Virtual Incubators: Definition, Types & Uses Cases

Virtual Incubators

Virtual Incubators: Definition, Types & Uses Cases

Apr 23, 2021

For an entrepreneur, getting the proper guidance and mentorship is an integral part of their success. From the validation of their idea to evaluate their business plan and even finalizing their marketing strategies, startup founders are always on the lookout for mentors who can help them scale. And this is where virtual incubation fits into the picture.

Virtual Incubators Definition

InBIA, earlier known as the National Business Incubator Association, defines incubators as “a catalyst tool for regional or national economic development. Incubators provide a combination of space, mentoring, education, training, and informal learning opportunities. Incubators usually charge monthly program fees or membership dues in exchange for workspace and access to program offerings, mentorship, or other value-added services. It also hosts events and functions to provide networking and learning opportunities for member companies and the local community.”


The earlier virtual business incubator model requires a startup venture to set up a store at the incubator’s site. On the other hand, the virtual model allows a company to garner the advice of an incubator without physically being located at the incubator site. 


This new model suits those entrepreneurs who need the advice an incubator offers but still want to maintain their own offices, warehouses, etc.

How Virtual Incubators Work?

As the global economy transitions from labor-based to knowledge-based, the need for dedicated office space and physical presence diminishes and is replaced by virtual reality. A new generation of entrepreneurs has emerged – raised in the Internet age – that operate at the junction of physical and online worlds, giving rise to virtual incubators. These virtual business incubators do not necessarily have an on-ground office. Instead, they provide services to startups over the internet.


The five essential characteristics of a virtual business incubator are:

  1. Process orientation
  2. Bundled packaging of services
  3. Support to startups,
  4. Approach for strategy, services, and infrastructure
  5. Transforming basic ideas


Services Offered By Virtual Incubators


  • Hand-holders

Incubators are emphasizing training and mentoring, as opposed to accessing finance or networking. They address the challenges entrepreneurs face in developing their entrepreneurial capacities.


  • Network Boosters

Incubators call together entrepreneurs, investors, employees, and service providers to pool their collective contribution rather than focusing on delivering services. In such a case, the incubator is a facilitator.


  • Venture Accelerators

They typically provide a short-term program – 3 to 12 months – of training, mentoring and networking support to prepare companies for external finance.


Pros and cons of Virtual incubators

The purpose behind the whole idea of a virtual startup incubator suggests that the ultimate benefit of joining an incubator is the growth and development of the startup or business. Other positives include:


  • Fixed path to follow- schedule and syllabus
  • Quality advice assistance, workshops, demonstrations, etc.
  • Support
  • Leaning
  • Business grooming
  • Mentorship
  • free/low-cost workspace and equipment
  • Fundings or Capital


The pitfall to joining an incubator could be a lack of time for your endeavors in the startup. You tend to become a follower in the hands of the Incubators because you depend on them for funds, links, assistance, etc. This could work as an inhibitor to the success of your startup. Other downsides include:


  • Difficulty in access to Incubators and their selection process
  • Time Crunch due to commitments to Incubators
  • Nexus of Incubators
  • Excessive competition
  • Subordination to the Incubator
  • Equity at stake


Virtual Incubator vs Virtual Accelerator — What’s The Difference?




Virtual Accelerators begin with a rigorous application process. Top accelerators are highly selective, accepting less than 2% of applicants into their programs.


The ones that are accepted have already demonstrated fast growth and a minimum viable product (MVP). The accelerator’s goal is networking, mentorship, and resource allocation to escalate the business’s success. A business’s time at an accelerator usually ends with a presentation sharing their growth and development during their tenure in the program.




A few incubators select candidates through an application process, while others only work with companies or entrepreneurs passed along from within their network of advisors. Some incubators are focused on specific verticals.


Incubators likewise tend to focus on businesses or entrepreneurs from a specific geographic location or require participants to relocate to their coworking space or local community for uncertain periods.


Participants spend their time incubating with other entrepreneurs, putting forth their ideas, calculating product-market fit, and drafting a business plan. Intellectual property issues are also evaluated and dealt with.


The incubator process usually lasts a few months – but is often open-ended – and ends with a pitch or demo day where the entrepreneur presents their business idea to the virtual incubator community and investors.


The Bottom Line

Picking the exact business incubator for your startup company is of the essence. It is one of the most critical decisions one can make for their business. Perhaps, there are heaps of virtual business incubators to consider from industrial-strength, types of expertise in industrial machinery incubated, what funding round they will see you through, and the cost.


Join the world’s leading virtual incubator today!


Avalgon is the world’s first all-digital startup incubator. Our 12-month program is designed to maximize your opportunities of achieving a $1 billion valuation while minimizing the time needed to get there.


Unlike traditional startup incubators, the digital essence of Avalgon makes it open for every startup out there. Whether your startup is based on Hong Kong, Zurich or the United States, you can apply for our program today.


With Avalgon, your startup will receive an all-round support from global experts:

  • Application review
  • Incorporation, legal & regulatory support
  • Technical development
  • Creation & launch of a Security Token Offering (STO)
  • PR & digital marketing support


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