Business Incubators 

Business incubators differ from research and technology parks in their dedication to startup and early-stage companies. Research and technology parks, on the other hand, tend to be large-scale projects that house everything from corporate, government or university labs to very small companies. Most research and technology parks do not offer business assistance services, which are the hallmark of a business incubation program. However, many research and technology parks house incubation programs.

Incubators also differ from the U.S. Small Business Administration's Small Business Development Centers (and similar business support programs) in that they serve only selected clients. SBDCs are required by law to offer general business assistance to any company that contacts them for help. In addition, SBDCs work with any small business at any stage of development, not only startup companies. Many business incubation programs partner with their local SBDC to create a "one-stop shop" for entrepreneurial support.

In 2005 alone, North American incubation programs assisted more than 27,000 companies that provided employment for more than 100,000 workers and generated annual revenues of $17 billion.[1]

  

The incubation processMost common incubator services:

Help with business basics Networking activities Marketing assistance High-speed Internet access Help with accounting/financial management Access to bank loans, loan funds and guarantee programs Help with presentation skills Links to higher education resources Links to strategic partners

Access to angel investors or venture capital Comprehensive business training programs Advisory boards and mentors Management team identification Help with business etiquette Technology commercialization assistance Help with regulatory compliance Intellectual property management

Unlike many business assistance programs, business incubators do not serve any and all companies. Entrepreneurs who wish to enter a business incubation program must apply for admission. Acceptance criteria vary from program to program, but in general only those with feasible business ideas and a workable business plan are admitted. It is this factor that makes it difficult to compare the success rates of incubated companies against general business survival statistics.

Although most incubators offer their clients office space and shared administrative services, the heart of a true business incubation program is the services it provides to startup companies.

More than half of incubation programs surveyed by the National Business Incubation Association in 2006 reported that they also served affiliate or virtual clients. These companies do not reside in the incubator facility. Affiliate clients may be home-based businesses or early-stage companies that have their own premises but can benefit from incubator services. Virtual clients may be too remote from an incubation facility to participate on site, and so receive counseling and other assistance electronically.

The amount of time a company spends in an incubation program can vary widely depending on a number of factors, including the type of business and the entrepreneur's level of business expertise. Life science and other firms with long research and development cycles require more time in an incubation program than manufacturing or service companies that can immediately produce and bring a product or service to market. On average, incubator clients spend 33 months in a program. Many incubation programs set graduation requirements by development benchmarks, such as company revenues or staffing levels, rather than time.

Types

Industry sectors intentionally supported by incubation programs[4]

Technology Creative industries Construction

Computer softwareeBusiness and eCommerce

Arts

Services/professional Wireless technology Aerospace

Manufacturing Healthcare technology Kitchen/food

Internet Advanced materials Retail

Biosciences/life sciencesDefense/homeland security

Fashion

Electronics/microelectronics

EnergyWood/forestry

TelecommunicationsEnvironment/clean technologies

Tourism

Computer hardware Media Manpower

Medical devices Nanotechnology

More than half of all business incubation programs are "mixed-use" projects; that is, they work with clients from a variety of industries. Technology incubators account for 39% of incubation programs.

One example of a specialized type of incubator is a bio incubator. Bio incubators specialize in supporting life science-based startup companies. Entrepreneurs with feasible projects in life sciences are selected and admitted for these programs.

Goals and Sponsors

Business incubation has been identified as a means of meeting a variety of economic and socioeconomic policy needs, which may include job creation, fostering a community's entrepreneurial climate, technology commercialization, diversifying local economies, building or accelerating growth of local industry clusters, business creation and retention, encouraging women or minority entrepreneurship, identifying potential spin-in or spin-out business opportunities, or community revitalization.

About one-third of business incubation programs are sponsored by economic development organizations. Government entities (such as cities or counties) account for 21% of program sponsors. Another 20% are sponsored by academic institutions, including two- and four-year colleges, universities, and technical colleges.

