The Entrepreneur's Resource for Finance

The most valuable service these incubators offer is mentoring and providing management assistance, consulting, business and technical support services. Many have access to capital sources and investors usually look more favorably toward companies that have been accepted into an incubator.

Most incubators focus on one technology, and as such, limit the companies they accept. The majority of incubators have admission standards and accept only those companies with the most potential in the area the incubator focuses upon. While most incubators are high-tech oriented there are incubators for just every type of business.

Companies complete an application and, if accepted, physically move to the incubator building and share office equipment, telephone, reception area and office staff for a monthly payment which can range from less than $100 to more than $500. A private office and office furniture is provided as well. The monthly fees just about cover the operating costs of the incubator and the equity kicker provides the opportunity for the incubator to recoup some of the mentoring and management services. Additionally a lot of incubators require an equity position in the companies they accept.

The goal of the incubator is to graduate businesses from the subsidized incubator environment to the business community as viable thriving companies, usually in two to three years.