Incubators becoming 'accelerators'?

Backers of early-stage ventures becoming more interventionist
competitions, development processes, mentoring and incubation – all combined;
but TalkTalk opens good old-fashioned incubator
   We were recently asked by the Head of a University Incubator about models for the development of early-stage ventures that we might have encountered in the course of our research with the Royal College of Art into Innovation Workshops. Common to the best of these (the BBC, Nesta, Stanford Research Institute and Seedcamps) are four elements:
*   a competition (see eg Innovation Tournaments Ulrich and Terwiesch, Wharton),
*   development processes (eg workshops, exchanges, progress discussions),
*   the best winning the opportunity to pitch to ‘investors’,
*   who offer a further period of development and support.
Good mentoring and advice – from experienced experts remains paramount (we are working with a group of mentors at UCL); and what is sought from ‘investors’ is support now, but at this stage not necessarily in return for equity, rather for priority rights at subsequent stages of development. (Perhaps Incubators themselves should retain some residual rights.)
    Nesta’s report ‘The Startup Factory’, just published (http://www.nesta.org.uk/publications/assets/features/the_startup_factories_report_feature), attempts to analyse the ‘accelerator programme model’ – as comprising
•    An application process that is open to all, yet highly competitive.
•    Provision of pre-seed investment, usually in exchange for equity.
•    A focus on small teams not individual founders.
•    Time-limited support comprising programmed events and intensive mentoring.
•    Cohorts or ‘classes’ of startups rather than individual companies.
    They report that the number of accelerator programmes has grown rapidly in the US over the past few years and that there are signs that more recently, the trend is being replicated in Europe. ‘From one accelerator programme, Y Combinator in 2005, there are now dozens in the US that are funding hundreds
of startups per year. There have already been a number of high profile startup successes from accelerator programmes.’
    ‘Early evidence suggests they have a positive impact on founders, helping them learn rapidly, create powerful networks and become better entrepreneurs. Although incubators are sometimes stigmatised as providing ‘life support’ to companies, these accelerator programmes are notable for the high quality of both mentors and startup teams they work with and the value they add to companies.’
     Venture Capital and Angel investors have just rescued an accelerator scheme aimed at bringing early-stage digital businesses to the North East (‘ignite100’). The scheme comprises initial cash support for ten chosen teams to participate in a 13-week development programme (which consists mainly of a series of intensive short meetings with a panel of over a hundred experts as mentors), after which those deemed to have a viable early-stage business receive a more substantial investment. (FT 9.7.11) A similar scheme (called ‘Springboard’) is in the course of having its first outing in Cambridge, though without the same assurance of investments at the end of the programme.   
    While incubators are becoming increasingly curated, TalkTalk has just responded to the need for more incubator space in London by opening a new 150-desk open-plan incubator for small start-ups. Running a Dragons’ Den-type beauty parade was consid-ered in order to decide which companies should get space, but word of mouth among the start-up community apparently gave TalkTalk a wide selection to choose from.
    To add to the findings of our research, we would like to hear from those who are in the thick of early-stage ventures – about their successes, in what is evidently a burgeoning, evolving and so far poorly served market. [john.whatmore@btinternet.com]

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