Incubator Data

1. “An accelerator takes single-digitchunks of equity in externally developed ideas in return for small amounts of capital and
mentorship. They’re generally truncated into a three to four month program atthe end of which the start-ups ‘graduate,’
An incubator,on the other hand, brings in an external management team to manage an idea that was developed internally.“Those
ideas can gestate for much longer periods of time and the incubator takes a much larger amount of equity [compared to
accelerators],”he says.
Startup accelerators and startup incubators assistentrepreneurs in the journey toward becoming successful companies,buteac h in
their own way. However different these two processes are, many people confuse the two and use the terms interchangeably.
What is a Startup Accelerator?
The most distinctdifferencebetween accelerators and incubatorsis thetime frame of each. An accelerator works with startups for a
shortand specific amountof time, usually from90 days to four months. Accelerators also offer startups a specific amountof capital,
usually somewhere around $20,000.In exchange for capital and guidance,acceleratorsusually requireanywherefrom 3 to 8 or
more percent ownership of your company. As you’ll see below, these features make accelerators much more structured than
incubators.
The accelerator journey is not an all-inclusiveroad to success.Rather, itis meant to help you get to a pointat which you’re ready to
raiselarger amounts of capital.Thegoal of accelerators is to grow the sizeand valueof a company as fastas possiblein preparation
for an initial round of funding. This closely aligns with the equity accelerators requirein exchange for their guidanceand resources.
Some common and increasingly popularaccelerator programs thatyou may have heard of include: TechStars, Y-Combinators and
Dreamit.
What is a Startup Incubator?
With mentorship periods often lastingmore than a year and a half,incubators focus less on quick growth and have no specific goal
in mind for your company other than to become successful atthe rightpace. In fact, the goal of some incubators may be to prepare
your company for an accelerator program.Incubators takelittleto no equity in your company, and can afford to because they do
not provideupfront capital likeaccelerators.Many incubatorsarefunded by grants through universities,allowingthem to provide
their services without takinga cut of your company.
Because many entrepreneurs are attracted by the opportunity to keep control of their startup and the absenceof a 90 -day time
limit,you will mostlikely encounter more difficulty getting into an incubator.Itmay also be difficultto get accepted by an incubator
if your networks aren’t connected in some way, as many only accept pitches from entrepreneurs with whom they already havea
relationship.If your goal is to gain the mentorship of an incubator,be prepared to perfect and utilizeyour networking skills.
Advantages of being part of an Accelerator or Incubator
Whether you work with an accelerator or an incubator,there arepros and cons of both. For s tarters,the adviceand guidanceof
mentors can help you avoid mistakes thatcould crippleyour startup if you were tryingto go your own way. Both options also
provideaccess to capital thatmay have been otherwise unavailable,whether it’s duringor after mentorship. Additionally,both
accelerators and incubatorsprovidethe spaceto develop your idea.Lastly,being a partof an accelerator or incubator can p rovide
invaluableconnections,and some may also havenetworking events to help you boost your exposure.
Disadvantages of being part of an Accelerator of Incubator

2. Many advantages of incubators and acceleratorscomewith an opposingdisadvantage.For example, your routine and your vision
are completely your own when workingwith only your team members. Workingwith an incubator or accelerator can imposethe
opinions of your mentors and take your idea in a direction your team doesn’t completely agree with. Workingwith these mentor s is
also a bigtime commitment, and will likely requireyou to spend time away from developing your product by attending meetings
with mentors and/or investors.Additionally,your scheduledepends on your mentors. Sometimes you may have to spend time
speakingwith mentors when you justwant to get down to work without any outsi de influence,and sometimes you may want advice
from mentors whilethey arebusy helpingother teams.
How do you choose?
Choosingwhether to pursue the mentorship of an accelerator or incubator is a tough decision.First,you need to decide whether
you need the guidance,capital,and other assistancethey have to offer. With so many different accelerators and incubatorsout
there, you have many options to find the one that best fits your company. Even so, an accelerator or incubator may not be rightfor
your startup.For instance,if you’re only lookingfor capital,you may be better off reachingout to an expert to help you raise
instead.Or if you have enough capital butneed mentorship, you might want to utilizeyour network to acquirethe mentorship of a
veteran.
After choosingto pursue one of these mentorship programs, you need to decide whether you’ll benefit more from the quick growth
offered by an accelerator or the unstructured progress of an incubator.In the end, only you and your team know what’s best f or the
future of your startup.
For early stage startups,accelerators and incubators offer great ways to grow their businesses.Here aresome of the key differences
between a startup accelerator and a startup incubator.
Startup founders lookingto startoff on the right foot often turn to a startup accelerator or startup incubator for help.
The terms "accelerator"and "incubator"are often assumed to represent the same concept. However, there are a few key
distinctionsthatfirst-timefounders should be awareof if they areplanningon signingup.
Accelerators and incubators both offer entrepreneurs good opportunities early on. Founders get help to quickly growtheir business
and they often better their chances of attractinga top VC firmto investin their startup at a later point. Still,the progr ams are
different frameworks for startup success.
Let's startby breakingdown the goals of each of these types of programs. Accelerators "accelerate"growth of an existingcompany,
whileincubators "incubate"disruptiveideas with the hope of buildingouta business model and company. So, accelerators focus on
scalinga businesswhileincubatorsareoften more focused on innovation.
