It is no secret that bringing a startup from scratch to success is a challenging and demanding job which requires a lot of experience in managing people and the regulatory framework of the country where the startup is located. Incubator programs help new startups by providing them with management training and in some cases the capital needed to bring their product to market. In other words, business incubators can be described as a catalyst tool for either regional or national economic development. Naturally, blockchain startups can benefit a lot from such programs so here is a look at some of the top blockchain incubator programs for startups.
Why Do Blockchains Require Incubator Programs?
Building any company is a complicated process that requires a lot of hard work, dedication and passion along with the necessary capital to pay employees for research, development, marketing and adoption at later stages. Traditional routes of acquiring these funds have been venture capital funds and Initial Public Offerings or IPOs. Blockchains have enabled an entirely new form of raising capital known as Initial Coin Offerings which allows the startup to issue tokens which can vary in use and application. Venture capital is a type of private equity in which an investor or group of investors provide capital for a company in return for a stake in the company. An Initial Public Offering is when a company starts selling their stock to both institutional and individual investors before being listed on a stock market like the NYSE or NSE. This allows the company to take on more investment capital, and also to allow the initial investors and company founders to take some of their investment off the table to realise some profits. Typically, a company might take on a few million in investment from venture capital firms in its early stages, but in 3-5 years time, they go public to bring in hundreds of millions to drive further growth.
Incubator programs are similar to VC funds, but they provide additional benefits like grooming the company before going to VC’s and also facilitate introductions, typically by running a pitch night at which clients present their businesses and investors come along to watch and listen. Most blockchain startups in the industry are being run by young people who have minimal experience with managing a business long term to drive growth. Therefore, both incubators and startups can significantly benefit each other. Some of the best blockchain incubator programs include:
- Binance Labs Incubation Program
Binance is the world’s largest cryptocurrency exchange and manages billions of dollars worth of digital tokens on a regular basis. Earlier this year, Binance announced a $1 billion investment fund to back blockchain and crypto startups. Following that announcement, Binance also announced the new incubation program which will take on around 8-10 companies per batch for a 10-week period. Binance Labs will hand out $500,000 to each program participant in exchange for a 10 per cent stake in the business.
- Coinbase Ventures
Coinbase is one of the most established names in the blockchain space thanks to its exchange services which provide a fiat to cryptocurrency gateway in the U.S. and Europe. In a recent blog post announcement, the San Francisco based company said, “We’ll be providing financing to promising early-stage companies that have the teams and ideas that can move the space forward in a positive, meaningful way.”
- Blockchain Centre’s Blockchain Engine Program
Blockchain Centre was established in Melbourne in 2014 to create a community of blockchain entrepreneurs to collaborate and develop the next generation of blockchain services. Blockchain Engine program is also a 10-week program designed to nurture the most promising startups in the blockchain space. More details regarding the funding and stake are to follow at the moment.
- Huobi Labs Incubator Program
Huobi is one of the largest cryptocurrency exchanges in Asia. Based in Singapore, the exchange handles hundreds of millions worth of global exchange volume. In May 2018, Huobi announced that they are launching their own Global Cultural and Creative Blockchain Lab which will invest $1 billion in blockchain based startups. Huobi plans to create a blockchain research institute with further collaborations with some of the “top global industry companies” along with “the world’s top universities.”
- CATENA (Capital Blockchain Accelerator CRYPTOTANK)
CATENA Capital based in Berlin, Germany sources and co-creates the most successful blockchain and cryptocurrency companies. According to their LinkedIn, they fund, incubate and accelerate up to an ICO (Initial Coin Offering).