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This incubator has implemented a graduation
process based on established criteria that promote incubator
and graduate success. [View]
This incubator regularly monitors client progress
toward achieving graduation criteria. [View]
This incubator discusses graduation and exit
strategies at regular client meetings. [View]
Incubator management has straightforward discussions
about alternatives outside the incubator when clients do not
meet agreed-upon goals and/or do not use incubator resources.
[View]
This incubator consistently moves failing and
nonperforming companies out of the incubation program as non-graduates.
[View]
This incubator helps its graduates find suitable
space to relocate in the community, if possible. [View]
This incubator maintains regular contact with
its graduates. [View]
This incubator provides reasonable continuing
care, assisting graduates with issues that may arise after
graduation. [View]
When is a company ready to graduate? It’s a question
fundamental to business incubation, but unfortunately, one
with no definitive answer. In fact, many incubator managers
have found that no single graduation policy is right, even
for clients in the same incubator. Still, many programs set
arbitrary time frames for graduation, such as twenty-four
or thirty-six months after a company moves into the incubator.
This approach is strong in its simplicity, but it has some
drawbacks. First, it assumes that companies will mature at
the same rate, which is not necessarily the case. Second,
it can cause cash-flow problems for the incubation program
if several companies graduate at the same time. Another approach
is to develop a more complex set of exit criteria for clients,
based on milestones such as establishing a complete management
team, acquiring enough investments to accommodate the next
stage of business, or requiring space beyond the capacity
of the incubator. Exit criteria give companies concrete goals
and help ensure they’ll be ready for life outside the
incubator when it’s time to graduate. Exit criteria
also help an incubator determine whether it can continue to
provide value to a given company.
Whatever the approach, the key is to have a strong rationale
for deciding when a company should venture out on its own,
and that rationale should relate back to an incubator’s
mission and focus. For example, incubating a biotech company
might take up to seven years, while a software company might
need an accelerated timetable—eighteen months or less—to
ensure the technology can be brought to market in a timely
fashion. Additionally, an incubator’s graduation policy
should be flexible enough to allow the incubator to accelerate
or delay graduation on a case-by-case basis.
Who ultimately decides whether a company is ready to graduate?
It might be the same committee that decides which companies
to admit to the incubator or a separate committee that focuses
only on graduation. Some programs prefer to leave the decision
up to the incubator manager. While this simplifies the process,
using a committee allows members to share the heat if they
must ask a client to leave the incubator and reduces the likelihood
that a personality conflict will influence a decision. On
the other hand, the manager must “live” with this
client and is most familiar with the client’s progress
(or lack thereof).
Excerpted from Cammarata, Kathleen, Self-Evaluation
Workbook for Business Incubators, NBIA Publications, 2003,
p. 68.
It’s important to regularly remind clients that the
ultimate goal of the program is to graduate them out into
the community. Pointing the way to graduation, a sign in the
Center for Innovation in Grand Forks, North Dakota, provides
clients a constant reminder of the incubator’s graduation
policy.
A venture is ready to graduate once it achieves two of the
following:
- Reaches annual sales of $1 million
- Is acquired by a large company
- Makes a successful public or private stock offering of
more than $500,000
- Exceeds the capacity of the tech incubator
- Is a client for four years
- No longer has a university tie to be in a university tech
incubator
Excerpted from Gerl, Ellen, “Encouraging
Clients to Plan for Graduation,” A Comprehensive Guide
to Business Incubation, Completely Revised 2nd Edition,
NBIA Publications, 2004, pp. 317-320. This chapter is available
as a Quick Reference PDF document from the NBIA
Bookstore ($5/members; $10/nonmembers). For
further information on graduating clients, see:
- Cammarata, Kathleen, and Ellen Gerl,
“Exiting Client Firms,” A Comprehensive
Guide to Business Incubation, Completely Revised 2nd Edition,
NBIA Publications, 2004, pp. 188-192. This chapter also
is available as a Quick Reference PDF document from the
NBIA
Bookstore ($5/members; $10/nonmembers).