Accelerators
One of the bigdifference is in how the individual programs arestructured.Accelerators programs usually havea settimeframe in
which individual companies spend anywherefrom a few weeks to a few months working with a group of mentors to build outtheir
business and avoid problems alongthe way. Y Combinator, Techstars,and the Brandery are some of the most well-known
accelerators.
Accelerators startwith an application process,butthe top programs aretypically very selective.Y Combinator accepts about 2% of
the applicationsitreceives and Techstars has to fill its 10 spots fromaround 1,000 applications.
Companies are given a small seed investment, and access to a largementor network, in exchange for a small amountof equity. The
mentor network, typically composed of startup executives and outside investors,is often the biggest valuefor prospective
companies.
The mentor networks aren't small,either. Accordingto Troy Henikoff, managingdirector of Techstars Chicago,lastyear's program
had 153 mentors.
Aaron Harris,a partner at Y Combinator, said he's not surethat accelerators necessarily work as a whole, but Y Combinator's success
is due to the way itapproached incentives.

3. "A lot of that success comes back to the alignmentof incentives," Harris said."Good programs completely align all parties -- atYC all
the partners who advisethe companies have a stake in their success.We also do as much as we can to limitdistractions.Wedon't
scheduleunnecessary meetings, don't force them to work in a bigloud coworkingspace, etc."
At the end of an accelerator program,you're likely to see all the startups from a particularcohortpitch atsome sortof
demonstration day attended by investors and media. At this point, the business has hopefully been further developed and vetted.
"The goal of the accelerator is to help a startup do roughly two years of business buildingin justa few months," said Mike Bott,
general manager of the Brandery. "If you go through a good one, you'll know at the end where your startup founding team a nd
business stand."
Incubators
Startup incubators begin with companies that may be earlier in the process and they do not operate on a set schedule. If an
accelerator is a greenhouse for young plants to get the optimal conditions to grow, an incubator matc hes quality seeds with the best
soil for sproutingand growth.
Whilethere are some independent incubators,they can also besponsored or run by VC firms,government entities, and major
corporations,amongothers. Some incubators havean application proces s,butothers only work with companies and ideas thatthey
come in contact with through trusted partners.A good example of an incubator is Idealab.
Depending on the sponsoringparty,an incubator can be focused on a specific marketor vertical.For example, an incubator
sponsored by a hospital may only be lookingfor health technology startups.
In most cases,startups accepted into incubator programs relocateto a specific geographic area to work with other companies in the
incubator.A typical incubator has shared spacein a coworkingenvironment, a month-to-month leaseprogram, and some
connection to the local community.
Coworking is a bigpartof the incubator experience and has been splitoff as its own separatebusiness offeringaround country, with
coworkingspaces chargingrent for access to utilities.Some accelerators offer a coworkingspace,but most provide companies with
privateoffice spaceor let them find iton their own.
"If you need privatespace, most incubators areopen seating,and this can be distractingfor larger teams," Henikoff said."The
economics are usually on a per-seat basis,which is greatfor the firstfew people, but at a certain point itmay be less expensiveto
get your own office."
Both incubators and acceleratorsoffer a great opportunity to help young companies and ideas for startups get headed in the r ight
direction,but it's up to you where you need to start.
Seed accelerators arefixed-term, cohort-based programs,that includementorship and educational components and culminatein a
public pitch event or demo day.[1] Whiletraditional businessincubators areoften government-funded, generally take no equity, and
focus on biotech, medical technology, clean tech [2] or product-centric companies,accelerators can beeither privately or publicly
funded and focus on a wide range of industries.
The main differences between business incubators and accelerators are:[3]
1. The application process isopen to anyone, but highly competitive. Y Combinator and TechStars have application acceptance
rates between 1% and 3%.
2. A seed investment in the startups is usually made,in exchange for equity. Typically,theinvestment is between US$20,000
and US$50,000 (or £10,000 and £50,000 in Europe[4])
3. The focus is on small teams,not on individual founders.Accelerators consider thatone person is insufficientto handleall
the work associated with a startup.
4. The startups must "graduate" by a given deadline,typically after 3 months. Duringthis time, they receive intensive
mentoring and training,and they are expected to iterate rapidly.Virtually all acceleratorsend their programs with a "Demo
Day", where the startups present to investors.[5]
5. Startups are accepted and supported in cohort batches or classes(the accelerator isn'tan on-demand resource[6]).The peer
supportand feedback that the classes provideis an importantadvantage.If the accelerator doesn'toffer a common
workspace, the teams will meet periodically.

4. The primary valueto the entrepreneur is derived from the mentoring, connections, and the recognition of being chosen to be a part
of the accelerator.The business model is based on generating venture style returns, not rent, or fees for services.
Seed accelerators do not necessarily need to includea physical space,but many do. The process thatstartups go through in the
accelerator can be separated into five distinctphases:awareness,application,program,demo day,post demo day.[4]
A business incubator is a company that helps new and startup companies to develop by providingservices such as management
trainingor officespace.[1]
Business incubatorsdiffer fromresearch and technology parks in their dedication to startup and early-stagecompanies.Research
and technology parks,on the other hand, tend to be large-scaleprojects thathouse everything from corporate, government or
university labs to very small companies.Mostresearch and technology parks do not offer business assistanceservices,which arethe
hallmark of a business incubation program.However, many research and technology parks houseincubation programs.
