How to start a business incubator and get financing.

1. Is Incubation a Winning Strategy?
Evansville Entrepreneurship Sub-committee
December 16, 2015
Craig Kettleson

2. Craig’s Economic Development and
Incubation Experience
• 27 Years in Economic Development
• Specific Incubation Experience
– Wisconsin Department of Development – CBED Program
– Wisconsin Business Incubation Association
– NBIA Certified Incubation Manager
– Two Feasibility Studies: Superior and Phillips
– Portage Enterprise Center

3. Entrepreneurship and Economic
Development: Some Context
• Economic Development a 3 Legged Stool: Entrepreneurship, BRE,
Attraction
• Ewing Marion Kauffman Foundation Study
– New businesses account for nearly all net new job creation and almost
20% of gross job creation in the US economy
• Entrepreneurship is Becoming and Important Rural ED Strategy
• Business Incubation in State and Region
– State: 35 Total Incubation and Kitchen Facilities (WBIA)
– Region:
• 17 Total Incubation and Kitchen Facilities (50% of State Total)
• 32 I&E Spaces

4. Is Incubation a Winning Strategy?
Key Concepts (Takeaways)
• Capital Costs of Business Incubation
– $3.0M for 30,000 sf Facility ($100 psf)
– Portage Enterprise Center: $1.8M for 30,000 sf ($60 psf)
– Janesville Innovation Center: $3.0M for 22,000 sf ($136 psf)
• Operational Costs
– $500,000 Annually
• Incubation is a Process (or Program) vs. Space
– “Starting a company is like throwing yourself off a cliff and assembling an
airplane on the way down” Reid Hoffman, LinkedIN co-founder

5. Is Incubation a Winning Strategy?
Key Concepts (Takeaways)
• Incubators are Businesses
• Success is Based Upon Sound Business Planning and Execution
– Good Market Research; Facility Responsive to the Market
– Provide a Value Proposition to Tenants
• Flexible Space vs. Below Market Rent (Process vs. Space)
• Mentorship
• Networking
• Technical Assistance
– Take Risks Around Plans for Each Tenant
– Strong Management and Well Qualified Service Providers
– Financial Plan to Break Even (ideally within 2-3 years)

6. Options for Evansville
• Traditional Incubation
• Virtual Incubation (Independent or as an Affiliate)
• Satellite Facility (maybe of the JIC)
• Co-working Space
• Hacker or Makerspace
• Other Options??