- Colbert, Corinne: “Graduation
Day: Making exiting clients feel special,” NBIA
Review, December 2006; and “Finding Space for
Biotech Graduates: How some incubator managers are helping
these special-needs clients land on their feet,” NBIA
Review, June 2005. Both articles are available free
to members in the NBIA Archives or as PDF Quick Reference documents
from the NBIA
Bookstore ($5/members; $10/nonmembers).
[Back to top]
At the Hamilton County Business Center, which has graduated
seventy-seven companies, Director Patrick Longo says he asks
applicants – from manufacturing to high technology firms
– where they want to be in three to five years. “Or
we might ask: ‘In your wildest dreams, how do you see
this company and your role?” We help them set up long-term
goals, and then what is to be done in the next six to twelve
months.”
Excerpted from Gerl, Ellen, “Encouraging
Clients to Plan for Graduation,” A Comprehensive
Guide to Business Incubation, Completely Revised 2nd Edition,
NBIA Publications, 2004, pp. 317-320. This chapter is available
as a Quick Reference PDF document from the NBIA
Bookstore ($5/members; $10/nonmembers).
Charles D’Agostino, executive director
of the Louisiana Business & Technology Center (LBTC) in
Baton Rouge, Louisiana, says the center’s exit policy
is “written but flexible,” because the incubator
is oriented to high technology start-ups that generally require
more time to get established and reach the level of safety
needed to exist the incubator. “A lot of our companies
come in during the concept-development and early-research
stage. It may be several years before they have a product
or services ready for the marketplace,” he says.
During the annual evaluation and review process, D’Agostino
and LBTC staff evaluate whether client firms will be able
to survive on their own. D’Agostino says they consider
a number of factors:
- Have they followed their business plan?
- Have they added the necessary employees to meet company
growth objectives?
- Have they developed a network of advisors and professionals
(e.g., attorneys and accountants)?
- Have they started generating sales revenue?
- Do they have sufficient capital to carry the company
for the next six months to a year?
- Is the management capable of running the company without
incubator guidance?
Often incubator managers use stage of growth as a chief indicator
of when a company should graduate. For instance, a program
might expect a company to be through the seed stage, where
it’s developing its idea or concept, as well as the
start-up stage, where a marketable product or service exists
but perhaps has not yet been sold.
The Long Island High Technology Incubator (LIHTI) in Stony
Brook, N.Y., allows clients to remain in the program for up
to four years. That’s usually enough time to go from
idea to proof of concept, says former LIHTI Manager and Director
Jim Finkle. As is the case with most successful incubation
programs, LIHTI monitors clients’ progress closely and
helps them establish short-term goals that will enable them
to advance through these early stages and eventually graduate.
Excerpted from Cammarata, Kathleen, and
Ellen Gerl, “Exiting Client Firms", A Comprehensive
Guide to Business Incubation, Completely Revised 2nd Edition,
NBIA Publications, 2004, pp. 188-192. This chapter is available
as a Quick Reference PDF document from the NBIA
Bookstore ($5/members; $10/nonmembers).
Monitoring client progress can easily be overlooked when
responding to the specific needs that arise on a daily, weekly
or monthly basis. Consequently, incubator staff must periodically
take a step back to objectively evaluate a client’s
progress through the incubation program and whether it is
likely to graduate from the incubator. Staff can measure progress
in terms of specific milestones that reflect the evolution
of a new venture as well as the mission of the incubator.
Specific accomplishments such as completing/refining the business
plan, solidifying the management team, completing the “proof
of concept,” securing capital, and establishing strategic
partnerships are examples of milestones by which staff can
track clients’ progress through the incubation program.
Excerpted from Wolfe, Chuck, Dinah Adkins,
and Hugh Sherman, Best Practices in Action – Guidelines
for Implementing First-Class Business Incubation Programs,
NBIA Publications, 2001, p. 8.
For further information
on monitoring client progress toward graduation, see:
-
Knopp, Linda, “Keeping Things in Check: Tracking Progress
Can Help Ensure Clients Become Graduates.” NBIA
Review, June 2006. This article is available free to
members in the NBIA Archives or as a PDF Quick Reference document
from the NBIA
Bookstore ($5/members; $10/nonmembers).
