Starting a business is not an easy task, and many startups face challenges such as accessing capital or finding demand for their product. However, individuals embarking on their entrepreneurial journey are not alone in this path: associations, incubators, and hubs can provide them with the guidance they need to bring their project to success.
According to CEPYME data, six out of ten companies in Spain do not survive more than five years. The OECD estimates a 74% failure rate in the first year. For startups, the current average lifespan is 3.12 years, according to data from the 2023 Entrepreneurship Map by South Summit.
In Latin America, nearly 70% of investors acknowledge that 10-40% of supported startups end in failure, according to a report by the Rockstart accelerator. The reasons attributed to this statistic in the report vary (lack of experience in the founding team, difficulty accessing capital, absence of ‘product-market fit’ or alignment with the market), but one thing is clear: every bit of assistance is valuable to transform a business idea into a profitable project with long-term prospects.
To meet this need, various associations, communities, and specialized advisory services support entrepreneurs in product design, accessing funding, and internationalization or project growth. This guidance allows novice entrepreneurs to benefit from the experience, knowledge, and connections of other businesses and experts in the ecosystem.
Main opportunities for entrepreneurial advisory
Accessing quality advice tailored to business needs is not always easy, but identifying the best partners can make a difference in business growth.
Incubators and accelerators
These entities play a significant role in the entrepreneurial ecosystem, fostering project growth with advisory resources, networking opportunities, and even funding.
Incubators help innovators transform business ideas into companies, providing workspace, training, and specialized guidance. Accelerators also offer mentoring services and typically provide funding to companies in a more advanced stage of growth with more developed business proposals than incubators. These companies should already have, for example, a minimum viable product.
Notable international organizations include Y Combinator, 500 Latam, Founder Institute, Wayra (and its branch in Latin America Wayra Hispam), Mass Challenge, Start-Up Chile, Lanzadera, and Incubar Colombia. In Spain alone, there are over 200 accelerators and incubators, receiving more than 120 applications annually. To capture their attention and gain access to their guidance, it will be essential to stand out with a strong and innovative entrepreneurial proposal.
Communities and specialized hubs
From geographical innovation hubs to international entrepreneur communities, various organizations gather essential business advisory resources for entrepreneurs.
Examples include Startup Valencia, Barcelona Health Hub, Buenos Aires Innovation Park or ImpactHub Monterrey. Entrepreneurs can also turn to locally focused associations based on their geography, such as Chambers of Commerce, the Entrepreneur Association of Mexico, or the Entrepreneur Association of Argentina. Regarding communities, the most well-known is probably Endeavor, currently present in more than 40 countries, offering its members everything from mentorship connections to access to events on innovation and entrepreneurship.
Advisor tips
Entrepreneurs with a startup in a more advanced stage of development can choose to establish their own advisory board with industry professionals. Typically, these experts acquire stakes in the company in exchange for their advisory services, which may focus on various areas such as legal, technological, marketing, sales, talent management, etc.
When identifying the best advisors for the company, the entrepreneur should consider factors such as transparency, personalized approach, relevant previous experience, past success cases, and a good alignment with the goals and values of their startup.
What advantages does business advisory provide?
The guidance provided by entrepreneurial advisory services is crucial for helping entrepreneurs define their business strategy, from business planning to product design and product-market fit evaluation. This results in:
- Business growth boost. The focus is not merely on survival. With specialized guidance and valuable advice, startups and scaleups can develop their business proposals and explore new markets and profit opportunities.
- Networking opportunities. Contacts play a significant role in the success of a startup, and advisory professionals can be a valuable addition to an entrepreneur’s professional network. They serve as a bridge to establish connections with potential clients, business partners, other mentors, investors, and more.
- Fundraising. In addition to providing capital to startups, as is the case with accelerators, business advisory services can guide entrepreneurs in addressing one of the significant challenges they face: accessing funding. Identifying all available funding avenues and knowing how to pursue them (such as preparing for a capital round) are the kinds of insights that help companies grow.
- Quality information. Having perspectives, advice, and reliable data based on firsthand experiences is a valuable resource. This allows entrepreneurs to make well-informed business decisions, thereby reducing the risk of repeating mistakes made by others.
Entrepreneurs can receive a range of support through available business advisory opportunities, including educational, financial, strategic, legal, and even emotional assistance. Equipped with these diverse resources, an entrepreneur gains valuable tools such as expert opinions and strengthened networks to define and implement their business strategy. This comprehensive support ensures that the entrepreneur is better prepared than ever to drive their business project forward successfully.
