building
company is a holding company that owns equity in the various corporate entities it helped
created. The most successful venture builders are, however, much more operational and
hands-on than holding companies. They raise capital, staff resources, host internal coding
sessions, design business models, work with legal teams, build MVPs (minimum viable
products), hire business development managers, and run very effective marketing
campaigns during their ventures' pre-and post-launch phases.
Role of Incubators in Start-up Policy
Business incubators are essentially organizations that increase the survival rates of
innovative start-ups and support the entrepreneurial process. Incubators earlier used to
focus mainly on the IT segment but now they work with companies from diverse industries
and orientations. This post discusses the concept of business incubators and business
incubation, the role of business incubators, types of incubation services, and the phases
involved in business incubation development.
Incentives for incubators:
a) Infrastructure
Host Institutes are provided capital grant of max 50% for IT infrastructure setup, subject to
maximum of INR 25 lakhs
Eligibility Criteria: Universities/education institutions, Incubation Centre/PSUs/R&D
Institutions/Private and other establishments will be eligible as an institution to support and
mentor to innovators as approved by Committee.
b) Operational Allowance
The selected incubators to get the financial support up to the tune of 5 Lacs per year for 5
years covering the deficit of the operational expenditure of Incubators
Eligibility Criteria: New incubators run by the State Government/Semi-Government
institutes/ agency/ organizations, along with existing incubators which are approved by
DST/GOI.
c) Mentoring Assistance
Selected Incubators are required to appoint minimum 2 mentors (each from Academia from
reputed institute & prominent Industry person) to be paid on honorary basis up to INR 2
Lacs per Annum.
Eligibility Criteria: New incubators run by the State Government/Semi-Government
institutes/ agency/ organizations, along with existing incubators which are approved by
DST/GOI.
d) Setup Grant
Financial assistance is provided up to a maximum of Rs. 30 lakh per incubator per year up
to a period of three years. Financial assistance will be provided to selected institutions for
setting up the incubator and other activities.
Eligibility Criteria: Host Institutes (HIs) are reputed technology, management and R & D
institutes of the state and other institutions and organizations focused on entrepreneurial
development and promotion to set up Incubators to galvanize the start-up ecosystems in
the State.
Application Procedure: The interested institution will submit its proposal to the Director of
Industries in a prescribed format who will further put it before the Executive Committee of
the Scheme for consideration and approval.
e) Recurring expense grant
a. Incubators are entitled for a grant of maximum Rs. 10 lakhs for meeting the recurring
expenditure actually incurred as per the details mentioned below. This grant would be
based on the performance of the incubator.
b. Grants for supporting operational expenses in the incubator e.g., Salaries of Regional
Coordinators, mentoring programs, networking meetings, conducting Hackathons,
etc. - Up to Rs. 2 Lakhs.
c. Annual Financial support for projects for Training and Capacity Building for Faculty
and students. - Up to Rs. 2 Lakhs.
d. Exposure to Support and Network Programs conducted by the departments
concerned. - Up to Rs. 1 Lakh.
e. Opportunity to visit National/ International startup destinations. - Up to Rs. 2 Lakhs
Internship Stipends - Up to Rs. 2 Lakhs
Miscellaneous other expenses & Administrative +charges - Up to Rs. 1 Lakh.
Eligibility Criteria: Host Institutes (HIs) are reputed technology, management and R & D
institutes of the State and other institutions and organizations focused on entrepreneurial
development and promotion to set up Incubators to galvanize the startup ecosystems in the
State.
Application Procedure: The interested institution will submit its proposal to the Director of
Industries in a prescribed format who will further put it before the Executive Committee of
the Scheme for consideration and approval.
f) Rental reimbursements
In case of Govt. owned building is leased to an incubator, no lease rent or O & M charges
are levied for a period of five years or until the incubator is self-sustainable, whichever is
earlier. In case where private premises are taken on lease/rent basis, a rental reimbursement
@ Rs. 5 per [Link]. per month or 25% of the actual rent paid, whichever is less, are reimbursed
for a period of 3 years. This shall be limited to the incubation space only.