- Tuller, Lawrence W. The Small Business Valuation Book, Adams Media, 2008. Available
from the NBIA
Bookstore.
[Back to top]
Most managers say they don’t wait for specific events
to prompt a discussion of graduation. They broach the subject
at regular client meetings – whether during informal
monthly meetings, a quarterly review of financial statements,
or when the firm’s lease comes up. “We talk about
exit strategy when our firm’s twelve-month lease is
up,” says Patrick Longo, director of the Hamilton County
Business Center in Cincinnati, Ohio. “Something the
client may not recognize as an exit event, we might.”
This might include a strategic alliance, potential buyer,
or a technology taking off and ramping the company’s
staffing to twelve or fifteen people.
Excerpted from Gerl, Ellen, “Encouraging
Clients to Plan for Graduation,” A Comprehensive
Guide to Business Incubation, Completely Revised 2nd Edition,
NBIA Publications, 2004, pp. 317-320. This chapter is available
as a Quick Reference PDF document from the NBIA
Bookstore ($5/members; $10/nonmembers).
NBIA’s publication Put It in Writing notes
that “graduation is something incubator managers might
think they can discuss ‘later’ with their clients.
Getting them through the application and admissions process
requires enough formalities, right? Wrong. Clients need to
know up front that the incubator is not a lifetime home.”
The entire goal of an incubator should be to help clients
grow over time so that they can leave the program as self-sufficient
firms, creating community wealth. Moving companies through
a customized program that gives them the tools they need to
survive is what incubation is about. Successful incubators
can never be perceived as hospitals for “sick”
businesses. Thus an incubator’s graduation rate is an
important indicator of success. In best practices incubators,
companies move through the program expeditiously; incubator
management forces laggards out; and management requires successful
companies to graduate. Best practices incubator managers also
track graduate firms and their economic development impacts.
But why should companies leave the incubator “nest”?
Because achieving that milestone means they will have established
a company that’s successful enough to stand on its own
feet.
Truth be told, being in an incubator can be pretty cushy.
Graduates will have to order their own AV equipment and deal
with Internet service providers and other vendors. They’ll
miss the camaraderie of other entrepreneurs located just next
door. They’ll even be responsible for their own break
room. And most likely, they’ll pay higher rent. It can
be a cold world out there.
For these reasons, some incubator clients are reluctant to
graduate. This reluctance can only be countered by instilling
in them the notion that graduation is the goal that marks
their relative maturity as a company and a laudable achievement
– an accomplishment that all their fellow entrepreneurs
hope to attain.
Thus, graduation criteria and the goal of graduation should
be discussed at the earliest stages, beginning when clients
are admitted into the incubator program. Progress toward achieving
these criteria should be discussed at regular client meetings,
probably no less than quarterly. Additionally, incubator managers
should take care to ensure graduation ceremonies are important
events that attract community attention during which graduates
are duly recognized. Also, news releases regarding graduations
should be circulated to the media and a special wall of recognition
might be developed at the incubator to enshrine graduate firms.
Graduate entrepreneurs also could be invited to return to
the incubator for CEO forums or other counseling sessions,
and they should be given special recognition on these occasions.
Just as you wouldn’t first broach the idea of attending
college to a child as they’re graduating from high school,
you wouldn’t want to broach the idea of graduation at
the end of a client’s tenancy. Having graduation and
the criteria for graduation the subject of many conversations
will ensure that your client is pointed in the right direction.
Dinah Adkins
NBIA President & CEO
[Back to top]
What if a client doesn’t want to graduate? “Nudging
is part and parcel of this business,” says David McNamara,
vice president of incubation at InNOVAcorp Corporate in Halifax,
Nova Scotia, Canada.
And there may be instances when an incubator manager needs
to push hard. Perhaps it’s the entrepreneur whose business
is booming but who’s grown too comfortable with the
program’s support system. Or it may be a firm that’s
not meeting its benchmarks, and just as important, not making
use of incubator services. These are times that call for blunt
discussions about alternatives outside the incubator.
