How To Set Up A Successful University Start Up Incubator Rk2
How To Set Up A Successful University Start Up Incubator Rk2
How to set up a
successful university
startup incubator
November 2014
Proven infactories
the US as a model for nurturing young companies, start-up incubators are now thriving in
Company
Europe. But is there an ideal model, and if not, what is the best flavour of incubator for your needs?
Isis Enterprise at the University of Oxford has set up incubator programmes worldwide. Here, Britta
Wyatt and Renate Krelle gather metrics on successful programmes and share top tips for building a
start-up incubator.
Start-up incubators can support students in developing entrepreneurial skills and provide tailored support
for early-stage, high-growth businesses and ideas.
At their best, they can also create a virtuous cycle of job creation, university-industry collaboration,
revenues for local businesses and for governments and show tangible benefits of academic impact.
A recent Isis Enterprise review of UK university start-up incubators found that the many were launched in
the last two years. Increasingly, then, start-up incubators are becoming a requirement rather than nice-tohave for UK universities.
Company factories
The first business incubator opened in 1959 in the US. Since then there has been an enormous rise in startup incubators, with nearly 1,200 incubation programmes in the US, and over 7,000 worldwide.1
Incubators have been shown to increase the chance of a business succeeding after five years from 30 per
cent to over 85 per cent.2
But improved success rates for entrepreneurs are only one of the many benefits from successful incubator
programmes. Communities and universities can also see impact from incubating and accelerating start-ups.
At Isis Enterprise, we help clients build start-up support services, including incubators, accelerators, seed
funds and entrepreneurship training. We run our own Isis Software Incubator, and recently completed a
best practice review of nine UK and five US university start-up incubators and accelerators.
Here, we share our top tips for setting up a successful start-up incubator.
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For example, Isis Enterprise recently ran a survey of academics and students for a proposed incubator
service, which found that what people really wanted even more than office space were pre-incubation
support services. These included assistance in evaluating the commercial potential of new ideas and
building early business propositions, often before a product is built.
The survey highlighted the need for basic advice with regards to setting up a business, including financial,
and legal considerations.
3) The ideal incubator?
While there is no ideal incubator, it can be helpful to look at other start-up incubators for inspiration.
Isis recently completed an in-depth review of both UK and US university start-up incubators.
Below are some metrics from the study:
Most programmes were hosted either by a Tech Transfer Office or Entrepreneurship Centre. Eight of
the programmes had more than one host.
Staff number varied from 1 to 12, but most programmes had 1-2 core employees.
In most instances, the programme managers had an entrepreneurial or business background. Students
and recent alumni were another common source of incubator staff.
Corporate sponsorship (for example a prize fund for the winner of a pitch day)
Public funds
Economic development agencies
Alumni donors
Universities should expect to provide ongoing support to the incubator to some degree, although there are
varied and creative ways of structuring this support. In addition, softer benefits are a big part of the
vision which justifies a new incubator programme.
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Business Retention & Job Creation Successful incubator ventures are likely to remain in the local
ecosystem, creating opportunities for new job creation as well as channels for university-industry
interaction.
Increased Tax Revenue A report by the NBIA found that in the US, every $1 of public investment in
incubator translated into $30 in local tax revenue.3
Increased Impact Figures University start-up incubators serve as a pipeline for new student ventures
that may not be exploited by traditional technology transfer channels.
Alumni Engagement A software incubator has to potential to attract both donations from and
engagement with alumni. A 2014 QAA report noted that Entrepreneurial alumni are the main source
of donations to universities and are more likely to be inclined to donate if they believe that their time
at university had a material influence on their subsequent entrepreneurial success.5
Using both existing data and statistics such as the points above and tailored data from your own
stakeholders and prospective participants can bolster your case.
6) Geared for success
Gearing a programme for long-term success is one of the key elements of a good start-up incubator. Good
policies and operational practices are part of this process.
A University will need to look closely at its IP policy and benefits-sharing policies, and make sure these are
both attractive for participants and also structured so that investors will make good returns. Isis Innovation
has managed this process for a number of institutions.
Externally, you will need to build communications channels in multiple areas to bring in mentors and
service providers, connect with investors to support your out-going start-ups, and generate positive buzz to
attract investors.
Within the university, you will need to generate awareness to attract participants, volunteers and mentors.
Particularly for smaller universities, incorporating an incubator as part of an entrepreneurship course or
linking it to course-work can be a great way to start things off and increase student participation.
NBIA, Business Incubation Works,1997; NBIA, 2006 State of the Business Incubation Industry.
Lent A (2012) Generation Enterprise: The Hope for a Brighter Economic Future; Lent A (2012) A time for heroes? RSA Journal, Autumn, pp 16-17.
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QAA Scotland, Creating Entrepreneurial Campuses: A report for Scotland. February 2014.
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