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Our guide on business incubators

20 November 2020 by National Bank
Business incubator

Business incubators are booming. There are thousands of them all across the country that can help entrepreneurs of all kinds. The government of Canada has actually announced grants for these organizations in order to power innovation and entrepreneurship. 

Why is it important to join an incubator, and how do you pick the right one? Our expert shares his professional advice on the matter. 

What is a business incubator?

A business incubator is an organization that helps entrepreneurs who are trying to start a business. Incubators guide the participant and offer mentorship, training and tools that will allow them to structure their idea and bring it to life. “Any entrepreneur can join an incubator; they will offer them services specific to their field, type of start-up, and the kind of idea they’re trying to realize,” explains Éric Labelle, Director, Startups, Technology and Innovation Banking at National Bank. 

Joining an incubator can also make an entrepreneur more trustworthy in the eyes of investors and banks, which would allow them to get financing more easily or access credit facilities to achieve their goal. 

Business incubators vs. accelerators

The concepts of business incubators and accelerators can be confusing, especially since some play both roles. Put simply, the incubator helps entrepreneurs launch their business, whereas the accelerator allows the entrepreneur to create their idea and bring it to life in the incubation phase.  

An accelerator is an organization that offers a program that usually lasts four to twelve weeks, during which the entrepreneur has access to highly influential players in the industry who will help them connect with the right people in order to take their project further. 

Incubator and accelerator programs offer many high-end resources and materials to their participants, such as test labs, 3D printers and specialized software. They also benefit from shared workspaces and brainstorming sessions. The synergy created between participants is often what helps entrepreneurs take their ideas to the next level. 

How do business incubators work?

When an entrepreneur joins an incubator, they gain access to lots of training opportunities on entrepreneurship, financial planning and market entry. They will also be introduced to other entrepreneurs who can share their experiences and give them advice on the business they’re trying to start. “In an incubator, the entrepreneur will be challenged to rethink their idea with the right guidance so they know exactly what they should do and how to strategize,” the expert continues. 

How do you pick a business incubator ?

To choose the right incubator, ask yourself these questions to ensure it meets your needs:

  • What kind of support is offered? Some incubators only offer a workspace at low cost for start-ups, but most also offer support services, mentorship and financing. 
  • How much does it cost to join the incubator? It varies from one incubator to another. The incubators of some universities offer completely free services. Others provide a space at no charge to their incubated businesses, but take share capital or offer various services billed at a flat rate. Find out whether the incubator charges for its services or if they’re free. 

Labelle points out that each incubator has skills and a niche that’s specific to one area. “For example, an innovation or healthcare business wouldn’t join an incubator that specializes in culture; there would be no benefit.” That’s why it’s always important to pick an incubator after evaluating their offering, their expertise, their support network, and most of all, your own needs and goals. Each incubator has partners that enhance their offering. 

When you’ve pinpointed the incubator that best matches your start-up, find all the relevant information you need. Are they open to anyone or do you have to go through a selection panel? Can you access it at any time or only during specific periods?

What are the benefits of doing business with an incubator?

“There are so many! Any company that enters an incubator will not come out the same.” In Labelle’s experience, many entrepreneurs end up starting a business that’s different from what they envisioned before they joined an incubator. On top of the investment and financial aspects, businesses will benefit from being able to set up, perfect and validate their strategy in terms of commercialization, development and conceptualization. They will also have access to a wide network of contacts, partners, and sometimes even lawyers. “Entrepreneurs can meet people they never would have had a chance to meet; they can work on their strategy with them, and find partners for market entry and advertising,” he adds. 

How have incubators adapted to the pandemic? 

The exceptional circumstances of 2020 have forced many companies to reinvent themselves, and incubators are no exception. “It was complex for incubators, as their strength lies in face-to-face meetings with people who can provide mentorship and coaching; they quickly had to pivot to virtual meetings,” the expert explains. The positive aspect of this transition is that they were able to expand the pool of businesses that could participate in their programs beyond their geographical area. Thus, businesses and start-ups in Europe or the United States were able to join incubators that are usually hyperlocal, and Quebec businesses were also able to join European incubators. 

Examples of incubators*

Incubators in Montreal

  • Centech: This non-profit organization opened to everyone is a world-class business incubator based in Montreal dedicated to deeptech companies. It offers two programs: Acceleration and Propulsion. It offers private coaching, conferences and workshops led by experts, access to labs and cutting-edge equipment, financial support, and office spaces.
  • Dobson Cup: McGill University’s start-up competition allows emerging entrepreneurs to win over $200,000 in prizes. It’s aimed at innovation-driven businesses, small and medium businesses, social businesses, and health sciences businesses. 
  • Institute for Entrepreneurship National Bank – HEC Montréal: The institute offers an incubation and acceleration program that aims to unite entrepreneurs who have innovative projects with professors and researchers from HEC Montréal.
  • La Piscine: Created in 2015, La Piscine is a not-for-profit organization and the first-ever incubator dedicated to the development of entrepreneurship in the cultural and creative sectors in Montréal and across Québec.
  • : This non-profit organization is a creative incubator that brings work spaces, state-of-the-art infrastructure, support programs, creative labs, communities, professionals, and more together under one roof. Zú is dedicated to helping start-ups in the entertainment sector build innovative, world-class projects.

Incubators elsewhere in Quebec and Canada

  • ACET National Bank: The Sherbrooke ACET allows Quebec businesses to transform their ideas into projects and helps their candidates become entrepreneurs.  
  • Creative Destruction Lab: This incubator, in association with HEC Montréal and the Rotman School of Management in Toronto, offers students practical work experience with world-renowned investors and entrepreneurs, as well as a mentorship program. 
  • MAIN: The Mouvement des accélérateurs d’innovation du Québec’s mission, among other things, is to foster collaboration between accelerators and incubators. An interactive map is available on their website. 
  • L-SPARK is Canada’s leading accelerator for Software as a Service (SaaS) companies. The accelerator offers programs focused on future innovative B2B and B2B/B2C companies, as well as targeted programs which partner with leading corporations in Connected Cars (AV), IoT and CyberSecurity.
  • Agoralliance: Incubator/accelerator for entrepreneurs from abroad. It's also a worker's COOP and a social economy business focused on improving the chances of success for French-speaking immigrant entrepreneurs in Canada.

National Bank can help you start your business. We partner with many incubators and have set up financial aid programs for entrepreneurs who set themselves apart. We also have financial solutions for participants of certain programs to allow them to focus on their business project. 

Read our guide as you start your business to get support at every step.

* The incubators on this list are endorsed by or have a partnership with National Bank. 

 

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