Incubators also differ fromthe U.S. Small Business Administration's Small BusinessDevelopment Centers (and similar business
supportprograms) in that they serve only selected clients.SBDCs are required by lawto offer general business assistance to any
company that contacts them for help. In addition,SBDCs work with any small businessatany stageof development, not only startup
companies.Many business incubation programs partner with their local SBDC to create a "one-stop shop"for entrepreneurial
support.
In 2005 alone, North American incubation programs assisted more than 27,000 companies that provided employment for more than
100,000 workers and generated annual revenues of $17 billion.[2]
1. in·cu·ba·tor
ˈiNGkyəˌbādər/
noun
plural noun:incubators
1. an enclosed apparatus providinga controlled environment for the careand protection of premature or
unusually small babies.
 an apparatus used to hatch eggs or grow microorganisms under controlled conditions.
 North American
a place,especially with supportstaff and equipment, made availableatlow rent to new small businesses.
1. ac·cel·er·a·tor
əkˈseləˌrādər/
noun
noun: accelerator; plural noun:accelerators
1. something that brings aboutacceleration,in particular.
 the device, typically a pedal,thatcontrols the speed of a vehicle's engine.
 Physics
an apparatus for acceleratingcharged particlesto high velocities.
science park; n 1. (Commerce) an area usually linked with a university where scientific research and commercial development are
carried on in cooperation
Research Parks defines research parks as property-based ventures
Accelerators Vs Incubators
Accelerators and incubators both offer entrepreneurs good opportunities early on. Founders get help to quickly growtheir business
and they often better their chances of attractinga top VC firmto investin their startup at a later point. Still,the progr ams are
different frameworks for startup success.
Let's startby breakingdown the goals of each of these types of programs. Accelerators "accelerate"growth of an existingcompany,
whileincubators "incubate"disruptiveideas with the hope of buildingouta business model and company. So, accelerators focus on
scalinga businesswhileincubatorsareoften more focused on innovation.
Accelerators

5. One of the bigdifference is in how the individual programs arestructured.Accelerators programs usually havea settimeframe in
which individual companies spend anywherefrom a few weeks to a few months working with a group of mentors to build outtheir
business and avoid problems alongthe way. Y Combinator, Techstars,and the Brandery are some of the most well-known
accelerators.
Accelerators startwith an application process,butthe top programs aretypically very selective.Y Combinator accepts about 2% of
the applicationsitreceives and Techstars has to fill its 10 spots fromaround 1,000 applications.
Companies are given a small seed investment, and access to a largementor network, in exchange for a small amountof equity. The
mentor network, typically composed of startup executives and outside investors,is often the biggest valuefor prospective
companies.
The mentor networks aren't small,either. Accordingto Troy Henikoff, managingdirector of Techstars Chicago,lastyear's program
had 153 mentors.
Aaron Harris,a partner at Y Combinator, said he's not surethat accelerators necessarily work as a whole, but Y Combinator's success
is due to the way itapproached incentives.
"A lot of that success comes back to the alignmentof incentives," Harris said."Good programs completely align all parties -- atYC all
the partners who advisethe companies have a stake in their success.We also do as much as we can to limitdistractions.Wedon't
scheduleunnecessary meetings, don't force them to work in a bigloud coworkingspace, etc."
At the end of an accelerator program,you're likely to see all the startups from a particularcohortpitch atsome sortof
demonstration day attended by investors and media. At this point, the business has hopefully been further developed and vetted.
"The goal of the accelerator is to help a startup do roughly two years of business buildingin justa few months," said Mike Bott,
general manager of the Brandery. "If you go through a good one, you'll know at the end where your startup founding team a nd
business stand."
Incubators
Startup incubators begin with companies that may be earlier in the process and they do not operate on a set schedule. If an
accelerator is a greenhouse for young plants to get the optimal conditions to grow, an incubator matc hes quality seeds with the best
soil for sproutingand growth.
Whilethere are some independent incubators,they can also besponsored or run by VC firms,government entities, and major
corporations,amongothers. Some incubators havean application proces s,butothers only work with companies and ideas thatthey
come in contact with through trusted partners.A good example of an incubator is Idealab.
Depending on the sponsoringparty,an incubator can be focused on a specific marketor vertical.For example, an incubator
sponsored by a hospital may only be lookingfor health technology startups.
In most cases,startups accepted into incubator programs relocateto a specific geographic area to work with other companies in the
incubator.A typical incubator has shared spacein a coworkingenvironment, a month-to-month leaseprogram, and some
connection to the local community.
Coworking is a bigpartof the incubator experience and has been splitoff as its own separatebusiness offeringaround country, with
coworkingspaces chargingrent for access to utilities.Some accelerators offer a coworkingspace,but most provide companies with
privateoffice spaceor let them find iton their own.
"If you need privatespace, most incubators areopen seating,and this can be distractingfor larger teams," Henikoff said."The
economics are usually on a per-seat basis,which is greatfor the firstfew people, but at a certain point itmay be less expensiveto
get your own office."
Both incubators and acceleratorsoffer a great opportunity to help young companies and ideas for startups get headed in the r ight
direction,but it's up to you where you need to start.
Is A Startup Incubator Or Accelerator Right For You?
One way to help get your business off the ground, is to leverage the mentorship and investor relationship benefits of a startup
incubator or an accelerator.Firstof all,whatis the difference between an incubator and an accelerator.
