University Incubators Present New Growth Opportunities for Startups
Universities have an innate knack for discovery. Their professors regularly pen leading research, their scientific breakthroughs have revolutionized industries, and their contributions to health and medicine have literally halted epidemics and saved lives. Against this backdrop, it seems only natural that colleges and universities would make for excellent startup incubators.
Academia shares the entrepreneurial ambition for discovery and innovation. That focus benefits from unique and often unmatched resources in academic expertise, networking, access to potential funding sources, and industry tools to jumpstart new—and potentially unorthodox—ventures.
More than hype, there is credible data to support the prowess and potential of university-based incubators. A recent study in the Journal of Technology Transfer found that startups that had participated in university incubators created more jobs and sales than their private and non-profit sector counterparts. Researchers uncovered these gains after analyzing nearly 900 companies and more than 150 university-based incubators.
Today, there are hundreds of incubators in higher education, and more are likely to follow. The rise may be attributed to the tech industry’s pervasive startup culture, but researchers also see the influx in university incubators as a byproduct of new demands placed on higher education itself. These demands call for curriculums with real-world application and the cultivation of job-ready skills.
A sandbox for experimentation
A sizable selling point of university-based incubators is the freedom for early-stage testing and experimentation. Before startups become startups, products must be designed, development methods must be established, team dynamics need to be organized, and workflows adjusted. University incubators provide a longer runway to build a startup before student entrepreneurs enter into a competitive market and grapple with life’s constraints post-graduation.
This mindset can be found at Emory University’s The Hatchery, Center for Innovation. The innovation center acts as both a startup incubator and a cultivator for all forms of innovation—for careers, personal development, social impact. The 15,000-square-foot facility offers meeting rooms, makerspace machinery, digital tools, classrooms, and event space. Its top priority is to create a laboratory for experimentation and discovery. This vision manifests itself as a two-pronged goal, with the first to support student innovations (which, in keeping with the Emory student ethos, often seem to focus on new forms of human value and driving positive social impact), and the second to seed intrapreneurial professionals--workers who can apply innovation skills inside offices and companies to drive organizational change as well as growth."
Hatchery Director Shannon Clute said the underlying concept of the incubator is to be an inclusive haven for every student, no matter the field of study, entrepreneurial leanings, or life ambitions.
“We saw an opportunity to genuinely practice innovation in a way that was responsive to the needs of student innovators and service the full student, their personal and professional development.” Clute said in an interview. “We have an opportunity with a center like this…to really get people interested in innovation and help every student from every program understand it’s for them.”
Encapsulated in The Hatchery, Clute underscored its goals for innovation education, skill-building, and experiential learning opportunities.
“Even if we just accomplish the first two [goals], for the bulk of the students, I think we’ll be sending them out into the world with a combination of deep disciplinary expertise and a broader thinking and collaborative skillset that allows them to succeed, both personally and professionally,” Clute said.
Accelerator programs, venture capital, and seed funding
On top of a fertile innovation space, some university incubators enhance their offerings with seed funding and or access to Alumni investors and connected venture capital firms. The investor collaboration and the additional seed funding save would-be-entrepreneurs time courting investors. And at the same time, investors can leverage university incubators as vetting tools for prospective startup investments.
The Massachusetts Institute of Technology’s competitive “Delta v” accelerator is one of these programs. Each year the Delta v Accelerator holds a competitive application process for prospective startups with members in MIT’s degree programs. Teams fortunate enough to be selected—usually numbering about 20 startups—receive up to $20,000 in equity-free seed funding, access to mentorship industry thought leaders, and the opportunity to pitch investors at a demo day finale event.
In 2020, the program muscled through the pandemic, working remotely and presenting startup pitches online. Yet even without mainstage presentations and crowded event halls Delta v’s Bill Aulet, the managing director of the Martin Trust Center for MIT Entrepreneurship, said the program hit its mark.
“It was so great to see the teams at MIT rise up for our first-ever virtual accelerator [and] to see the Trust center team rise up and deliver a product that was as good or better than we’ve done in previous years,” Aulet said, adding that the program was evidence entrepreneurship could be learned and empower diverse students.
Delta v compliments courses and programs at the Martin Trust Center for MIT Entrepreneurship that focus on innovation frameworks, 21st Century business strategies, and state-of-the-art product and service development.
Similarly, startup-driven programs can be found across the U.S. The Emory Entrepreneurship & Venture Management (EE&VM) organization coordinates a similar offering while The Hatchery offers its own Inspiration Micro-Grant program, an initiative that provides coaching and seed funding for current Emory student's innovation projects. Beyond Emory, universities like U.C. Berkeley offer their Berkeley SkyDeck, giving up to $100,000 for companies accepted in its six-month program; and Harvard University has its Venture Incubation Program (VIP), which lets startups battle for up to $75,000 in seed funding.
A well of expertise, tools, and resources
In addition to accelerator programs and a space for experimentation, the most obvious benefit student entrepreneurs enjoy, are resources.
For the savvy startup, universities offer an embarrassment of riches. They have business schools staffed with professors specializing in finance, accounting, marketing, operations, and business management. There are clubs and associations for collaboration and feedback. Opportunities to harness volunteer support. Seasoned faculty carrying years of R&D experience in an array of industries and fields.
With all the classes, curriculums, and equipment, universities essentially enable entrepreneurs to scale faster, plan more effectively, and design more efficiently and affordably than they would on their own. And though it’s true university incubators don’t house every university resource, startups don’t grow in a vacuum either. Depending on the focus, a student entrepreneur can take advantage of any number of resources while on campus.
For these benefits alone, it’s no wonder researchers have estimated that one-third of all business incubators are university-based. And in some countries like Taiwan, they represent 70 percent of all incubators.
Still, advantages and benefits notwithstanding, Emory Hatchery Director Shannon Clute contends the greatest value of university incubators is their capacity to teach life skills. A startup may succeed or fail, entrepreneurship may entice or dissuade, but an innovation mindset, Clute argues, will assist students over the course of their careers, in their personal lives, and help overcome a gamut of challenges.
“The Hatchery will empower students to engage in creativity, purposeful play, and innovation as preparation for engaged, global citizenship that addresses the world’s big challenges,” Clute said when the incubator was first announced in 2020. “It’s a place [students can] apply their studies to real-world problems and to succeed beyond Emory.”
To learn more about The Hatchery and university incubators you can visit Hatchery.emory.edu or email The Hatchery staff at thehatchery@emory.edu. The Hatchery is a unit of Emory University Academic Innovation.