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How to transform a business idea into a viable business venture

Incubators and accelerators were created to assist entrepreneurs facing difficulties in starting up their business. Lack of advice, financing and management tools were among the difficulties encountered.

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Published by ConnectAmericas

Several organizations have cropped up in recent years offering specialized assistance to ‘incubate’ or ‘accelerate’ entrepreneurial business projects. They are called incubators or accelerators and their objective is to prepare companies for growth: incubators assist ventures at an early stage while accelerators provide assistance at a more advanced stage.

Incubators assist businesses at an early stage while accelerators do so at a more advanced stage

In an interview for El Sol de Santa Cruz, Alcibiades Ribeira, a financial consultant and university professor, affirms that “incubation is a process that transforms a business idea into a company, while acceleration is a process offered to a company that already exists in order to consolidate and strengthen its growth.”

These mechanisms offer an excellent source of support and assistance for small and medium-sized companies (SMEs) seeking to expand their projects and for entrepreneurs seeking to transform an idea into a viable business venture.

Incubators vs. accelerators

Just as a father offers a son protection so that he feels safe when learning to walk or talk, an incubator provides business tools, training, access to financing and professional networks to assist the start up until it reaches ‘maturity’. According to Sporabyte, incubators actively contribute to developing a business plan and channeling it to government and financial institutions for economic support.

They also offer physical work space providing basic services for the company’s operations, where typically several ventures co-exist. Sharing resources among numerous entities facilitates and stimulates the exchange of ideas and the generation of contacts, in addition to lowering costs.    

Sporabyte reveals that the duration of a company under the ‘protection’ of an incubator depends on the project’s capacity to stand on its own, but it may last for several years. However, according to Asesores Ruiz-Cabello, the main objective of an accelerator is to achieve the rapid growth of a business in a short period of time, typically 6 to 12 months. 

The main function of an accelerator is to identify management, organization and strategic deficiencies that are hindering the business’ growth and to redress this issue by working together with consultants and experts that act as mentors. Asesores Ruiz-Cabello describes how a wide contact network is also available to facilitate financing or to obtain a large customer portfolio. 

Trends

Sporabyte describes several dynamic initiatives that have developed in recent years with the support of international companies, investor networks, business experts and international organizations:  

For instance, the Wayra initiative -sponsored by Telefónica, the Spanish telecom - is present both in Europe and Latin America. It provides consulting services and offers Telefonica’s technological resources to small entrepreneurs so they can compete under equal conditions with established enterprises. It has since become one of the main ICT accelerators in the world, affirms El Sol de Santa Cruz. In fact, some companies that were chosen by Wayra are currently working for Telefónica and its supplier networks. 

Additionally, there are several independent organizations, both regional and global, comprised by a network of experts and investors that aim to identify and support ventures with high-growth potential. Among them, the global network Endeavor and the accelerator NXTP Labs, founded in Argentina, targeting Latin American ventures. There are also several initiatives geared towards specific industries, such as Media Factory, an accelerator that exclusively focuses on media ventures in Latin America. 

Another trend with considerable bearing consists of organizations that support ventures with a positive impact on society. For example, Social Lab –founded by the Inter-American Development Bank (IDB), the Multilateral Investment Fund (MIF) and Movistar Chile- is committed to supporting ventures that offer solutions to the great problems challenging society linked to poverty and inequality, as described on its website.

How to get in contact

The Latin America and Caribbean Business Incubator Network  centralizes data from partnering agencies and offers a calendar of events, news and forms for contacting the agencies. 

Likewise, Mexico’s National Entrepreneurship Institute (INADEM) offers a guide of the main international accelerators, detailing location and contact information for each entity (website, contact information, e-mail, telephone number, etc.).

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