Eligibility Criteria: Host Institutes (HIs) are reputed technology, management and R & D
institutes of the state and other institutions and organizations focused on entrepreneurial
development and promotion to set up Incubators to galvanize the startup ecosystems in the
State.
Application Procedure: The interested institution will submit its proposal to the Director of
Industries in a prescribed format who will further put it before the Executive Committee of
the Scheme for consideration and approval.
g) Investment Subsidy
In case of incubator set up in private sector, an investment subsidy of 20% of the value of
capital expenditure, other than land building, shall be provided to incubation projects that
enter into an MoU with the state within 2 years of the notification of this scheme/policy.
This subsidy shall be limited to a maximum of Rs. 50 lakhs.
Eligibility Criteria: Host Institutes (HIs) are reputed technology, management and R & D
institutes of the state and other institutions and organizations focused on entrepreneurial
development and promotion to set up Incubators to galvanize the startup ecosystems in the
State.
Application Procedure: The interested institution will submit its proposal to the Director of
Industries in a prescribed format who will further put it before the Executive Committee of
the Scheme for consideration and approval.
h) Stamp Duty/Registration fee Reimbursement
Incubators and Host Institutes shall be eligible for 50% reimbursement of the Stamp Duty
and Registration Fee paid on sale/lease.
Eligibility Criteria: Host Institutes (HIs) are reputed technology, management and R & D
institutes of the state and other institutions and organizations focused on entrepreneurial
development and promotion to set up Incubators to galvanize the start-up ecosystems in
the State.
Application Procedure: The interested institution will submit its proposal to the Director of
Industries in a prescribed format who will further put it before the Executive Committee of
the Scheme for consideration and approval.
i) Land Allotment
The private party interested to set up incubator in the state shall be eligible for allotment of
plot in industrial area for setting up the incubation facility as per the prevailing policy.
Eligibility Criteria: Host Institutes (HIs) are reputed technology, management and R & D
institutes of the state and other institutions and organizations focused on entrepreneurial
development and promotion to set up Incubators to galvanize the startup ecosystems in the
State.
Application Procedure: The interested institution will submit its proposal to the Director of
Industries in a prescribed format who will further put it before the Executive Committee of
the Scheme for consideration and approval.
Role of Business Incubators
➢ Business incubators help with the basics of business.
➢ They provide networking activities.
➢ They guide startups/ventures on how to compete with established industry players.
➢ They help startups save on operating costs.
➢ Incubators provide marketing assistance.
➢ Incubators help with market research.
➢ They provide high-speed internet access.
➢ Incubators help with accounting/financial management.
➢ They provide access to bank loans, loan funds, and guarantee programs.
➢ Incubators bring credibility to the company. This helps the company receive loans and
credit facilities from financial institutions.
➢ They create long-lasting jobs for new graduates, experienced mid-career personnel, and
veteran executives.
➢ Incubators help with presentation skills.
➢ They have a strong network of influential people who can connect startups/ventures
with established businesses and individuals.
➢ They provide access to higher education resources.
➢ Incubators can tap into their networks of experienced entrepreneurs and retired
executives.
➢ They link companies with strategic partners.
➢ They provide access to angel investors and venture capital.
➢ Business incubators organize comprehensive business training programs.
➢ They act as advisory boards and mentors.
➢ They help in management team identification.
➢ They offer marketing and PR assistance to new companies for brand establishment.
➢ They help with business etiquettes.
➢ They provide technology commercialization assistance.
➢ They help with regulatory compliance.
➢ They provide intellectual property management.
➢ They create jobs for mid-career personnel and veteran executives which benefits
communities and drives economic growth.
