Lesa Mitchell, vice president of advancing innovation at the Ewing Marion Kauffman Foundation, one of the world’s largest foundations devoted to entrepreneurship, notes private accelerators (for profit) come with a long list of advisors with experience working in a global arena.
“Many of the mistakes that are made early in the life of a new firm have down-stream implications,” says Mitchell. “If you don't start off thinking global it may have very negative implications. But, if you are starting a company in one country with the idea of who the customer is without thinking about customers in other parts of the world, it could be a problem. Working very early in the life of a firm with advisors that have done business in many parts of the world is a huge advantage to a new company team.”
Yesterday And Today
Though the concept is hardly a new one —the first U.S. business incubator, The Batavia Industrial Center opened in Batavia, N.Y., in 1959 — the idea of supplying entrepreneurs with a variety of business-assistance services didn’t gain momentum until the late 1970s, according to NBIA.
Since the late 1990s, the model, which is highly adaptable, has taken off, according to Kitts of NBIA.
Not just a U.S. phenomenon, Kitts of NBIA estimates that there are about 7,000 business incubators worldwide, with between 50 and 65 countries represented in the NBIA’s membership at any given time.
Historically, NBIA-member incubators have reported that 87 percent of all firms that have graduated from their incubators are still in business, while 84 percent remained in the incubator's community.
According to TechStars’ website, over 80 percent of TechStars companies have been funded with venture capital after TechStars or have quickly become profitable on their own.
Playing To The Crowd
Businesses aren’t the only ones benefiting from the kindness of strangers. In 2009, Perry Chen started a platform for artists to display their wares in the hopes of snagging a patron or two. Kickstarter.com, which relies on the notion of crowd-funding — a lot of people contributing a small amount of money — selects projects, posts them on their site for others to view, and gives them 90 days to raise the requested funds or the deal dies.
Since its inception, Kickerstarter.com has raised over $70 million for those seeking funding. As opposed to an equity stake in a film or album, those who back the artists on the site are often given a memento for their part in the process.
Michael Lucio Sternbach, musician and filmmaker, says he found out about Kickstarter.com from a friend who was using the site to fund an independent film.