What is a Startup Incubator?

6. An incubator is physically locatingyour businessin onecentral work spacewith many other startup companies. In many cases,the
startups in these incubators can all beventure funded by the same investor group. You can stay in the spaceas long as you need to,
or until your business has grown to the scaleitneeds to relocateto its own space. The mentorship is typically provided by proven
entrepreneurial investors,and by shared learnings of your startup CEO peers. Examples include Lightbank and Sandbox Industries in
Chicago.
What is a Startup Accelerator?
A startup accelerator is very similar,buthas some distinctdifferences.Your time in the spaceis typically limited to a 3-4 month
period, basically intended to jump startyour business and then kick you out of the nest. The cash investment into your busin ess
from the accelerator itself is very minimal (e.g., $20,000),but your time in the accelerator shoul d largely improveyour chances of
raisingventure capital froma third party entity on the back end, after you graduate from the program. Mentorship could be coming
from 100 entrepreneurs that are affiliated with the accelerator (many of which are proven CEOs, or investors lookingfor their next
opportunity or simply helpingthe local startup community).Examples include Tech Stars and Y Combinator.
Are These Programs Right For You?
Decidingon whether or not you should pursuestartingup your business viaan incubator or accelerator largely comes down to your
personal confidencein the defensibility of your business model,your execution skillsand your fund raisingskill s.If you have a
crediblestory and your business is nicely progressingon your own, you probably don’t need to be partof one of these progra ms.
But, if you need help fine tuning your business model or revenue model, or may be a firsttime CEO wanting to hone your skillsfrom
proven peers and entrepreneurs, then this type of mentorship could be perfect for you.
The Advantages?
The pluses of programs likethese are: (i) shared learnings and mentorship (helpingavoid typical startup pitfallsand speedi ngup
your efforts); (ii) access to capital,either within an incubator or post an accelerator;and (iii) thePR value and exposure you get from
these programs (not to be underestimated).
The Disadvantages?
The minuses of programs likethese are: (i) they can be distracting,attimes, with lots of related meetings and events with mentors
and investors (getting in the way of focusingon your own project); (ii) they can be confusingat times (getting 10 different opinions
from 10 different mentors), so you need a good “filter” on any advice–be sureto read this poston how to filter the conflicting
advice;and (iii) sometimes,sharingspacewith other companies is not always a plus,especially in longterm incubators thatmay be
carryingdead weight of under-performing companies.
Key Takeaway?
Overall,I think these programs are terrific for firsttime CEOs, that can quickly get up the learningcurvewith the help of mentors and
investors that have “been there, and done that”. Plus,your odds of raisingcapital arevastly improved given the tight screening
processes of these groups, that naturally raisethecreme-de-la-creme to the top, from the 1000′s of applicants they receive each
year. Competition is naturally fierceto get one of these coveted spots,so make sure you have a fine tuned pitch and leverage your
network to help pull somestrings for you.
And, don’t forget, if you don’t get accepted into a startup accelerator or incubator,and want to get that kind of expertise for your
business,besure to check out the new startup excubator model that is beingtested, an outsourced digital services suitepowered by
experts, that is open to anybody that is interested, provided they have the capital for the services.
EDA Study Home
The U.S. Department of Commerce Economic Development Administration (EDA), a longtime financial supporter of business
incubators,funded a research study to examine the relationship between incubator best practices and clientoutcomes. This
research - conducted by the University of Michigan's Institutefor Research on Labor, Employment and the Economy; the State
University of New York at Albany,the National BusinessIncubation Association,and Cybergroup Inc. - used a robustmethodology to
collectand statistically analyzedata,and determine specific relationshipsbetween how an incubation programoperates and how its
clientcompanies perform, as measured by a number of outcomes.
The purpose of this study is to test whether there is a causal relationship between business incubation practices and clientfirm
success,particularly after these firms havemoved out of - or graduated - from the incubation program.Usingthe results of this
study, the research team also created a Web-based tool for incubation practitionersthatmeasures their program's performance

7. compared with industry best practices and provides feedback about how they can improve their performance, and a brochure that
highlights the study's findings.
Seven Signs of a Successful Incubator
Corporate renewal is essential butimmensely challenging. Today’s hot stock is often tomorrow’s humdrum company. Many
companies address their growth gaps by establishingincubators for new efforts, and they struggle. One study of 300 such
incubators found that only 47% met their strategic goals and 24%met their financial goals. Whatmakes for a successful incubator?
Begin by recognizingthat incubation is hard. Incubators tend to be small units in much larger firms,addressinga universeof
possibility with scantresources. They get stretched too thin, become captured by corebusiness units,pursueirrelevantideas,or all
of the above. Moreover, they pursue inherently medium and long-term growth initiatives in a climatethatusually values hitting
short-term financial targets,and so they are prime candidates for cost-cuttingwhen inevitablebudget crunches arise.
Yet when incubators succeed,the results can be spectacular. IBMhas created over $15 billion in newannual revenues through its
Emerging Business Opportunities organization. Royal Dutch Shell estimates that 40% of its upstreamR&D begins through its
GameChanger program. DuPont’s Market Driven Innovation program,staffed with justsix people, built$500 million of revenues in 6
years. The opportunity in these numbers can’tbe ignored.
