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




For profit

For profit

Main Activity






  • 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


  • 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



  • hosting and shared services

  • administrative assistance

  • consulting


  • coaching – training – networking

  • access to financing

  • concept testing

  • technical advice and support

  • intellectual property advice

  • seed capital

  • basic management advice



  • management and strategy advice

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

  • personal networks


  • 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



  • 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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