Venturepreneur:
Business Incubators

Business Incubators: Comparison of Four Different Models

Adapted from "Best Practices for Managing Incubators", Rahul Patwardan, IndiaCo

 

 

Local Economic Development Incubators

Academic and Scientific Incubators

Corporate Incubators

Private Investors’ Incubators

Goal

Non-profit

Non-profit

For profit

For profit

Main Activity

Generalists

High-tech

High-tech

High-tech

Objectives

  • job creation

  • re-industrialisation / revitalisation

  • economic development

  • support to particular target groups or industries

  • development of SMEs and clusters

  • commercialisation of technologies

  • development of entrepreneurial spirit

  • civic responsibility

  • image

  • new sources of finance

  • profits by selling stock from a portfolio of companies allowing to risks to be spread

Targets

  • small commercial craft or service companies

  • in some cases, high-tech companies

  • projects internal to institution prior to company creation

  • external projects

  • internal and external projects, generally related to the activity of the company

  • technological start-ups, generally ICT and/or biotechnology related

 

Offering

  • hosting and shared services

  • administrative assistance

  • consulting

Eventually:

  • coaching – training – networking

  • access to financing

  • concept testing

  • technical advice and support

  • intellectual property advice

  • seed capital

  • basic management advice

Eventually:

Eventually:

  • management and strategy advice

  • supply of one or several types of financing and search of complementary financing

  • personal networks

Eventually:

  • hosting and administrative assistance

  • legal services, public relations, recruiting, etc...

Key Problems

  • durability – lack of stability of resources

  • quality of management and services provided – highly dependent on the quality of the manager

  • governance, risk of conflicts about the objectives, bureaucratic red-tape, time spent in negotiating with different partners

  • legitimate inside the institution

  • legal status, governance, independence, and operational flexibility

  • income sources

  • management quality; lack of business coaching expertise

  • access to external resources and network

  • strategic position of the incubator for the corporate structure

  • management independence and ability to mobilize internal resources

  • durability of the mission of the incubator

  • conflicts about the objectives between the owners / the managers of start-ups and the corporation

  • sourcing of quality projects

  • level and conditions of the incubator payment in comparison with provided services

  • valorisation of the incubator's participation at the entry and the liquidation

  • durability of the incubator

 

Trends

  • regular development

  • increasing territorial coverage

  • rapid development under the aegis of public programs

  • testing of the concept in numerous companies

  • likely to develop

  • high levels of consolidation and restructuring of the sector

  • still looking for a successful model

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