The Top University Incubators and Accelerators
Remember the good ol’ days, say 1990. Back then, if you caught the entrepreneurial bug, you’d set up shot in your garage, writing code and guzzling Mountain Dew until you had something to sell. These days, you’ll find far more support in launching a startup – especially if you’re a business student. For one, startups are big business, with every investor dreaming of another Facebook or Reddit falling into their laps. For another, schools understand that a successful startup means supportive alums with deep pockets and a need for graduate talent.
Not to mention, entrepreneurship – like MBA programs – is not just for business majors anymore. You’ll find plenty of career changers, single moms, and artists jumping into the game. But there’s a huge learning curve. And newbies are bound to quickly run across the big questions .What’s a patent? Why do I need to worry about cash flow and equity (I thought we were going to change the world)? What do you mean the prototype isn’t ready to manufacture (and stop using acronyms)? Of course, how long can I keep this up before I have to start hiring people? Such questions require expertise. When it comes to office space, ask yourself this question: Do you really want your investors to make a site visit to your garage or basement (where they may end up deciding to take your mom’s chocolate chip cookies public instead)?
Those are just a few reasons why schools are setting up incubators and accelerators, where entrepreneurs can build their businesses. Think of it as bootstrapping – inside a furnished pair of boots. But these spaces are more than just office space and equipment. Entrepreneurs can also tap into expertise in law, finance, marketing, personnel, and operations through faculty and practitioners. What’s more, these hot spots are a place for the founders to tap into alumni, investors, industry players, and even fellow entrepreneurs to build networks and synergy.
And you’ll find plenty of success stories. Among the privates, the famed Y Combinator yielded DropBox and TechStars counts DigitalOcean among its alumni. And the biggest university success story has been Auditude, which got its start at the Rice Alliance for Technology and Entrepreneurship in 2005 before being sold for $120 million dollars seven years later.
And that begs the question. If you are an ambitious MBA student with a big idea (and even bigger ambitions), what incubator can help you get the best start? That question is answered annually by UBI Global, which ranks both the university-run and university-affiliated incubators worldwide. As part of its ranking, UBI Global evaluates 1200 incubators and accelerators from 64 countries. In turn, over a fourth of these operations merit being benchmarked against over 60 key performance indicators (which cover areas like jobs created, revenue generated, funding, firm survival rate, deal flow, coaches and mentors available).
The UBI Global rankings are divided into four categories: university business incubators, university-associated incubators, university business accelerators, and high impact incubation programs. A university incubator is defined as an “incubator managed or formally affiliated with a university,” while an associated incubator “has no formal affiliation [with a school], but works closely with a university.” At the same time, incubators and accelerators are often differentiated in terms of how long they support startups (accelerators often limit the stay to 2-4 months with tenure at incubators generally running longer) and equity (accelerators tend to require some ownership, while incubators are supported by public and private funding).
Globally, the top university incubator is SETsquared, a UK partnership between the universities of Bath, Bristol, Exeter, Southamption, and Surrey. Founded in 2003, SETsquared has helped launch more than 1,000 high tech startups, contributing over $3.8 billion to the UK economy, with another $15 billion in value projected over the next decade according to The Telegraph. The partnership, which includes five different centers, also boasts a 90% survival rate among companies, which have generated over $1 billion dollars in investment. Like many accelerators, SETsquared provides access to desk space, training, experts and investors. However, it is best known for its annual London Investment Showcase, attended by high worth investors and government funding bodies.
Finishing second is Taiwan’s Innovation Incubation Center at Chaoyang University of Technology. Rounding out the top three is Toronto’s DMZ (Digital Media Zone) at Ryerson University, whose recent success stories include a photo-sharing app used by 500,000 medical professionals to help diagnose conditions in patients and an employee engagement forum that landed over $3 million in seed money in October. Since being launched in 2010, the DMZ has helped raise $120 million dollars and create nearly 2,000 jobs.
Among university associated business incubators, Ireland’s Dublin Enterprise and Technology Centre (also known as the Guinness Enterprise Center) topped last year’s winner, the Youngstown Edison Business Incubator. Founded in 2000, Guinness is home to 320 people in 80 startups (not to mention an on-site café). Their most recent success was So Sell It, an online trading community that is becoming Ireland’s answer t Craigslist. Founded in 1995, Youngstown is among the oldest American incubators, nurturing firms that have employed 500 people and generated over $54 million dollars in sales according to the Cleveland Plain Dealer. This incubator is associated with several local universities, including Youngstown State, Kent State, the University of Akron, Case Western Reerve, and Hiram College.
In the accelerator category, Canada’s Entrepreneuriat Laval ranked first, followed by Ireland’s NDRC and MassChallenge, a partnership between Boston University, Northeastern University and the Worcester Polytechnic Institute. UBI Global also ranks incubators by impact, acknowledging those university arms that “stand out from average-performing incubation programs with better outcomes on economy enhancement, access to funds and post incubation performance indicators.” Here, Alcazar & Compania NETBA, part of Mexico’s Universidad de la Comunicacion, ranked above all others, including Russia Pulsar’s Venture Capital and the Netherlands’ Statupbootcamp High TechXL.
In North America, the highest-ranked university incubator was 1871, a partnership between Northwestern, the University of Chicago, the University of Illinois, Loyola University, the Illinois Institute of Technology and DeVry University. It houses over 325 early stage digital startups and has emerged as Chicago’s de facto tech hub. And business is booming there, with 1871 adding another 25,000 square feet in October to meet demand. Surprisingly, four of the five top university incubators are Canadian, including the DMZ (Ryerson), Innovate Calgary (University of Calgary), TEC Edmonton (University of Alberta), and Western Research Parks (Western University). However, the Top 10 is evenly split between Canada and the United States, with the Franklin Business Incubator (Paul D. Camp Community College), Ohio University Innovation Center, the Kevin M. McGovern Family Center for Venture Development in the Life Sciences (Cornell University) and VentureLab (Georgia Tech) also featured in UBI Global’s Top 10.
For accelerators, Launch Chapel Hill (University of North Carolina) and The INKUBATOR (Northern Kentucky University) rank below MassChallenge among the top American accelerators. And the Los Angeles Cleantech Incubator (LACI) and the Youngstown Edison Business Incubator were the highest impact incubation programs in North America for 2015.
University associated incubators, in particular, have been making heavy strides according to UBI Global research. “University Associated Business Incubators attracted a total of $636M, meaning each of the 69 incubators has received an average of $9.2M,” UBI Global shared in a statement. “With regard to deal flow University Associated Business Incubators as a whole receive 6,600 applications per year, equating to an average of 95 applications per incubator. In the last 5 years, University Associated Business Incubators have created 24 200 jobs and over the same time period generated $2.2B in sales, equating to an average of $31.6M in sales per incubator.”
For more in-depth rankings, click on the link below.
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Sources: UBI Global and UBI Global
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