Incubators as Economic Drivers { Russ Yelton Yelton and Associates
Business Incubation Helps entrepreneurial companies grow by providing targeted business support and resources
Incubation Works 500,000 jobs created by incubator companies since 1980 50 incubator graduate jobs = 25 more community jobs Sources: Business Incubation Works, University of Michigan, NBIA, Ohio University and Southern Technology Council, 1997; 2002 State of the Business Incubation Industry, Sally Linder/NBIA, 2003.
The Incubation Difference + + =
History of Incubation 1959: First U.S. incubator founded in Batavia, N.Y. 1985: National Business Incubation Association founded with 40 members 2005: 5,000 incubators worldwide; 1,500 NBIA members
What Incubators Offer Help with business basics Networking activities Shared equipment & services Marketing assistance Help with financing
Incubator Staff An incubator manager may have experience In business consulting or development As an entrepreneur In marketing and sales
An Incubator Client might be a scientist with a new technology a serial entrepreneur launching a new start-up company a home-based business owner ready to expand
Types of Incubators Service (6%) Specialty (3%) Manufacturing (7%) Technology (37%) Mixed Use (47%) Source: 2002 State of the Business Incubation Industry, Sally Linder/NBIA.
Incubator Sponsors Educational Institutions Government Entities Economic Development Organizations Source: 2002 State of the Business Incubation Industry, Sally Linder/NBIA.
Feasibility Study Evaluate market Focus Stakeholders Potential Users Framework of operation Yes, No, Conditional Go Business Plan
A Good Investment $1 public investment in incubator = $30 in local tax revenue 84% of graduates stay in community Public incubator jobs @ $1,100 Other public jobs created @ $4,570 Source: Business Incubation Works, University of Michigan, NBIA, Ohio University and Southern Technology Council, 1997; "Cost Per Job Associated with EDA Investments in Urban and Rural Areas," Amy K. Glasmeier, The Pennsylvania State University, 2002.
Types of Programs Co-work Spaces Accelerators Incubators
Co-Work Spaces Shared open space Long tables Usually no private offices No rules Heavily software focused Focus: Creating a sense of an entrepreneurial community
Accelerators Take equity Has an investment fund Can be software focused but changing Strong management focus Focus: Creating personal wealth/quick exits
Incubator Lots of rules! Access to many different programs Space reflects types of companies community wants Focus: Job creation
Mixture of Programs Blending of approaches Combination of program attributes Can be confusing to stakeholders Continues to evolve Blending of spaces
Vetting Process Focus on : Market Team Funding Business development needs
Engagement Open book accounting Quarterly benchmark goals Monthly check-ins Monthly group meetings
Metrics # Jobs created Sales Funds Raised Taxes Paid Assets
Programming Mentor s Group Executive in Residence Lunch and Learns Shared Equipment Revolving Loan Funds Technology Demonstrations Youth Programs International Connections
Mentor s Group Experienced professionals Various disciplines Facilitate discussions Utilize in Lunch and Learns Can be C-Level mentors Develop appropriate agreements (nondisclosure/engagement) Couple of hours/month
Executive in Residence In-house C-Level Successful Exit In-depth time with clients Deeper network of contacts Successfully raised funding May transition into companies/exit EIR status
Lunch and Learns Engages larger community Source of deal flow Utilization of Mentors/EIR Expands program outreach Stream live on-line
Shared Equipment Cut down startup costs Seldom used equipments Food kitchens Biotech space AzCoreLabs.com
Revolving Loan Funds Non-bankable clients Community Reinvestment Act Local Donors Multiple Organizations Northern Arizona Business Capital Fund www.nazfunds.org
Technology Demonstration Days Showcase companies Educate community Highlight entrepreneurs Network companies
Youth Programs Community Focus Engage future entrepreneurs YES Camp Youth Entrepreneurship Summer Camp Business plan, radio and tv commercials, logos, website
International Connections International commercialization Expands programs Exposure for incubation program Student research groups
Arizona Business Incubation Association Supporting co-work spaces, accelerators and incubators Industry best practices Annual meeting and expo
Incubation Successes
About NBIA Annual conference draws 600+ incubation professionals worldwide Quantifying incubation successes and compiling best practices World s leading incubation publisher Advises governments and corporations on business incubation strategies
For More Information Visit www.nbia.org
Summary Do homework Fully engage stakeholders Have a true program No real estate plays Hold entrepreneurs accountable Be ready to report Celebrate entrepreneurship
Questions?