A small and successful University Incubator developing its support for participants
With basic and low cost office spaces, this incubator is developing into an Accelerator community – by enhancing support and its connectivity with Tech City.
Accelerator out of Incubator? The London Metropolitan University ‘Accelerator’ has spaces for 30 hi-growth SMEs – who are normally allowed to stay for no more than two years (‘it concentrates the mind’); and it provides space for the annual winners of a startup competition. It is regularly full and there is no shortage of new applicants.
The Incubator consists of offices of various sizes on three floors, with a big meeting room and two semi-balcony small rooms. There is a well-equipped kitchen, but no r&r space – for hanging out with other people. The student Accelerator has its own big communal work space.
The Incubator is ten years old. A tenant of Hackney Community College, its key asset is that its low rent enables it to offer well-priced accommodation on the edge of Tech City, and so enables occupants to make use of the connectivity there.
All Scale-ups: chosen for their good prospects – all are computer-based and all engaged in scaling up. Most of them are looking for further funding (though not yet A rounds) and for more customers, many with overseas markets as their targets. (‘Their confidence sometimes leads them to be over optimistic about raising funds; and their hirings – of CMOs – sometimes fail because they attract ‘company men’ rather than ‘hustlers’.’)
Supporting events are held, and there are occasional meetups; however there are no ‘office hours’ (regular reviews of progress and plans) and no cohort of mentors. Occupants include a patent attorney and a PR company – with their services readily available, but there are few links to serial entrepreneurs, the VC community or Angels, though there is said to be some cross-pollination among participants. But they have to make their own connections. Some members of the SMEs in the Incubator act as mentors to the student cohort.
Its success can be measured by the fact that in the last year its businesses added 115 employees, and raised £5.7 million in funding (previous year £1.4mn, and the year before £0.5mn). The success rate on exit from the Incubator is around 80%.
A student startup scheme (subsidised by the University) uses some of the space. Around a thousand students attend workshops and other events in the course of a year; and 150 applied to join this year’s Accelerator, from which a dozen are selected for 12 weeks of intensive development together, and are offered six months of free accommodation thereafter in the Incubator. (A current objective is to find funding that will support their earnings to help participants to get through to a seed round.)
Toby Kress, its cornerstone, and responsible for its direction, operation and management for the last two years, has himself been part of a successful startup. His role includes the selection of participants for the Incubator (for which he uses the help of a couple of Alumni). Approachable and readily available, he meets all the SMEs about once a month to offer help, contacts etc; and he meets his counterparts in other incubators intermittently.
To add to the support it offers, Toby has recently initiated a programme of Funding Days, at each of which one of five VCs/Angel groups gets to meet 4 or 5 of the SMEs, and this should help them to develop their funding strategies; and he is seeking to make firm contacts with well-connected people to whose networks the occupants of the incubator can then get access.
Why is it so successful? Not open-plan, with no r&r space, and few mentors or outside connections, it can only be its boss! A vital role in any incubator.
John Whatmore, July 2016