Intermixing with Ga from the substrate, and In over Ga segregation during strain-induced formation of InGaAs quantum dots are studied experimentally with electron diffraction (RHEED) and theoretically with a kinetic rate equations-based growth model. Our growth model yields the temperature-dependent critical time for quantum dot formation. The results reproduce our RHEED data very well. Furthermore, the quantum dot volume calculated with the model agrees with independent measurements. Calculations of the time-dependent strain energy inside the quantum dots establish strain-relaxation by quantum dot formation.