List of Incubator Centers in India
SN
Name Thrust Area State City Address
Sunrise Towers, Hill
NASSCOM 10K Visakh No. 3, ITSEZ,
Andhra
1 Warehouse Agnostic apatna Madhurawada,
Pradesh
Vizag m Visakhapatnam,
Andhra Pradesh
Agri Business
Incubator International
Crops Research
Agri Business Agribusines Andhra Patanc
2 Institute for the Semi-
Incubator s Pradesh heru
Arid Tropics ICRISAT,
303 Bldg. Patancheru -
5023224
1) Life Genome Valley,
IKP Knowledge Science, 2) Secun Turkapally,
Andhra
4 Park Life Science Medical deraba Shameerpet, Ranga
Pradesh
Incubator Devices, 3) d Reddy Dist, Hyderabad
Materials 500 078
1) IT 2) IITG-Technology
Healthcare Incubation Centre
IITG-Technology
3) Guwa Technology Complex,
5 Incubation Assam
Renewable hati IIT Guwahati
Centre (IITGTIC)
enrgy 4) Guwahati-781039
Mechanical Assam, India
Centre for Guwa Panikhati,down town
6 Innovation Agnostic Assam hospital ltd, building#-
hati
Incubation and 3, 7th floor, [Link],
SN
Name Thrust Area State City Address
Entrepreneurshi guwahati-6
p
Enterprising Zone-EZ,
Bihar aa 128/E, Opposite
7 Entrepreneurs Agnostic Bihar Patna Children's Park, SK
Association Puri, Boring Road,
Patna- 8000001
Bihar Industries
Bihar Industries Association, Industry
8 Agnostic Bihar Patna
Association House, Sinha Library
Road, Patna-800001
1)
Electronics
System
Ground Floor,
Design and
Business Administrative Block,
manufacturi
9 Incubation Bihar Patna IIT Patna campus,
ng (ESDM)
Centre (IC) Bihta, Patna – ϴϬϭ ϭϬϯ.
with a
Bihar.
special focus
on Medical
Electronics
Foundation for Indian Institute of
Innovation and Technology, Delhi
Science &
10 Technology Delhi Delhi [IITD], Hauz Khas,
Technology
Transfer, IIT New Delhi - 110 016,
Delhi INDIA
National Small NSIC Bhawan,Okhla
1) Energy 2)
11 Industries Delhi Delhi Industrial Estate, New
Pumps
Corporation Delhi-110020
SN
Name Thrust Area State City Address
Limited
Multidimen
sional
Shriram Institute
services in
for Industrial
the
Research (A Unit SHRIRAM INSTITUTE
manufacturi
of Shriram FOR INDUSTRIAL
ng sector of
Scientific and RESEARCH,19,
12 Plastics, Delhi Delhi
Industrial University Road, P B
Rubbers,
Research No. 2122, New Delhi -
Specialty
Foundation) 110007
Chemicals
([Link]
and Waste
st [Link])
Managemen
t
1)
Nanomateri
als and
Composite
Technologie
s 2)
Atma Ram Renewable zTM-Business Planning
Sanatan Dharma energy and Development
13 College applications Delhi Delhi (ZTM&BPD) UŶit,
University of 3) IARI, New Delhi –
Delhi electronics 110012
and ICT
related 4)
energy
/technologie
s 5) Waste to
energy
technology
SN
Name Thrust Area State City Address
6) e- waste
7) mobile
computing
8)
Embedded
systems 9)
Digital
image
processing
10) Web
technology
11) Power
System and
Power
Electronics
12) foods
and dairy
products 13)
bioinformati
cs 14)
cheminform
atics 15)
research and
technology
developmen
t 16)
material
sciences
SN
Name Thrust Area State City Address
Electropreneur Park
Electroporate 3rd Floor Library
Park by Building University of
14 Electronics Delhi Delhi
STPIDelhi/Delhi Delhi South Campus
University/IESA Benito Juarez Road,
New Delhi - 110 021
M/s Zonal
Technology
Management - ZTM-Business Planning
Business Agriculture and Development
15 Planning and & allied Delhi Delhi (ZTM&BPD) UŶit,
Development sectors IARI, Neǁ Delhi –
Unit" - ZTM- 110012
BPD, IARI, New
Delhi