In many countries, incubation programs are funded by regional or national governments as part of an overall economic development strategy. In the United States, however, most incubation programs are independent, community-based and resourced projects. The U.S. Economic Development Administration is a frequent source of funds for developing incubation programs, but once a program is open and operational it typically receives no federal funding; few states offer centralized incubator funding. Rents and/or client fees account for 59% of incubator revenues, followed by service contracts or grants (18%) and cash operating subsidies (15%).

As part of a major effort to address the ongoing economic crisis of the US, legislation was introduced to "reconstitute Project Socrates". The updated version of Socrates supports incubators by enabling users with technology-based facts about the marketplace, competitor maneuvers, potential partners, and technology paths to achieve competitive advantage. Michael Sekora, the original creator and director of Socrates says that a key purpose of

Socrates is to assist government economic planners in addressing the economic and socioeconomic issues (see above) with unprecedented speed, efficiency and agility.

Many for-profit or "private" incubation programs were launched in the late 1990s by investors and other for-profit seeking to hatch businesses quickly and bring in big payoffs. At the time, NBIA estimated that nearly 30% of all incubation programs were for-profit ventures. In the wake of the dot-com bust, however, many of those programs closed. In NBIA's 2002 State of the Business Incubation survey, only 16% of responding incubators were for-profit programs. By the 2006 SOI, just 6% of respondents were for-profit.

Although some incubation programs (regardless of nonprofit or for-profit status) take equity in client companies, most do not. Only 25% of incubation programs report that they take equity in some or all of their clients.

History

The formal concept of business incubation began in the USA in 1959 when Joseph Mancuso opened the Batavia Industrial Center in a Batavia, New York, warehouse.[7]Incubation expanded in the U.S. in the 1980s and spread to the UK and Europe through various related forms (e.g. innovation centres, technopoles/science parks).

The U.S.-based National Business Incubation Association estimates that there are about 7,000 incubators worldwide. As of October 2006, there were more than 1,400 incubators in North America, up from only 12 in 1980. Her Majesty's Treasury identified around 25 incubation environments in the UK in 1997; by 2005, UKBI identified around 270 incubation environments across the country. A study funded by the European Commission in 2002 identified around 900 incubation environments in Western Europe.

Incubation activity has not been limited to developed countries; incubation environments are now being implemented in developing countries and raising interest for financial support from organizations such as UNIDO and the World Bank.

On November 3, 2010, New York City broke ground on its sixth business incubator and the first in the Bronx called the Sunshine Bronx Business Incubator[9] which is a joint venture between the New York City Economic Development Corporation and Sunshine Suites. Manufacture New York is a Manhattan-based fashion incubator and small-run production facility.

Incubators are going through a renaissance as of 2011. New experiments like Virtual Business Incubators are bringing the resources of entrepreneurship hubs like Silicon Valley to remote locations all over the world. The Emerging Enterprise Center run by the New Castle County Chamber of Commerce incubator is a bit different than most in the country since the chamber embeds its own home-grown program inside the existing chamber of commerce. 

Incubator networks

Incubators often aggregate themselves into networks which are used to share good practices and new methodologies. Europe's European Business Centre (EBN) association federates more than 250 European Business Innovation Centres (eBICs) throughout Europe. France has its own national network of technopoles, pre-incubators, and eBICs, called RETIS Innovation. This network focuses on internationalizing startups.

The Startup Federation is an international incubator network that includes incubators such as Washington, D.C.'s 1776, New York City's General Assembly, Boston'sCambridge Innovation Center, London's Warner Yard, Berlin's Betahaus, Chicago's 1871, and others. The network allows collaboration between members of each incubator.

Of 1000 incubators across Europe, 500 are situated in Germany.

In India the incubators and accelerators performance has picked up over the years. Details of Indian incubator and accelerators is as follows:

50 Amazing Startup Incubators And Accelerators In India

Sometime back we were discussing options to find business incubation for our idea. We researched fairly and part of this article was the result of that research. We thought why not complete the research and publish it out for everyone’s use.