1. Know your archetype – Too often, companies try to become more innovativeby benchmarkingfirms likeApple, Google, and
Samsung. The problem is that these companies are completely different. The way management exercises control,the process-
driven culture, the ability to experiment freely, and several other variables dictatewhatcompanies can and cannotlet incubators
do. (See this special reportI wrote in Forbes on four distinctinnovation archetypes) Ascension recognized that itis inherently
decentralized, and that progress in hospitalsoften starts small,atthe grassroots. Its Innovations Accelerator fits thatarchetype; it
does not push out unwelcome models from the center to the rest of the organization,butrather itspots new ideas in hospitalsand
enables others to adoptthem quickly.
2. Set a clear mandate – A major causeof incubator failureis thelack of a well-defined strategic mandate. A mandate protects an
incubator againstan influx of pet projects,and it gives collectivecoherence to individual projects requiringflexibility. For Ascension,
the mandate is to reinforcethe organization’s position as a leader in “human-centered care” — not goingtoe-to-toe with
institutions such as Massachusetts General on hard-coremedical research,but rather being at the forefront of how to work
effectively with the softer, human sideof healthcare. The mandate has led the organization to cluster activities in areassuch as
mobileapps and useof social networks,not justbuildingneatapps but lookingdeeply at what makes use of these systems
sustainable.
3. Relationship to the core – Accordingto Scott Lambert, Ascension’s Senior Director of R&D, “It was a hard,expensive lesson to
learn that we should be a catalyst,nota developer.” The Innovations Accelerator engages with the broader organization,makingits
relevance clear to other stakeholders and aligningthem for its success. In other industries,such as softwareor consumer products,
it is perfectly possibleto sequester a half dozen people in a basement to churn out the next great invention. I know one consumer
products incubator housed in a former morgue. But in industries such as healthcareor financial services itcan be essential to
integrate closely with the rest of the company if ideas areto have a hope of being commercialized. Ascension’s Accelerator is also “a
nexus for external opportunities,” Lambert says. For instance,the group created AH Connect, an effort with Best Buy targeting
people with diabetes. Piloted atstores in Indianapolisand Detroit, the effort provided remote monitoring equipment and
professional medical counselingto patients in their own homes, so that they could better manage their diseaseand reach out to
their primary physiciansatthe righttimes.
4. Capabilities – Given the clarity around its mandateand rolein the organization,the Innovations Accelerator could concentrateon
buildingexcellencein a handful of key areas. The organization would help to test new ideas and advisehospitalson scalingthemup,
so it needed to be outstandingat designingpilots for maximumlearningand at extractinglessons in a methodical way. The
Accelerator works with a unitcalled the LivingLab that tests external ideas fastand determines which ones to adopt within the
hospital network.

8. 5. Processes – With the above buildingblocksin place,Ascension can be purposeful in where and how it embraces pr ocesses. The
front end of the funnel is flexible,butsubsequently the team looks ateach opportunity through set mechanisms. The idea is to
winnow ideas quickly so thatthe small unitdoes not “chasetoo many ideas,”accordingto Lambert. The unit has also learned to
adaptthe way in engages with external partners. Michael McGarry,head of the LivingLab, says that“larger partners are more
process-driven and consciousof PR. Small ones are resource-constrained. Wehave to be flexibleif we’re to work effectively with
both kinds.”
6. Metrics – Too many heads of innovation programs lack clear metrics for success. Accordingly,they grasp for projects that will
pleasestakeholders even if the resultingportfolio lackscohesion and spreadsenergies too thin. Ascension has determined a narrow
but diverseset of metrics around factors such as engagement of its associates,valuegeneration,and impact on the poor and
vulnerable.
7. Resourcing – Frequently, incubators startwith a notion of who will staff them, then they back into the other factors listed
above. Sometimes this is simplenecessity,but the process can be backward and lead to an incubator reflectingthe strengths of
predetermined individualsrather than the overarchingneeds of an organizati on. Likewise, the availability of staff can lead to
decisions around incubator size. At Ascension,the Accelerator is staffed by 5-6 people — not many for an organization with over
$15 billion in revenue. Yet, given the unit’s mandate of being a catalystand test bed, the numbers work.
Incubation is never easy. It creates ideas that internal stakeholders may resist,and it necessarily rocks theboat. But if an
organization can succeed atit whileoperating in a topsy-turvy healthcaresystem, across 80 locations,and through independent-
minded physicians,the promiseof incubation should betough to resist. The work is difficult,but the impacts can be huge.
HBR:
There is a very real knowledge gap in the early stage start-up game, on both sides of the table. First-timeentrepreneurs lack the
seasoningto captain a steady ship through turbulent waters. Inexperi enced friends and family (and,increasingly,crowdsourced
investors) lack the ability to gauge the viability of a business,or to mentor naïve entrepreneurs.
This knowledge gap, I have come to believe, is best filled by savvy incubators.However, there are over 7,500 business incubators
around the world. Most of them fail.
The firstbusiness incubator in the U.S. opened in 1959 and is still operating.In the lastcoupleof years,we have seen a r enaissance
in the incubator business.Pioneered by YCombinator, Silicon Valley’s flagship incubator led by Paul Graham,incubators havecome
back with a vengeance. YCombinator has seen some significantsuccesses,includingAirbnb,Dropbox,a nd Heroku. Ithas fueled a bit
of an incubator bubble,I must admit. Incubators arenow a global phenomenon, and there isn’ta major city in the world where an
incubator isn’tcroppingup.
