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The benefits for a startup of being on an Incubation/Accelerator Programme

In My views on June 3, 2013 at 8:08 am
I am nearly a year in my role at DIT Hothouse and put together a short guide to startups about our service.
About DIT Hothouse entrepreneur programmes
Hothouse has a track record of 20 Years of startup support in Dublin. Prior to the launch of New Frontiers in 2011 DIT operated Hothouse Enterprise Platform Programmes since 2001. Before that again  DIT ran Enterprise Development Programmes from 1991 to 2000. Hothouse has a proven winning formula in running programmes.Of the 272 Hothouse participants since 2001, 171 are still trading and 8 have been acquired.
Since 2001 Hothouse has:
•Supported 272 entrepreneurs. 66% are still trading.
•10 out of 80 Enterprise Ireland HPSU companies in 2010 were DIT Hothouse companies.
•180 sustainable businesses created.
•Those 272 entrepreneurs created 1,252 new knowledge intensive jobs.
•€98.5m in equity investment.
Benefits of being on an Incubation/Accelerator Programme
There is somewhat of a distinction between incubators and accelerators. Incubators typically engage with earlier stage business opportunities whereas accelerators seek teams with a clear product/service offering that are at a phase where they are ready to ramp up their offering. Shorter duration accelerator programmes suit teams with a well developed investor proposition seeking initial funding for a technical build or beta phase, but do not offer an individual entrepreneur the same developmental opportunity as the incubator type programme. Our New Frontiers programme has elements of incubator (we do not take equity in the startup for example) and accelerator (our Phase 3 seeks to accelerate the growth of our participants). Many of the accelerator’s in Dublin recruit for their programmes from the alumni of our Hothouse New Frontiers programme.
In terms of the benefits of being on the Hothouse New Frontiers programme they include:
 
•Hothouse offers an extensive period of intensive support both for the development of the participant as an entrepreneur and for the refinement of their business proposition.
• Phase 2 in particular combines developmental supports with a salary stipend that ensures that the entrepreneur is able to commit full-time to the development of their enterprise.
• Phase 3 pro-actively assists participants to progress onto the most appropriate avenues and supports for the further development of the enterprise (engagement with investors, accelerators etc).
 
The specific supports offered in Phase 2 include:
•Training workshops facilitated by successful entrepreneurs and industry experts.
•Office space and facilities at Docklands Innovation Park.
•Business counselling inputs and a number of evaluation and feedback sessions.
•Investor showcase events and fora.
•Access to significant DIT Research available to license through the Hothouse Tech Transfer Office. A number of Hothouse companies such as OptiWifi, DecaWave, Brim Brothers and Aries have successfully commercialised DIT Research.
•Support via practical projects from DIT staff and students from departments such as Business, Science & Engineering.
•Access to the Hothouse Alumni network of successful entrepreneurs.
•Access to Enterprise Ireland supports and, upon meeting relevant criteria/milestones, appointment of an Enterprise Ireland Development Advisor.
How the Hothouse New Frontiers programme works
The programme breaks down into 3 distinct phases. Progression to each phase involves success at competitive pitching by the participants.
Phase 1 -Testing the business idea
The first phase is part-time over an 8-10 week period and helps participants to validate the market potential of their business ideas. These weekend and evening workshops provide information and general start-up training, allowing them to tease out their idea’s feasibility and to see whether a viable proposition exists.
Phase 2 – Business Planning
Between 50-60% of Phase 1 participants make it to Phase 2 following a competitive selection process.
Phase 2 participants receive intensive support for six months to develop both their own entrepreneurial skills and to build their business proposition. This phase entails participation in workshops, mentoring  clinics and regular reviews.
Using these supports participants detail and validate their business propositions and identify potential customers, sales channels and funding options.
Phase 2 participants must be available for full-time participation in this six month course. To facilitate this they receive up to €15,000 in supporting funding subject to satisfactory performance and development reviews at 2 monthly intervals.
The aim of this phase is to support the participants in the development of an investor-ready business plan.
Phase 3 – Business Development
Businesses emerging from Phase 2 will be guided to the most relevant supports that can best help them accererate taking in to account their particular stage of development.
Further incubation facilities and support may be available to participants for a limited period, in conjunction with ongoing support from the Incubation Centre Management team.
Is it difficult to get on one? 
 
Competition for places on the Hothouse New Frontiers programme is high, reflecting the track record of our programme. For the 23 places on Phase 1 we typically receive in excess of 100 applications. However this should not deter people from applying, quality applications will always do well in our assessment process irrespective of the numbers applying.
 
In terms of the where our applicants come from 82% of the two most recent cohorts of participants were referred by a partner organisation or a current or past participant – including 45% from Hothouse Alumni referrals and 25% from Enterprise Ireland referrals. We also actively work with Inventorium’s Swequity and Enterprise Ireland’s Start programmes in seeking applicants to our programme.
 
How best to boost your chances of getting on one, ie, what it is we look for in an application
 
Our application process is straight forward and requires information about:
 
1. Details about the entrepreneur.
2. Details about the business opportunity.
3. The stage it is at (we emphasise that we are interested in working with entrepreneurs even if they are only at the concept stage).
4. Any market research that has been carried out.
5. Approximate Financial projections (we know that at this stage these will be very approximate).
 
In terms of the type of business opportunity we seek the Hothouse New Frontiers programme is well established as a destination for software and ICT focused ventures. However we are open to any commercial idea that is innovative, can generate employment in Ireland and has the potential for export sales within 2 to 3 years.
In addition to these criteria in terms of how we assess applicants we use the FIT model. According to Timmons and Spinelli the resources necessary to successful new venture creation include the entrepreneurial team, financial resources, outside people, legal and financial advisors, technology and patents. What their research has show is that on average the better fit there is between the components of Team, Resources and Opportunity the more likely it is that the venture will be successful. We make this model freely available in advance to applicants on our application form.

 

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