Can Business Incubators Impact the Start-Up Success? India Perspective!

Abstract

Purpose: The purpose of this research is to understand the role and impact Business Incubators (BI) Start-ups success. Can it create an effective alternative source of funding for Incumbent small and medium size ventures? The study proposes to relay better understanding on the challenges these existing Business Incubators encounter towards their Business Model, besides the need to improvise regulatory environment for start-up and angel investors. The research also discusses on the need to have professional and qualified managers for the incumbent BI and their effectiveness on start-up success, besides the latent need for a mentoring programme.

Design/methodology/approach: This study engaged structured interviews with the managers of different Incubators, cofounders of start-ups who have raised capital and others in the ecosystem. This research attempts to establish the framework for an effective Business Incubator and its process, which assists and impacts positively on the incubation process of star-ups.

Proportions to be discussed: P1: There is an impact of Incubator business model on Start-up success on fund raising of start-ups; P2: The existing incubators face challenges in managing their own business model; P3: There is a mismatch of start-up expectation between Indian start-ups need and the services offered by the Business Incubator; P4: There is a need to improve the regulatory Environment for start-ups and angel investors; P5: Professional and qualified manager will have significant impact on start-up success; P6: There is a need for effective/intense mentoring/incubation program; P7: There is a positive impact of incubation process on start-up success.

Findings: There is a positive impact of BI on start-up success. Despite the challenges these BI face in implementing via their different Business Models, resulting in gaps, an effective environment with professional managers can effectively mitigate problems and challenges, leading to positive impact of incubation on start-up process.

Research limitations/implications (if applicable): The research is based on the primary data captured from Business Incubators and Start-ups. The concept is in nascent stage in Indian context and is maturing gradually.

Practical implications: BI’s have an effective role towards incubating star-ups, which finally generate jobs and create wealth. If these BI’s are nurtured effectively with a strong eco-system, this shall lead to economic development and over all prosperity of India.

Originality/value: The research is based on the interaction with the managers of BI’s and founders’ of Start-ups. This study is first of its kind in Indian perspective.

Keywords: Entrepreneurship, Business Incubator, Start-up, Business Model, India