Startup incubators are a growing trend and a great thrust to support first time entrepreneurs across India. There are all kinds of efforts in this direction – Govt supported Institute based technology incubators, Private business incubators started by industry veterans and startup accelerators supported by companies and VC funds. Individually there are differences between how they incubate, structure the program, operate, support/fund and accelerate the ventures. We have tried to cover the fundamentals of each of them succinctly, but readers will do good to dive in each entity to understand more.

Difference between Incubators and Accelerators:

We would like to talk about one major difference though. We generally hear two terms more often than others – Incubators and Accelerators – and people use them interchangeably. So what is the difference between the two ? Are they same ? The definitions of the terms is the answer.

Accelerators accelerate the speed of your business. In most cases an existing business or an idea. The programs are short and intense. They help you hone your idea and build it out. Whereas incubators incubate your early pre-product idea, help you make a prototype, and further make a product out of it. The engagement is longer than an accelerator.

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BUSINESS INCUBATORS AND ACCELERATORS IN DELHI NCR

1. Indian Angel Network Incubator: 

Established from the support of National Science and Technology Entrepreneurship Development Board(NSTEDB), Department of Science & Technology(DST), Govt. of India. The ventures are incubated for 18-24 months. IAN is reputed for its huge network of successful entrepreneurs, domain experts, academicians and experienced professionals.

2. The Hatch: 

The Hatch has both physical and virtual incubators and accelerator programs. The incubator program is 52 week long and included 13 weeks of accelerator program. Startups can operate out of 25,000 square feet facility in Gurgaon and in Chandigarh.  Possibility of funding of up to Rs.10 lacs + Access to investors for funding up to Rs.1 cr.

3. Technology Business Incubator, IIT Delhi: Proposals are accepted from ventures that should be initiated by one

or more members of academic staff, students or alumni of the Institute or a faculty-student led company for this technology incubator. They are strict on venture selection and interested companies should exploring tying up with college professors. DST and MSME grants are available for venture’s fund requirements.

Technology Business Incubator at IIT Delhi

4. Tlabs: A startup accelerator by Times Internet Limited. Investment of Rs. 10 Lacs for 10% equity. The program lasts for 13 weeks with mentorship from renowned entrepreneurs and angel investors along with office space for the team. Batches in February and August.

5. GSF: GSF boasts to be the only multi-city accelerator with presence in Delhi, Mumbai and Bangalore. It is spearheaded by Rajesh Sawhney, former President, Reliance Entertainment. The accelerator mostly invests around $ 25,000 to $ 30,000 for a single digit equity (5-8%).

6. Veddis: This business incubator promises ready office environment including office space, technology infrastructure and critical support services required to develop products, manage web-presence. Investments

range from $250k to $10M. Veddis has both investment and incubatee companies in its portfolio.

7. 5ideas: Founded by Pearl Uppal (founder-F&U) and Gaurav Kachru (founder-dealsandyou). 2.5 cr per startup and deep collaboration for 6-12 months and 5 startups a time. Another interesting initiative – Founders-in-Heel – to boost women entrepreneurship specifically.

8. Information Technology Business Incubator(ITBI ), JSSATE-STEP

9. Amity Technology Incubator10. SEED-MDI (Gurgaon)11. Technology based Incubator Society

(TBIS), University of Delhi , South Campus12. Shriram Institute for Industrial Research , Shriram

Scientific and Industrial Research

BUSINESS INCUBATORS AND ACCELERATORS IN BANGALORE

1. Microsoft Accelerator: 4 months of accelerator program with intake of two batches – summer batch(applications start in Nov) and winter batch(applications start in May). Provides free software and development tools via Microsoft’s BizSpark program.

Microsoft Accelerator at Bangalore

2. Khosla Labs: Brainchild of famed Vinod Khosla. Not much info available yet. Spearheaded by Srikanth

Nadhamuni, Head of Technology at Unique Identification Authority of India (UIDAI), as the CEO of the labs. Read an article about their intent here.

