How Business Incubators Help Startups Succeed

The average business has a 44% chance of surviving the first five years, Forbes says after a conclusive study. But in an examination of business launched from incubators, Forbes found that those businesses had an 87% success rate after 5 years.

That’s essentially double the odds of success.

A lot of that comes from the built in support of coworking spaces. Your typical office building is just hallways and isolated offices. People may occasionally pass each other in the halls or run into each other in the kitchen, but there’s no real opportunity for interaction or collaboration.

Working in an open space removes those barriers, making it natural to get to know your neighbors, swap stories, and use your collective skills to benefit each other. When a CPA can chit chat with a social media manager, or any number of combinations like that, each person has skills the other can grow from.

The Four Types of Business Incubators

A start-up within an incubator is a new business under a sunlamp, attended by lab techs.  The growth and development are tracked, plodded, and guided.  At last! the shell cracks, the baby walks and talks, and the business is ready to become independent.  Many analogies can be used to symbolize the need for nurturing, guidance, and support that a new business benefits from, such as hatching eggs.  Only the steadfast and resilient survive, with a dose of luck.

1. The Local Economic Development/Public

This type is generalized.  It works to support many different kinds of businesses in their development.  There’s a feel-good to giving back to the local economy built into this type.  Cluster committees are often formed, with specific target groups.  The big focus is on jobs and revitalization.  The Nussbaum Center for Entrepreneurship is a local example.  Provided are:

  • Hosting in a work space
  • Shared services
  • Administrative services
  • Consulting
  • Coaching
  • Training
  • Networking

2. The Academic and Scientific/Medical

This version is more aggressive and fast-moving in its works.  A non-profit as well, this tech incubator encourages business identity and the entrepreneurial spirit within civic responsibility.  Think businesses created within and for institutions, like public programs and universities.  Its strength come from boards and financial backing.  Provided are:

  • Hosting in a work space
  • Concept testing
  • Coaching
  • Strategic advice
  • Technical advice
  • Intellectual property advice
  • Seed money
  • Access to Angel Funds, VC, and corporate investors
  • Networking within specific industries

3. The Corporate/Venture Builder

This for-profit behemoth operates within a corporation, to get stronger and continually compete for a high place on the food chain. Its prowess and agility come from the ability to build up, accelerate, and financially support from within.  Several corporations even have in-house entrepreneurs.  Provided are:

  • Access to new technologies
  • Access to business models
  • Access to commercial and new markets
  • Financial resources
  • Prototype and market testing
  • Long-term strategic partnership

4. Private Investors and Startup Studio

Tech and biotech incubators, when supported by private investors, make plenty of press.  The funding is spread by selling stock from portfolios, to spread the risk. IdeaLab is a hugely successful Startup Studio.  Provided are:

  • Hosting in a work space
  • Management advice
  • Strategy advice
  • Financial supply
  • Personal networks
  • Administrative services
  • Legal services
  • PR
  • Staffing and recruiting

Schedule A Tour

Comments are closed.