For incubators to liveup to their full economic potential,they need to overcome two pitfalls:they need to providereal value,not
justofficespace, and they need to measure success in more than justoutsidefunding.
Adding Real Value
Duringthe dot-com era, every lawand accountingfirmdecided they were going to become incubators.Many of those efforts failed.
Charles D’Agostino, executive director of the Louisiana Business & Technology Center at Louisiana StateUniversity,offers some
analysis:“Incubators do work, but they must be more than a real estate entity offering executive suiteservices.Effective incubators
providebusiness counselingand management assistanceto their clientfirms.The value-added business services differentiatethem
from an officesuite.”
Indeed, as I investigated why incubators fail,I was astounded to find that many incubators assumethat cheap real estate, co-
working spaces,used furniture, plus a phone and Internet connection equate with business incubation.JimFlowers,president of the
Virginia BusinessIncubation Association,says,“They mistakecheap floor spacefor meaningful program content.”
Well,it isn’t.Neither are discounted legal services,accounting,or other kinds of commodity services.
Two things determine whether a business can get off the ground successfully and sustainably:a validated market opportunity with
customers willingto pay for a product or a service;and a product or servicethat addresses such an opportunity.The only in cubators
I consider “real” arethe ones that help entrepreneurs achievethese two goals.
Adds D’Agostino, “Incubators mustevaluate the management capability of the entrepreneurs and assistin findingmanagement fo r
these companies.Especially when the entrepreneur is a technologistlackingbusiness skills,itis critical thatthe incubator assists the
owner in findingmanagers that have the skillsnecessary to manage a successful entity and take it to the next level.”
My take is that technologists can,actually,betaught these skills.Hiringmanagers may often be expensive, but high IQ engi neers
have historically been very good at pickingup business skillswith the right mentoring. So getting to the next level is well within their
capacity,and the rolean incubator ought to play is to guide them in that process.
The only “next level” worth getting to for a start-up is a validated business idea thathas the endorsement of reference customers,
and a product that caters to their needs. The rest — an office, legal documents, QuickBook files — don’t build valuation or business
value. The benchmark incubators should bemeasuringthemselves againstis simply their successin helpingclients validate
businesses,gain reference customers, and complete at leasta minimum viableproduct.

9. Success is More Than Funding
Most incubators usefundingas a success metric,which is a somewhat flawed criterion.Over 99% of companies should operateas
organically grown,self-sustainingbusinesses — bootstrapped,without external financing.For them the goal is to achieve customer
validation,notfinancing.Yet if the incubator uses financingas its successmetric,itwill try to force inexperienced entrepreneurs into
an unnecessary financinground.And more often than not, they will fail.
YCombinator has mitigated this by partnering with venture capital firms likeSequoia,Andreessen Horowitz, and General Catalyst,
such that every singlecompany in their portfolio gets $80k in seed financingas they graduatefrom the incubation program.But
most incubators in the world do not have that luxury.Nor do they have the deal flow deservingof such guaranteed financing.
Of course,where fundingis appropriateand relevant, helpingentrepreneurs connect with angel investors and venture capitalists is
an important service.Equally importantis to provide education on what is and isn’tfundable.
Will this newgeneration of incubators perform better than the previous ones?
It remains to be seen.
My primary conclusion isthatincubators need to be decoupled from financing.Whilethey need to continue to actas a bridge to
capital,predicatingtheir success on getting businesses funded will keep them focused on tryingto find the less than 1% of star t-ups
that are fundable. In other words, comingto the rescue of victory!
The other 99%, then, continue to be ignored.
A scalableincubation model for the other 99% is a requirement for the next rev of capitalism.
Incubator Success:
When Joseph Mancuso subdivided and rented out spaces in a mammoth 850,000 squarefoot factory complex in 1956 and offered
business adviceto his tenants, he spawned a new way of learningand workingthat emphasized sharingand capitalizingon the
community’s pool of resources,knowledge, and network to help fledglingbusinesses growand succeed.
Today’s incubator programs followmuch the same formula and philosophy,offeringvaryingdegrees of spaces and services to
increasethe probability of businesses’success.With 1400 incubators in North America (or more, if one expands the definition),the
traditional incubator model has branched out into several different models. Some resemble traditional business incubatorsand
other less so,though all thriveto help new businesses.
Examples of incubator programs: Co-working spaces – General Assembly; Business / traditional –Innovation Depot; University –
Ryerson Digital Media Zone; Specialized – TechShop; Accelerator – Y Combinator; Virtual – Open Coffee Club
Though the incubator programlandscapeis growing,there has been relatively littleresearch on what contributes to “success”or
widespread consensus on what “success”should mean, be it the programs’or the businesses’.Beingable to measure and prove
“success”is important—for designingbetter programs and attractingusers and funding. At the same time, “success,”when

10. measured, is usually limited to economics,for example how many jobs an incubator has created or the monetary valueof an
incubator’s graduated businesses.
Measuringsuccess in economic terms makes sensefor many incubator programs—such as accelerators whereinvestors arelooking
for returns on their investments—but perhaps not for all.The diversity of incubator programs,such as co-workingspaces and virtual
incubators,suggests that ideas and business haveto be supported at all stages to be “successful”in the longrun. Before and beyond
the stages at which finances areof utmost concern, economic measures may not be the best measures of “success”.