3. NSRCEL, IIM Bangalore: Physical incubation facility at IIM Bangalore campus. Support included subsidized facilities like office space, power and infrastructure and services like finance, legal, HR etc. Offers seed funds under DIT TIDE scheme.

4. Angel Prime: Incubator founding team promises to work like co-founders with entrepreneurs. USD $200K-$600K as investment and no set rules for equity. Raised funding from Mayfield India. Focus areas include mobile internet, e-commerce and tablet/mobile app space.

5. Kyron: Lalit Ahuja, John Cook and Larry Glaeser. $50 million accelerator with $100,000 in seed funding for a 10 % equity in the startup. Plans to invest in two batches of 10 startups each year and to incubate 125 companies. First batch in February, 2013

6. GSF: See above in Business incubators in Delhi section for more details.

7. IIIT-Bangalore Innovation Centre8. E health-TBI, PES School of Engg . Tech Park9. Global Incubation Services, JSS Institutions Campus

BUSINESS INCUBATORS AND ACCELERATORS IN MUMBAI

1. Society for Innovation and Entrepreneurship(SINE), IIT Bombay: SINE extends the role of IIT Bombay by facilitating the conversion of research activity into entrepreneurial ventures. Financial assistance is provided by DST. Infrastructure spread over 10000 sq.ft., can accommodate about 15-17 companies. A necessary requirement for incubation is linkage with IIT Bombay.

2. Unltd India: Works with early-stage social entrepreneurs. Programs include incubation, an intensive accelerator and a coworking facility for social entrepreneurs called

The Hub @ Mumbai – Coworking space for NGOsThe Hub. 3 tier seed funding going from Rs.80,000 to Rs.20 Lakh.

3. Venture Nursery: A physical business accelerator program called BOOTCAMP is run for 13 weeks, minimum twice a year. Maximum of 8 starts are selected at a time. Venture Nursery gets 5% equity for accelerator support. Angels associated with Ventury Nursery may invest upto 25 Lacs after graduation.

4. Seedfarm, Seedfund: Physical Incubator has its own space of about 2,000 square feet in Bombay, right next to the Seedfund office.

5. GSF: See above in Business incubators in Delhi section for more details.

6. SP Jain Institute of Management Research Center

BUSINESS INCUBATORS AND ACCELERATORS IN IIT KANPUR

IIT Kanpur, Government Of Uttar Pradesh and SIDBI jointly established this centre which is managed by IIT Kanpur. The major Incubation projects are from IIT Kanpur . The details are available on their website.

BUSINESS INCUBATORS AND ACCELERATORS IN CHENNAI

1. Startup Center: Two programs – resident and accelerator. Resident program focuses on minimum viable product in first three months. Program fee is Rs 50,000 + 1% equity – scholarships are available too. Teams get software freebies. Accelerator program works with team with product V1.0. Funding of Rs 10 Lacs available. Teams need to be based out of Chennai.

The Startup Center at Chennai

2. Villgro, IIT Madras: Incubator for social enterprises. Funding per enterprise is up to Rs 50 Lacs(milestone based) and is invested as equity and/or quasi-equity. Focus verticals include Healthcare, Education, Agriculture and Energy.

3. Rural Technology and Business Incubator (RTBI), IIT Madras: Unique distinction of having been funded both by the World Bank’s InfoDev Project and DST as the only incubator focusing on rural technologies and businesses in India. Provides seed capital and further supports financing through other sources.

4. Technology Business Incubator, Centre for Biotechnology, Anna University 

BUSINESS INCUBATORS AND ACCELERATORS IN KERELA

1. Start-up Village: Public Private Partnership with Govt. of Kerala. Rs.100 cr for 1,000 student startups over a span of

10 years. Students entrepreneurs in the state of Kerala would get attendance and marks grace under this program. Startups recognized by DST would have tax exemption for 3 years for amounts up to 50Lacs.