And incubator manager may have to “take them by the
hand and introduce them to commercial space,” McNamara
explains.
Susan Matlock, president and CEO of the Entrepreneurial Center
[now the Innovation Depot] in Birmingham, Alabama, says she
once had to tell a client: “You have taken advantage
of everything here and participated in the incubation process.
It’s time to make an alternative decision.” Despite
extensive coaching in areas of need, the company just didn’t
seem to learn or build from its experiences, Matlock says.
“If we had allowed it, they would still be here in ten
years.”
Excerpted from James, Carol, “Graduation
Policies Help Incubators and Clients,” Put It in
Writing: Crafting Policies, Agreements, and Contracts for
Your Incubator, NBIA Publications, 2002, p. 45.
Giving clients a time frame for the move lets them know you’re
serious. Patrick Longo, director of the Hamilton County Business
Center in Cincinnati, Ohio, says he might tell a client who
wasn’t using incubator resources or meeting agreed-upon
goals to plan an exit strategy for sometime in the next three
to six months. He’ll let the client out of its lease,
if necessary, he adds.
Laurie Katana, manager of the Bonner Business Center in Sandpoint,
Idaho, gave a client – the only one she’s had
to nudge out – a time frame and scheduled mandatory
meetings for the client to talk with lending institutions
“to plan cash flow to survive outside the incubator.”
Excerpted from Cammarata, Kathleen, and
Ellen Gerl, “Exiting Client Firms,” A Comprehensive
Guide to Business Incubation, Completely Revised 2nd Edition,
NBIA Publications, 2004, pp. 188-192. This chapter is available
as a Quick Reference PDF document from the NBIA
Bookstore ($5/members; $10/nonmembers).
For further information
on developing a service provider network, see:
- Gerl, Ellen, “Warning Signs of
Clients in Distress,” A Comprehensive Guide to
Business Incubation, Completely Revised 2nd Edition,
NBIA Publications, 2004, pp. 188-192. This chapter is available
as a Quick Reference PDF document from the NBIA
Bookstore ($5/members; $10/nonmembers).
- Erlewine, Meredith, et al., “Working
with Inexperienced Entrepreneurs,” A Comprehensive
Guide to Business Incubation, Completely Revised 2nd Edition,
NBIA Publications, 2004, pp. 307-312. This chapter is available
as a Quick Reference PDF document from the NBIA
Bookstore ($5/members; $10/nonmembers).
[Back to top]
What if a client doesn’t want to graduate? “Nudging
is part and parcel of this business,” says David McNamara,
vice president of incubation at InNOVAcorp Corporate in Halifax,
Nova Scotia, Canada.
And there may be instances when an incubator manager needs
to push hard. Perhaps it’s the entrepreneur whose business
is booming but who’s grown too comfortable with the
program’s support system. Or it may be a firm that’s
not meeting its benchmarks, and just as important, not making
use of incubator services. These are times that call for blunt
discussions about alternatives outside the incubator.
And incubator manager may have to “take them by the
hand and introduce them to commercial space,” McNamara
explains.
Susan Matlock, president and CEO of the Entrepreneurial Center
[now the Innovation Depot] in Birmingham, Alabama, says she
once had to tell a client: “You have taken advantage
of everything here and participated in the incubation process.
It’s time to make an alternative decision.” Despite
extensive coaching in areas of need, the company just didn’t
seem to learn or build from its experiences, Matlock says.
“If we had allowed it, they would still be here in ten
years.”
Excerpted from James, Carol, “Graduation
Policies Help Incubators and Clients,” Put It in
Writing: Crafting Policies, Agreements, and Contracts for
Your Incubator, NBIA Publications, 2002, p. 45.
Giving clients a time frame for the move lets them know you’re
serious. Patrick Longo, director of the Hamilton County Business
Center in Cincinnati, Ohio, says he might tell a client who
wasn’t using incubator resources or meeting agreed-upon
goals to plan an exit strategy for sometime in the next three
to six months. He’ll let the client out of its lease,
if necessary, he adds.
