How do business incubators work in the Internet world?
Driven by companies such as Idealab and Divine Interventures, Internet startup incubation has become popular recently. These incubators are based on the concept that turning an idea into dot-com success requires rapid execution. A Web startup that joins an Internet incubator is given access to that group’s network of strategic and financial support services. In many cases, the incubator assigns a management and creative team to the new business in order to get its site up and running in a matter of weeks. In addition, because these incubators focus only on Internet businesses, new startups are able to tap into the skills of more experienced members. How do incubators choose the businesses they work with? Like venture capitalists, incubators impose strict selection criteria on their prospects. While some accept a mix of industries, many focus on a single niche like the Internet, technology, or biomedicine. The process for applying to an incubator is similar to getting equity financing.
