First of all, the incubator establishes an incubation fund and invests in the incubating enterprise through creditor's rights or equity. Because incubators can provide entrepreneurial guidance for incubating enterprises, the effect of incubator investment in incubating enterprises will probably be better than that of traditional venture capital institutions.
Secondly, the incubator can provide a platform for incubating enterprises to absorb all kinds of funds, including creditor's rights and equity. As far as equity investment is concerned, incubator can not only be a window for incubating enterprises to absorb equity funds, but more importantly, it can be a platform for incubating enterprises to conduct property rights transactions. Equity investment is the main source of funds for incubating enterprises, and it is necessary to establish equity circulation market for incubating enterprises' financing.
Finally, the incubator can become an information platform for incubating enterprise financing. For angel investors and venture capitalists, incubators can be the carrier of information exchange, providing better conditions for all kinds of investors, especially individual investors, to find and choose projects.