Laurie Katana, manager of the Bonner Business Center in Sandpoint,
Idaho, gave a client – the only one she’s had
to nudge out – a time frame and scheduled mandatory
meetings for the client to talk with lending institutions
“to plan cash flow to survive outside the incubator.”
For further information
on assisting faltering clients, see:
- Cammarata, Kathleen, and Ellen Gerl,
“Exiting Client Firms,” A Comprehensive
Guide to Business Incubation, Completely Revised 2nd Edition,
NBIA Publications, 2004, pp. 188-192. This chapter is available
as a Quick Reference PDF document from the NBIA
Bookstore ($5/members; $10/nonmembers).
- Gerl, Ellen, “Warning Signs of
Clients in Distress,” A Comprehensive Guide to
Business Incubation, Completely Revised 2nd Edition,
NBIA Publications, 2004, pp. 188-192. This chapter is available
as a Quick Reference PDF document from the NBIA
Bookstore ($5/members; $10/nonmembers).
[Back to top]
Many incubator managers begin with introducing clients to
different commercial real estate options from renting or purchasing
an existing building to building a new facility. Bruce Gjovig,
director of the University of North Dakota’s Center
for Innovation in Grand Forks, encourages clients to think
strategically when they consider a new location. “Does
this location make sense based on employee talent, resources,
customers, vendors, and transportation?” he asks.
David McNamara, vice president of incubation at InNOVAcorp
Corporate in Halifax, Nova Scotia, Canada, agrees. Paying
$110 per month to park at a downtown location would be a hardship
for entry-level staff in companies where they are not highly
paid. Other considerations, he says, are expandability and
portability within the leasehold. And they’ll find “it’s
not nearly as easy to expand as it is in the incubator.”
It’s important to help clients plan how much space
they will need to economize. “We tell them, ‘You
don’t need a grandiose reception area. You are paying
by yourself for spaces that you shared in the incubator,’”
McNamara says. He shares tips such as to store computer boxes
in rental lockers that cost $1 per square foot – not
in space that costs $20 per square foot. The program’s
leasing manager helps clients through their first lease, “like
kids that graduate university and buy their first home. We
try not to get clients boxed in for too many years.”
Indeed, real estate lingo can befuddle clients, according
to Kathy Osborne, chief operating officer of Meridian Environmental
Technology, a client company that is planning to graduate
from the Rural Technology Incubator in Grand Forks, North
Dakota, and is currently searching for the right space. Besides
needing more space with highly technical capabilities, the
firm is ready for its own corporate identify, Osborne explains.
She suggests managers educate clients about commercial real
estate terminology such as triple- and single-net leases and
other building terms.
Managers take two tacks when helping clients relocate: sharing
their own knowledge of the commercial real estate scene, and
introducing clients to economic development officials and
real estate professionals well versed in the issue.
For instance, [Susan Matlock, president of the Innovation
Depot in Birmingham, Alabama, says she talked with a client
who was about nine months out from graduation about current
commercial market rates, and she identified three buildings
the entrepreneur might consider. “I also have some IT
companies that would like to be in the downtown area and would
like to buy their own buildings. I’m watching for [building
prospects for] them,” she adds.
Once a year McNamara brings into the incubator commercial
realtors as a group. “They can go in and recruit companies
all they want,” he says. McNamara also lets clients
know that industrial properties owned by the province or municipalities
offer many advantages. ”They’re extremely rural,
but that’s not bad. There’s free parking, a smaller
tax structure and, in rural Nova Scotia, your neighbor will
help you.”
Pointing clients to funders is a big part of preparing clients
to move. McNamara went with a group of three clients to the
bank to seek a building loan. “I told the bank that
they’d never missed a rent payment and that they showed
expansion capabilities,” he says. The clients got their
money.
Excerpted from Gerl, Ellen, “Encouraging
Clients to Plan for Graduation,” A Comprehensive
Guide to Business Incubation, Completely Revised 2nd Edition,
NBIA Publications, 2004, pp. 317-320. This chapter is available
as a Quick Reference PDF document from the NBIA
Bookstore ($5/members; $10/nonmembers).
