Programs designed to discover and launch promising startups are no longer the domain of the tech sector. The U.S. has become rich with new incubators and accelerators aimed at startups in such categories as agriculture, art and design, biotech, food and clean energy. Let’s cover what you need to know about some of these programs.
Many agricultural-technology entrepreneurs are farmers who’ve taken to their garages or workshops to build mechanical devices that solve common agrarian problems. To serve such inventors, government officials in Ottawa County, Mich., developed the Great Lakes Ag-Tech Business Incubator.
This program — piloted in 2012 and now operating as an independent nonprofit — doesn’t corral startups into a communal workspace. Instead, participants work solo at home, periodically meeting with mentors in county government conference rooms to work on commercializing their equipment, machines, software or other ag-tech inventions. In the event a participant needs an office, workshop, or warehouse, the incubator will broker a deal with regional landlords.
Entrepreneurs receive guidance on patents and trademarks, focus groups, pilot programs, pricing, manufacturing, distribution and marketing. In exchange, they agree to give the incubator a small percentage of their gross annual sales once their companies become profitable, with a contract buyout available after nine years.
The program considers startups of all stages, as long as the profit potential is high. As former executive director Mark Knudsen explains, “Our target is to have 15 high-quality businesses at the end of three years.”
Art and Design: NEW INC
Artists and designers have long been underserved by traditional tech incubators. “Scaling may not be their first priority,” says Julia Kaganskiy, director of NEW INC, an incubator run by the New Museum in New York City. For example, she says, rather than solving a widespread problem, technology-minded artists may want to create a product that’s simply playful or makes a statement.
NEW INC gives artists, designers and technologists a place to build products, design studios and web-development shops. The program offers qualifying entrepreneurs full-time annual memberships ($ 600 per month) or part-time three- to six-month terms ($ 350 per month), both renewable, with space available for 100 members. Artists retain all equity in their businesses and all intellectual property rights to their work.
To accommodate its range of members, NEW INC teaches fundraising tactics, from grant writing and crowdfunding to angel investments and venture capital. Demo-day audiences include investors, gallery curators, creative directors from top brands and agencies and members of the press.
Collaboration is encouraged. Allison Wood met her company’s CTO, creative director, art director and several freelance designers through NEW INC. “It’s been pretty awesome to have all that under one roof,” says Wood, co-creator and founder of Reify, who now rents a second office in Brooklyn for her growing team. “I don’t think you can pay for that.”
Biotech: The BioScience Center
At The BioScience Center, an incubator for biotech and life-science startups in Albuquerque, NM, entrepreneurs are encouraged to stay for at least three years. “Biotech has a little bit longer runway,” says Lisa Adkins, COO and director of the center, which launched in 2013. “It takes them longer to get going and certainly to get funded and to get to proof of concept and whatever sort of testing they need to do.” Not to mention, she adds, to get through the protracted FDA approval process.
For founders on this path, the 20,000-square-foot center provides offices and wet chemistry and microbiology labs at below-market rates ($ 23 per square foot for office space, $ 25 for labs); alternatively, founders can exchange a small percentage of their equity or future revenue for use of the space. Either way, the package includes an assortment of industry mentors, workshops and mock pitch sessions.
By 2015, the privately-owned incubator, founded by Stuart Rose, a serial entrepreneur with more than four decades in the pharmaceutical manufacturing industry, had already hosted more than 20 startups developing vaccines, medical devices and research tools. Some of them have since moved to their own space, Adkins says. The center also houses an attorney, a technical writer, a prototype-development company and other anchor tenants that provide startups with reduced-rate services.
It seemed to former IT professional Michael Madigan that everywhere he looked in his home base of Portland, Ore., was brimming with food trucks, pop-up restaurants, DIY bakers, cheesemongers and condiment-makers selling at farmers’ markets.
“I asked myself, ‘Where do these folks cook?’” Madigan recalls. He also wondered if they could use help growing their ventures.
After researching food incubators around the country (and finding just two), in 2011, Madigan opened KitchenCru, Portland’s 4,800-square-foot incubator for culinary companies. Participants pay roughly $ 23 to $ 28 an hour, plus food-storage costs, to rent space in the fully equipped, licensed commercial kitchen. Professional kitchen experience isn’t required; entrepreneurs need only register their business with the city and state, get a food-handler’s permit and obtain liability insurance.
Besides helping with business plans, branding and ecommerce sites, Madigan and his three-person team help founders scale their recipes for commercial production and create sales and distribution strategies. “It’s all about getting the product manufactured and finding buyers for it,” he says.
More than 100 food artisans have rented the space, about 20 of whom have opened shops or otherwise seen regional success. Ben Jacobsen is one of them. He spent 18 months at KitchenCru getting Jacobsen Salt Co., which sells locally harvested sea salt, off the ground. “The energy in that place was incomparable,” says Jacobsen, whose 4-year-old company now has 35 employees. “It was just so much fun and inspiring to be in.”
Madigan allows startups to stay at KitchenCru as long as they need; founders usually know when they’ve outgrown the space, he says. “One of the happiest days for me,” he says, “is when a client comes to me, big-eyed, and says, ‘I just quit my job to do this full time.’”
Clean Energy: Greentown Labs
In late 2010, four energy entrepreneurs pooled their resources for an affordable Boston-area warehouse space where they could build hardware prototypes. Today that collective has ballooned into Greentown Labs — 40,000 square feet of office, event and machine-shop space that incubates nearly 50 energy and clean-technology startups.
In addition to workspace, members get shared machine-shop tools, free software licensing and access to hardware such as 3-D printers. “They basically get about $ 130,000 in resources,” says Greentown Labs CEO Emily Reichert. And that’s not including the benefit of working alongside dozens of engineers who can help troubleshoot in a pinch.
Educational workshops and one-on-ones cover topics like manufacturing, marketing, scaling overseas, intellectual property and government funding and contracts. Exposure to angel, VC and corporate investors is ongoing, with financiers periodically visiting from as far as Silicon Valley and an annual demo day attracting roughly 250 attendees, Reichert says.
Greentown Labs doesn’t take a cut of its startups. Instead, members pay $ 425 per desk and $ 3.20 per square foot of lab space monthly. There’s no limit to how long companies can stay, although most leave after an average of 16 months, usually after raising a big financing round, Reichert says. More than 75 companies have used the space, with alumni scattering around the U.S. Collectively, they’ve created more than 300 jobs and raised more than $ 70 million in funds.