If a business needs steppingstones and continued support, then defini ngand measuring“success”for all incubator programs must
also bea priority,so that they are designed better, attractusers and funding, and graduatepeople and businesses thatare ready for
the next step. For these programs,lookingbeyond economics can be key. Here are several additional ways to measure “success”:
 Strength of courses / instruction: Models such as university,specialized,and virtual incubatorsfocus as much on learning
the skillsand information to establish a business(beitwritingbusiness plans or thephysical tools to make a product) as
they do on forming the actual business.Thesemodels can evaluatethe effectiveness of their courses and instruction,much
likeeducation systems evaluateteaching methods and materials.Even if an individual’sbusiness fails,they can still usethe
knowledge they gained in other endeavors.
 Efficiency / Relevance: A major challengefor start-ups is findingthe rightpeople to join their team and the rightresources
to help them grow. Incubators and incubator-likeprograms aregenerally greatfor networking—through contacts,events,
mentors, etc.—but how relevant is the network to the business? As information providers,howrelevant is their
information? One measure of success could bethe efficiency / time ittakes for a program to connect business with whom
or what they need.
 Community engagement: As incubators striveto boost the local economy, one can also evaluatethe extent to which they
engage locals in their program. Research has shown that, in comparison to nationally-owned businesses,local,
independently-owned businesses keep more money in the local economy and are more likely to use local services,thus
further developingand strengthening the local economy in a positivefeedback cycle. Additionally,programs can be
evaluated on their engagement of community members through networking, events, mentorship, and pitching.
 Social impact: One of the key tenets of incubators is thatthey positively impactthe surroundingcommunity. Though
usually referringto positiveeconomic impact, “B corporations”and social impactincubatorsemphasizesocial and
environmental benefits and responsibility.Internally,this can mean transparency in decision-makingand standards;
externally,this can mean alleviatingpoverty and increasingaccessto basic needs.
In recognizingand legitimizingmultiple,diversemeasures of success,incubator programs can bebuiltto attractthe users they are
best suited to support, and users can find the programs that best support their specific needs. With more definitions of succ ess,
each serviceelement (such as network opportunities or shared resources) can also contributeto and be strengthened alonga
relevant measure, and give programs more depth and expertise.
In turn, incubator programs can incorporatemultiplemeasures of success into their program goals and philosophy,and exempli fy
these goals and philosophy through their workspace design, servicemodel, and program culture. For example, if an incubator
program values community engagement and closenetworks, itmay decide to partner with relevant local businesses to mentor and
give spaceto start-ups as compared to incubatingmultiple,disparatebusinesses in onespace.Changingwhat “success”means has
great potential to change what an “incubator”looks likeand how itoperates.
Diversity and specialization in incubator programs is already takingplace,as evidenced by the multitude of programs in the U.S. and
worldwide. The definition of “incubator”is also expanding,such thatvirtual incubatorscan betermed “incubators”even thou gh no
physical shared spaceexists.Planningan incubator programthen will not focus on moldingtradi tional models of space,service,and
organizations to a specific context, but on how new definitions and visions of successcan bestbe achieved through new space,
service,and organization models,and how these different models contribute to the process of buildingnewbusinesses.
Tips on shapingthe rightenvironment to encourage entrepreneurial skills and createlinks between universities and industry. Plus
the latesthigher education appointments

11. Source: Getty
Crank it up: but firstyou need to know where you would liketo go
“Start-up incubators can supportstudents in developing entrepreneurial skillsand providetailored supportfor early-stage, high-
growth businesses and ideas.They can also createa virtuous cycleof job creation,university-industry collaboration,and show
tangiblebenefits of academic ‘impact’.”
That is the assessmentof Britta Wyatt, a consultantfor global technology transfer and innovation management consultancy bus iness
Isis Enterprise,partof the University of Oxford’s technology transfer company, Isis Innovation.
A recent Isis Enterprisereviewof UK universities found thatstart-up incubators were becoming a necessity rather than simply “nice
to have”. Ms Wyatt subsequently devised a listof recommendations for creatinga successful start-up incubator,summarised below:
Think about your objectives
The incubator should reflectthe needs of the university and the student body, Ms Wyatt says.When consideringcreatingan
incubator,universities should ask themselves searchingquestions aboutits structureand aims.Among key questions are: is i t
designed to bolster the local businessecosystemand create links between the university and industry;will itbuild student
entrepreneurial skillsand new ventures independent from research; and can it foster an entrepreneurial ecosystem?
Understand your clients
There will be many groups interested in the incubator insideand outsidethe university.Oncethey have been identified,actively
seeking feedback from them helps a university to determine if its vision for the incubator servicefits with actual needs.
The ‘ideal’ incubator?
Ms Wyatt said the study indicated that there is no ideal model. However, the most successful structureis “tailored to the specific
needs” of the groups the incubator is tryingto help.
University start-up incubators supported an average of “30 ventures per year”, and “most had one/two core employees…[and]
programme managers had an entrepreneurial or business background”.
Be creative with your funding
Often university start-up incubators arefree to participants,unliketypical businesscentres.“[One] model for capturingreturns from
participantsis viaequity investment, royalty agreements or loans,”shesays.As such arrangements usually pay returns only in the
longterm, she warns that universities should expectto provide some degree of continuingsupportto the incubator.
Build your business case
A strongbusiness casefor internal approval and attractingpartners and funders is absolutely crucial,Ms Wyatt says.Although long-
term financial returns arepossible,itis useful to outline earlier impactand community benefits that can come from acceler ating
start-ups.