For further information
on helping graduates find suitable space, see:
[Back to top]
Clients may move out, but they’re still family. Patrick
Longo, director of the Hamilton County Business Center in
Cincinnati, Ohio proactively calls on new graduates during
their first month out, and less-recent grads “get mad
at me when I don’t visit often enough.” Laurie
Katana, manager of the Bonner Business Center in Sandpoint,
Idaho, puts new graduates in touch with previous graduates
to give them an additional support network. And at many incubators,
affiliate programs ease the transition by letting graduates
access business support services at the incubator.
David McNamara, vice president of incubation at InNOVAcorp
Corporate in Halifax, Nova Scotia, Canada, says some clients
“do cut the cord on their own” but other graduates
pay premium rates for continued use of incubator services
as affiliates.
Excerpted from Gerl, Ellen, “Encouraging
Clients to Plan for Graduation,” A Comprehensive
Guide to Business Incubation, Completely Revised 2nd Edition,
NBIA Publications, 2004, pp. 317-320. This chapter is available
as a Quick Reference PDF document from the NBIA
Bookstore ($5/members; $10/nonmembers).
Too many incubation programs lose contact with their graduates
after the companies become successful and leave the nest.
That’s too bad, many incubator managers say, because
these experienced entrepreneurs can be strong program assets.
They can serve as mentors to new start-up clients, provide
monetary contributions to the incubator, or serve on the boards
of client companies or the incubator itself. And it’s
not just the incubator and its new clients that stand to benefit
from these ongoing relationships. Many incubator graduates
gain useful advice and experience by mentoring nascent firms.
Developing relationships that will endure once the graduation
ceremonies are over doesn’t happen overnight though.
“That’s why it’s so important to take good
care of these companies while they’re clients,”
says Lee Huang, former executive vice president of The Enterprise
Center in Philadelphia. “That way, these companies …
grow up thankful and continue to come back and give back.”
That giving can take several forms. Some graduates donate
their time to trade entrepreneurial war stories with new business
owners at incubator seminars; others contribute financially
by writing checks or donating services to help incubators
assist other new businesses. Whatever form the assistance
takes, graduate involvement is an asset every incubation program
should develop fully, many incubator managers say.
Start-up businesses learn important lessons by interacting
with experienced entrepreneurs who are just ahead of them
in the business development process. “Incubator clients
like to hear from other businesses that are just past the
stage they are [in],” Huang says. “They want to
hear specific steps about what it took to go from a $1 million
company to a $5 million company or a half-million-dollar company
to a million-dollar company, because that’s where they
want to be in two or three years.”
When an incubator graduate’s experience and background
match those of a current incubator client, the incubator manager
might be able to broker a more structured mentoring relationship.
Keelin O’Leary, manager of the Genesis Centre in St.
John’s, Newfoundland, Canada, says she’s been
able to recruit two Genesis Centre graduates to serve on the
advisory boards of incubator clients. “They [graduates]
are flattered to be asked to serve as a mentor,” she
says. “It boosts their image and credibility in the
business world.”
Genesis Centre graduate Chris Griffiths, president of 2002
NBIA Outstanding Incubator Graduate award winner Garrison
Guitars, now serves on the board of Aurum Acoustics, a high-end
loudspeaker company. The advisory board meets quarterly to
discuss the challenges and opportunities the business is experiencing
and to provide strategic planning, financing, operations and
distribution advice to the start-up firm.
This entrepreneurial approach to solving business problems,
in which each member of the advisory board brings unique personal
experiences to the table, benefits both incubator clients
and their advisors, Griffiths says. “Just because a
business is at an earlier stage than I am doesn’t mean
I can’t learn from it,” he says. “By talking
about the problems it is facing and possible solutions to
those problems, I often see new ways to look at things. It’s
always great to listen to others.”
So, how do you get incubator graduates to share experiences
with less-seasoned entrepreneurs? Often, all you have to do
is ask. That method works for Heidi Brandow, incubator network
director for Florida’s Technological Research and Development
Authority. She frequently refers clients with questions about
government contracting to Moses Harvin, a graduate of the
Florida/NASA Business Incubation Center in Titusville, Fla.
