• Small Business
  • Exploring the Start-Up Incubator Model

    There’s a certain class of people for whom the business world is basically their oyster. They can practically fill their time schedules up with whatever it is they choose, such is the fortunate position they find themselves in financially. Many of these people got extremely lucky along the way, by their own admission, while a lot more got to that position through their relentless graft to go with their vision.

    Whatever the path to wealth has been for either of these people, I truly believe a lot more of them should be exploring the start-up incubator model more.

    What is the start-up incubator model?

    The start-up incubator model of doing business comes from the famous Silicon Valley somewhere south of the border and what it basically does is it entails a very successful individual who has quite a bit of money to play around with, but they choose to invest that money by taking a punt at what they deem to be promising founders of tech ventures. I swear – go down to San Francisco and ask very nicely around to take a peek inside a start-up incubator and you’ll probably see something akin to what you might have seen in one or more of those Silicon Valley culture movies.

    The mentors who operate these incubators are generally only too happy to be featured even on mere YouTube channels because this creates an early-stage record of their involvement and suggested penchant for spotting great opportunities should the projects they’re incubating blow up in a big way.

    It’s not uncommon for the terms to include an arrangement wherein the mentor is allocated around 10% ownership of the business and its intellectual property, this in exchange for early stage investment in the form of providing a roof over the heads of the development team with everything else that comes with it, i.e. food, special equipment, etc. Naturally this would imply that the mentor running the incubator believes the teams they decide to incubate have the potential to grow into a resounding success in the future. Personally though, I believe this is a business model more wealthy individuals should employ.

    They should give entrepreneurs a chance. After all, there are probably all manner of investments which they throw their money at, most of which however don’t really contribute anything to society.

    If you ordinarily put your money into stock options on the exchange what you’re only doing is making what are likely already rich brokers and their brokerage firms wealthier, whereas putting your money in the early-stage development of an idea that could work out well makes for a much better contribution to society.

    This way you are not only giving yourself your regular opportunity to make even more money for you, but you’re also giving that same opportunity to a bunch of talented and hungry dreamers who might just be sitting on the world’s next biggest thing to hit the business circuits.

    Start where you are with what you have and at the very least give your own community members a chance to turn around and work towards making your community better for everyone.