2. Technopark TBI: Joint initiative of Technopark and the DST, won best incubator in Asia award in 2012. More than 165 startups incubated in last 9 years. Startups are incubated for 11 months, which can be increased later for 11 more months. A nominal fee is charged for infrastructure. Funding support through DST, DSIR.

3. Technology Business Incubator, NIT Calicut4. Amrita TBI, Amrita Vishwa Vidhyapeetham

Startup Village at Kochi, Kerala

BUSINESS INCUBATORS AND ACCELERATORS IN AHMEDABAD

1. Centre for Innovation Incubation and Entrepreneurship (CIIE), IIM Ahmedabad: Comprise of faculty, alumni and students of IIMA, mentors and service providers from the industry who span a variety of functional areas, sectoral domains and geographies. Recently launched $25mn Cleantech fund.

Business Incubator at IIM Ahmedabad

2. National Design Business Incubator(NDBI), NID Ahmedabad: Incubator focus to promote design focussed entrepreneurship. Physical incubation period in NDBI is 24 months which can be extended further by 6 months or more. Physical Incubatees of NDBI are eligible for Service Tax Exemption for three years. Grants are provided through funds from DST, TePP and DIPP.

3. Mudra Institute of Communications: Communications Technology Based Business Incubator. Good infrastructure of communication technologies like Digital Design & Publishing, Digital I-Mac lab, Television Audience Measurement Lab etc. Additional Technical, financial, infrastructural, physical and intellectual support.

BUSINESS INCUBATORS AND ACCELERATORS IN CHANDIGARH

1. Morpheus: Morpheus Startup Accelerator focuses on “super-early stage startups” in a program for 4 months. The accelerator has a strong network of over 100+ graduated companies from previous portfolio. They take 6-9% of equity for the time, support and an investment of 5

Lacs rupees. Founders of this accelerator are based out of Chandigarh, but startups dont need to move to Chandigarh, and interactions happen over phone, skype etc.

2. The Hatch: See above for details. 

BUSINESS INCUBATORS AND ACCELERATORS IN HYDERABAD

1. Wadhwani Center for Entrepreneurship Development – ISB, Hyderabad: Business incubator at ISB, funded and established by Wadhwani Foundation. Another program is K-Hub – a hybrid business incubator in collaboration with Govt. of Andhra Pradesh for new and emerging SMEs. A entrepreneurship development fund is proposed to be setup under PPP involving Govt., Investors, and ISB.

2. CIEE, IIIT Hyderabad3. Life Science Incubator at IKP Knowledge Park

OTHER IMPORTANT BUSINESS INCUBATORS ACROSS INDIA

1. SIDBI Innovation & Incubation Centre, IIT Kanpur: IIT Kanpur has set up the SIDBI Innovation & Incubation Centre (SIIC) in collaboration with Small Industries Development Bank of India (SIDBI) to foster innovation, research, and entrepreneurial activities in technology-based areas.

SIDBI Innovation & Incubation Centre at IIT Kanpur

2. Venture Center at NCL, Pune: A CSIR Initiative for technology businesses (inventors and scientist entrepreneurs).  Various programs – Lab2Mkt program, Mining Program, Social Entrepreneurship Program and BioIncubation. Funds available through DSIR, TePP, MSME and DBT.

3. Technology Incubation and Entrepreneurship Society (TIETS), IIT Kharagpur

4. TBI, BITS Pilani5. TREC STEP, NIT Trichy6. Technology Business Incubator, VIT7. 500 Startups: Founder by Dave McClure famous angel

investor from Silicon Valley. Raised $50mn in 2012 (global fund).Phase 1: $25K investment.~9 in India (so far), including Teleport, MyGola, Cucumber town.

8. Malviya Centre for Innovation Incubation & Entrepreneurship , IIT BHU

9. Technology Business Incubator, KIIT University