Harvin is president and CEO of American Services Technology,
a Cocoa, Fla., firm that provides logistic and facilities
support services to businesses and government agencies. “He
has experienced the trials and tribulations of dealing with
government contracts, so he knows firsthand what works and
what not to do,” Brandow says. “Every time I talk
to Moses, he says, ‘Let me know what I can do to help.’”
Excerpted from Knopp, Linda, “Coming
Back to Give Back: Incubator Graduates Are Resources for Incubators
and Clients,” NBIA Review, June 2005. This
article provides detailed advice on how incubator managers
can get help from program graduates in assisting new entrepreneurs,
supporting the incubator financially, serving as incubator
advocates and bringing other resources to the incubation program.
This article is available free to members in the NBIA Archives or as a PDF Quick Reference document from
the NBIA
Bookstore ($5/members; $10/nonmembers).
[Back to top]
The incubator-graduate relationship doesn’t have to
be one-sided. Sometimes, incubators continue to serve as a
resource for graduates who need additional guidance in growing
their businesses. “Once you become a valued resource
for incubator clients, they’ll often continue to come
back when they have questions or need introductions,”
says Rich Ritter, former manager of the Idaho Innovation Center
in Idaho Falls. More than four years after he left the center,
he still gets calls from former clients.
Many times, incubator clients aren’t yet ready to avail
themselves of all the resources the incubator can offer, but
incubator graduates can benefit from more advanced assistance,
Charles D’Agostino, executive director of the Louisiana
Business & Technology Center in Baton Rouge, says. For
example, a start-up business with one or two employees might
not need formal human resources policies, and a company with
a small office in an incubator probably isn’t ready
to apply for bank loans to fund a new facility. LBTC has helped
graduates apply for SBIR grants, tap into Louisiana State
University internship and student employment programs, and
upgrade their marketing plans.
The BioAccelerator, a biotech incubator operated by the Fairfax
County (Va.) Economic Development Authority, has formalized
its support of incubator graduates that remain in the county.
Through its after-care service program, the incubator passes
along information to graduates about funding and business
opportunities, facilitates partnerships between incubator
graduates and other companies, and assists graduates with
their marketing and public relations efforts.
BioAccelerator Manager Brian Smith meets at least monthly
with incubator graduates to monitor the companies’ progress
and to see how the incubator’s economic development
agency sponsor might be able to assist the firms’ continued
growth. This continuing relationship makes it easier to call
on graduates when the incubator or its current clients need
assistance from graduate firms. “Then, it’s a
much easier call to make,” Smith says. “By maintaining
communication, the feeling of community is reinforced. They
know our door is always open if they need help, so it’s
easy to get them to come back to help us, too.”
Developing ongoing relationships that will continue once a
company graduates from the incubator isn’t really difficult,
incubator managers say. Just do your job and do it well. “It
all goes back to the experience they’ve had with your
incubator, whether they see you as a valued resource,”
Ritter says. “If you’ve done the things you should
have done while the companies were in the incubator, it really
shouldn’t be a sell to keep them involved after graduation.”
Of course, you can’t just pick up the phone and ask
graduates for support if you haven’t kept in touch with
them periodically since they left the incubator. At LBTC,
staff contact incubator graduates at least quarterly, both
to gather key statistics about the firms’ growth and
to see how the incubator might be able to offer additional
assistance to the companies. “Business incubation isn’t
a one-time act,” D’Agostino says.
By engaging graduates in ongoing conversations about their
businesses and continuing to provide assistance as needed,
incubator managers can keep graduates active in their programs.
Adapted from Knopp, Linda, “Coming
Back to Give Back: Incubator Graduates Are Resources for Incubators
and Clients,” NBIA Review, June 2005. This
article provides detailed advice on how incubator managers
can get help from program graduates in assisting new entrepreneurs,
supporting the incubator financially, serving as incubator
advocates and bringing other resources to the incubation program.
It also explains how graduates can gain from these and other
activities. This article is available free to members in the
NBIA Archives or as a PDF Quick Reference document
from the NBIA
Bookstore ($5/members; $10/nonmembers).
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