There are two very different types of entities which are—confusingly –called by the same name: Incubators. But one type is more accurately called an Accelerator. The other is accurately called a Venture Builder or a Venture Studio.
An Accelerator is what most people are thinking of when they think of an ‘Incubator’. Like Y Combinator, perhaps the most famous and respected accelerator worldwide, an Accelerator runs ‘batches’ where it invites startups to apply. It chooses a few, invests a small amount of money (usually between $25K to $125K), takes a little equity (usually between 6 to 12%) and mentors and guides the startup across about 8-24 weeks. And then it sends the startup off with its blessings. Basically, the model of an Accelerator is to take a minor percentage of equity in dozens (or hundreds) of very early-stage startups. And then hope that a few of them survive and grow.
But Prototyze is NOT an Accelerator. It is a venture-studio, like IdeaLab. And a venture studio is almost the complete opposite.
We do NOT do batches where we invite startups born outside to come and apply. We do NOT temporarily mentor and guide startups in exchange for equity. And of course, we are not an investment fund.
We build our own ventures. Every Prototyze company that you see was born here. You can think of us perhaps as a conglomerate for the digital economy. The venture-studio model has attracted considerable attention in the past five years with examples of articles here and here. Some entrepreneurs may also feel this is a better option for them and many successful companies were born at venture-builders.
But we feel there’s not just one right model. Each model suits each entrepreneur’s particular needs and abilities. If an entrepreneur thinks she can (with a set of co-founders) build a successful company herself, by all means she should do that. If some other entrepreneur feels that what they need is specific and short-term guidance, then perhaps an Accelerator is better for him.
A venture-builder is not the only answer for entrepreneurs.
So we do what we do without waiting for any startups born outside to ‘apply’ to us. In fact if there’s an individual or a venture seeking ‘incubation’ from Prototyze, then unfortunately, our answer is usually ‘No’ in about 99 out of a 100 cases.
What is the 100th case where we may say ‘Yes’? IF we find an exceptional team. And IF they are working in an sector of interest to us. And IF they need what we provide, and IF understand that they will be co-creating and co-owning a Prototyze company…Then perhaps we can engage.
The options open would be for us to either ‘adopt’ the venture, make it a Prototyze company and then put all our muscle and bone into it. Or adopt the leadership team and have them lead an entirely different venture built from scratch.
We understand that this is not what most startups are thinking when they write to us. They have probably written because they confused us with an Accelerator. Understandably, because there are over 200 Accelerators in India, but less than 5 venture-builders.
While we’re happy to engage, we’re also not thinking about how to find startups born outside to adopt. An Accelerator cannot function if startups do not apply. But the venture-studio model does not require us to invite startups from outside to join us.
But IF it happens to be an exceptional case where Prototyze is aligned with the needs of an entrepreneurial team, we’re glad to explore in an open-minded manner.