National Business Incubation Association; Your source for knowledge and networks in business incubation

A portrait of for-profit incubation

April 2001

Last November, NBIA e-mailed a short survey to all of the for-profit incubator programs in our database – both members and nonmembers – to find out how these programs operate and to gain a better understanding of the for-profit sector. We asked about their needs, challenges and goals, and how they feel about their businesses and the state of for-profit incubation.

Many were happy to tell us about themselves. We heard from 67 incubators representing 50 cities and 10 countries – a 24 percent response rate – and they had some interesting things to say. For instance, although 74 percent of respondents said they were either neutral or negative about the health of the business incubation industry, 60 percent said they felt their own incubators were healthy. And nearly a quarter of respondents said their programs have multiple locations. We think this may be a marked difference between for-profit incubators and their nonprofit counterparts, and we're interested to find out more when the results of our State of the Industry survey come back later this year.

"The for-profit survey is part of our continuing effort to keep tabs on all segments of the business incubation industry," says JoAnn Rollins, NBIA director of membership. "We're always on the lookout for trends, and surveying individual sectors can elucidate that analysis."—Kathy Cammarata

For-profit survey results

NBIA's survey of for-profit incubation programs helped the Association gain some interesting insights into the for-profit sector. Following are the complete survey results.

Note: Due to multiple optional answers, percentages may not equal 100%

1) What is your client focus? Please check all that apply.

  • Technology: 85%
  • Internet: 82%
  • Information Technology: 65%
  • Telecommunications: 43%
  • Financial Services: 29%
  • Multimedia: 26%
  • Health/Medical: 25%
  • Entertainment: 24%
  • Other: 12%

2) How would you categorize your business?

  • Incubator: 44%
  • Accelerator: 35%
  • Other: 10%
  • VC/Angel Mentor: 7%
  • Zaibatsu: 1%
  • N/A: 3%

3) How many locations does your business accelerator/incubator currently have?

  • 1: 68%
  • 2: 18%
  • 3: 3%
  • 4+: 3%
  • N/A: 8%

4) How long has your business had a focus on business acceleration/incubation?

  • 13-24 months: 35%
  • 7-12 months: 31%
  • 36+ months: 16%
  • 1-6 months: 12%
  • 25-36 months: 4%
  • N/A: 2%

5) As an accelerator/incubator, what are your goals relative to serving your client? Please check all that apply.

  • To be able to provide strategic alliances: 78%
  • To be able to offer proactive on-site or external service providers: 78%
  • To be able to offer networking to funders: 72%
  • To be able to offer a well-developed array of management and technical expertise: 72%
  • To be able to identify and take high impact companies to market: 60%
  • To be able to offer some form of business infrastructure: 57%
  • To be able to graduate the new business: 57%
  • To be able to act from a VC perspective and identify business opportunities and provide monetary support: 54%
  • To have the opportunity to be a long time shareholder: 49%
  • To be able to offer below market rent: 25%
  • To be able to offer full service Series A investment: 21%
  • To be able to offer real estate: 7%
  • Other: 18%

6) Do you have a graduation policy for your client companies?

  • Yes: 50%
  • No: 49%
  • N/A: 1%

7) If yes to the question above, what are your graduation requirements? Please check all that apply.

  • That the client company completes requirements in allotted time: 76%
  • That the client company achieves mutually agreed upon benchmarks: 62%
  • That the client company has another round of funding: 47%
  • That the client company has an experienced, independent management team: 41%
  • That the growth rate of the client company exceeds the talents/abilities of business accelerators/incubators: 38%
  • That the client company recruits additional full time employees: 15%
  • That the client company has a paying customer: 15%
  • That there is a liquidity event: 0%
  • Other: 9%

8) Do you provide the following services: (These services can be offered either in-house or externally.) Please check all that apply.

  • Sales/marketing/PR advice: 87%
  • Management coaching: 84%
  • Business/corporate development: 84%
  • Strategic alliances: 84%
  • Technology support: 84%
  • Access to VC's: 81%
  • Financial analysis: 78%
  • Competitive analysis: 76%
  • Physical space: 72%
  • HR/management recruiting: 71%
  • Members to serve on Board: 71%
  • Internet product development: 66%
  • Accounting services: 65%
  • Investor analysis: 62%
  • Equity investment or debt financing: 60%
  • General legal services: 60%
  • Shadow board/mentors: 50%
  • Intellectual property management: 46%
  • Linkages to higher education resources: 44%
  • Access to training: 38%
  • Portfolio management: 29%
  • Specialized equipment: 26%
  • International trade assistance: 25%

9) How did you capitalize your accelerator/incubator start-up? Please check all that apply.

  • Self-funding from founder(s): 66%
  • Private investors: 49%
  • Angel investment: 31%
  • Corporate investment/partnership: 31%
  • VC investment: 16%
  • Friends and family: 16%
  • Other: 6%
  • N/A: 1%

10) Does your business accelerator/incubator have plans to go public?

  • No: 63%
  • It is an attractive option: 24%
  • Yes: 9%
  • N/A: 4%

11) From where do you expect to receive your primary source of return?

  • Returns on equity investments: 62%
  • Products & services complementary to corporate goals: 16%
  • Rents and other service fees: 13%
  • Returns on royalties payments: 0%
  • Other: 9%

12) I feel that the business acceleration/incubation industry is healthy. (Answers weighted on a scale where 1= strongly agree and 5 = strongly disagree)

  • 3: 43%
  • 4: 25%
  • 2: 16%
  • 1: 7%
  • 5: 6%
  • N/A: 3%

13) I feel that my acceleration/incubation business is healthy. (Answers weighted on a scale where 1= strongly agree and 5 = strongly disagree)

  • 1: 31%
  • 2: 29%
  • 3: 18%
  • 4: 15%
  • 5: 6%
  • N/A: 1%

14) What is the primary issue that is most challenging your business accelerator/incubator today?

  • Difficulty finding capital for accelerator/incubator: 21%
  • Difficulty identifying high-quality clients; inadequate deal flow: 18%
  • Difficulty dealing with public perception of for-profit accelerators/incubators: 13%
  • Difficulty executing deals: 9%
  • Difficulty validating accelerator/incubator business model: 7%
  • Difficulty executing exit strategy: 7%
  • Difficulty managing cash flow: 6%
  • Other: 6%
  • ROI: 4%
  • Difficulty recruiting, retaining and motivating own staff: 1%
  • N/A: 8%

Keywords: for-profit incubators, research -- incubation

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Fax: (740) 593-1996
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Athens, OH 45701-1565
info@nbia.org