Geared for success
“A university will need to look closely atits intellectual property and benefits -sharingpolicies,[makingsurethat] these are both
attractivefor participantsand structured so investors will makegood returns,” shesays.Just as importantis cr eatingan awareness
across theuniversity that helps to attract participants.

12. Ms Wyatt said the tips were looseenough that they could apply to any university,and emphasised that they do not constitute a
“one-size-fits-all model”.
But she stressed that one of the most important things to consider was how to help secure investment for the businesses thatdo get
off the ground.
“Fortunately there is a lotof seed fundingavailablerightnow, but there is a bitof a cliff when itgets to the next stage of funding.
People seem to be awareof that as a challenge,and we’re waitingto see how that plays out,” she said.
What makes an incubator successful?
in Featured, How-To's written by Andra Zaharia July 5,2011
There is so much going on in the world that we sometimes wonder: is there a recipe for business success? Mostprobably not,but to
my mind when there is a will,there is a way. Young entrepreneurs often make the mistakes of placingtheir whole trust and fa ith
into one singleaction;and when the end resultis a failure,they loseall hope. This can also bethe caseof business incubators.Now,
what makes these activities a successand whatis the impacton the start-ups that are partof the process? To be or not to be in a
business incubator?
The USP of an incubator is simple:”programs designed to accelerate the successful development of entrepreneurial companies
through an array of business support resources and services.” And, justas graduatingfromuniversity,participatingin such an action
can have significantresults with long-timeeffects.
Why are start-ups lookingfor tech incubators?
 Cost savings
 Key advisers and insights on the market the start-up addresses
 Research material
 Seed investments
And does an incubator assuresuccess? No,it is justa manner in which start-ups can define their business perspectives better and
find the marketing and financial resources to gain access to a wider a.k.a international market.Therefore, if I were an entr epreneur,
I would firstask myself what is the best measuringnorm to rate an incubator a success or a failure? Let’s justtake a wild guess:
1. Quality of mentors
Have you been readingof the mentors which you will be having? Have you searched for real -liferesults other start-ups present in
the program improved their success rate? Are these mentors passionateabouttheir activities and do they seem committed to their
promise? There can be incubators thattrigger only a sliceof the entire pie; and depending on your end result, you can make the
wiser selection.Digg your way and understand how many companies got funded after the program, what types of investors have
been involved, what types of companies participated and how fastdid graduatingcompanies grow.
2. Participants
It is extremely importantto understand what type of “colleagues”you will be having.Judge their interest and expertise and to some
extent you will know justhow avid the competition is.Kidding,but itcan be a point worth lookinginto.
3. Methodology for picking mentors & participants

13. Havinga clear idea of which is the process behind the selection of participantsand mentors all together gives you a wider
understandingof the proposed mission and goalsof the incubator.Itshould be obvious that no business incubator can besucc essful
if every member of its governingboard, its management and the public think itshould be achievingdifferent goals.All supporters
should come together to gain consensus and aimto achievethe same desires.
4. The type of activities before, during, & follow-up program
It is more important to judge an incubator by the program it offers than by the media attention ithas received. More than on ce, an
incubator shows the actual quality and valueby the appreciation and consistency itdevelops. A one time thing is,basic ally,a onehit
wonder. Developing and communicatinga clear review policy can strengthen the services availablefor participants and help ensure
success of the incubator as a whole.
5. Funding & Additional assistance/support
What one expects from an incubator is developingpowerful partnerships and pursuinggrants and other funding opportunities.
Nevertheless, do not expect fundingto happen immediately — justlikeany good thing, ittakes time, patience, understandingand
constantgrowth. On a smaller scale,access to information,know-how and most importantly practices on accountingand
maintaininga sustainablecash flowwill beessential for participants.This can beone of the business services provided by a
successful incubator.
There are, of course, many, many do’s and don’ts of effective business incubation.No incubation program,though, can become an
effective engine of economic growth – fostering the creation of an environment that is friendly to entrepreneurs and that can
promote their success – without adherence to these basic,yet most of the times strugglingto achieveguidelines.In your opinion,
which are the most successful business incubators? We’ve started a listof start-up accelerators here. Let’s add some more by
leavinga comment to this post.Thank you!
Bio Ohio
http://www.bioohio.com/membership/
Edison became the owner of his Milan,Ohio,birthplacein 1906.On his lastvisit,in 1923,he was reportedly shocked to find his old
home still litby lamps and candles.
Duringrecent years, a new phenomenon in the world of startups has risen,the accelerator program.A new way of incubating
technology startups that has proven to be at leastvery popular among startup founders and investors.Typically characterized by
web/mobile technology, programme/class based,shorttime periods (3-12 months) and the use of agiledevelopment
methodologies.
If Y Combinator is regarded as one of the firstacceleratorsestablished in 2005,there are now over 200 accelerator programmes
world-wide, and new ones emerge each month.
We area group of students at Chalmers University of Technology who have conducted our bachelor thesis on this subject,where our
aimwas to find out what defines an accelerator.The thesis was done for Chalmers Innovation,a business incubator connected to

14. Chalmers,who is interested in further exploringthe accelerator concept to develop their ongoingand future activities related to
early-stagesoftware startups.This interest is whatprovided the motivation and focus of our thesis.