Amid Talk of Bubble, Xconomy Incubator Guide Grows to 121 Listings
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there’s plenty of conversation and buzz around just how valuable these programs are to startups and the broader economy. Kathryn Hough of the technology news site Techli wrote a piece advising entrepreneurs to question not just which incubator they should apply to, but whether or not they should join an incubator at all. She argues that some incubators hurt startups, noting the loss of control and potential for being matched with the wrong mentors or no mentors at all.
And Jared Konczal, an analyst with the Ewing Marion Kauffman Foundation, recently pointed out in a guest post for Forbes that the returns and job creation that incubators are credited for largely hinge on Y Combinator, widely considered the incubator program that almost all similar and successive tech mentorship programs draw inspiration from. Once the Mountain View, CA-based operation is removed from the data, the value of the exits and the jobs generated drop significantly. There’s also a general lack of clarity and availability in the data on incubator company returns. In his column last year, Wade brought up the widely shared concern that there isn’t enough later stage investor interest to support the graduating startups, and that not enough of them will succeed to generate financial returns for those running the incubators.
Our intention in publishing this guide is not to take a position for or against the existence and growth of incubators, but to paint a picture of the landscape and how it has evolved. It’s a resource unmatched in its depth and scope, and is valuable for entrepreneurs, investors, universities, and those interested in the innovation scene. A proliferation of incubator programs typically reflects an increased interest in entrepreneurship. This year’s guide shows that interest extends to 31 states in the U.S., many of which haven’t been thought of as tech innovation hubs (see the state index).
We continue to see the growth of both the classic funding-in-exchange-for-equity models, and government- and university-sponsored programs for supporting startups. And many of the new programs added in this year’s guide focus on a specific technology area or a specific entrepreneur demographic, showing that there’s a move toward offering more specialized, targeted support. The cleantech incubator Greenstart is taking an even narrower focus, with smaller class sizes and dedicated resources for company design, the program recently told Wade.
Whatever stage you’re at in building your business, we hope the 2012 Xconomy Guide to Venture Incubators will help you figure how to best navigate the terrain.