| What is an incubator? | Physical space for startups that offers the best environment (e.g., low rent, office supplies) possible to ensure startups hatch into healthy businesses |
| When and how did incubation start? | In the 1960's landlords had empty factories they had to pay tax for every month so they decided to do something with it (first generation incubation) |
| How many generations of incubation are there? | 3 |
| What defines incubation generation one? | Using the empty spcae of a building |
| What defines incubation generation two? | Realizing there's potential to increase the survival rate of startups -> offering mentoring and coaching, plus offering coffee etc |
| What defines incubation generation three? | Policy makers and politicians became interested -> added to the portfolio of mentors and coaches into industry experts, accounting and financial advisors, marketing experts, investors etc (whole packcage) |
| What is a lurker company? | Companies in an incubator program who don't integrate or share their knowledge with others |
| What's a zombie company? | A company too poor to live but too rich to die, but it will survive under subsidized forms such as an incubator program (below market rent etc) |
| Definition incubator (as opposed to accelerator)? | Non-competitive, non-cyclical selection
1-5 years
Less intense education and mentoring
Rent, service income |
| In one sentence, what is an accelerator program? | A fixed-term, cohort-based program, including mentorship and educational components, that culminates in a public pitch event or demo-day. |
| What was the process for the first (Y Combinator) acceleration program? | Entrepreneurs were provided with a space -> worked intensively on their portfolio (sleep, eat, work in the office) -> well known guest speakers would come in (such as mr Zuckerberg himself) -> Demoday! (pitch event) -> gain investors |
| How did acceleration programs begin? | First one was founded by Paul Graham (entrepreneur, essayist, philosopher), Y Combinator in 2005 ''summer founders program'' |
| What are some example questions you may be asked upon application to an accelerator? | -Six months from now, what’s going to be your biggest problem?
-Who is “the boss”?
-How does this become a billion-dollar company?
-Tell us something surprising that has happened. |
| Name 3 design elements of a acceleration program | 1. Consultation intensity
2. Peer disclosure
3. Customized learning |
| What happens after the acceleration program is done, next possible steps (6 are mentioned in the slides)? | 1. Bootstrapping (move out, use return on sales, slowly grow business)
2. Incubation
3. Another accelerator
4. Merger and Acquisition (sell business)
5. Serier A fund (venture capitalist, investor)
6. Failure (60-80%) |
| How much do accelerators normally ask in return? | Around 7% in equity |
| What are the flipsides of accelerators? | -''Accelerators are venture capital in disguise'' (harder to obtain funding, can't exploit information asymmetri in an accelerator)
-Rich vs King, the founder dilemma (give up part of the idea and value in order to develop it) |
| Definition accelerator (as opposed to incubation)? | Cyclical, competitive selection
Mentorship and educational components
Culminating in public pitch event
2-10% equity stake |
| What is academic incubation and acceleration? | Universities pay! (objective to foster entrepreneurship) |
| IXA/Amsterdam venture Studios are using a few policies similar to acceleration/incubation programs, which ones? | -Funding/Access to capital
-SSOP support
-Entrepreneurship education
-Univ. Commercialization
-Entrepr. in residence |
