best practices in action i ii best practices in action Guidelines for Implementing First-Class Business Incubation Programs REVISED 2ND EDITION BY Corinne Colbert, Dinah Adkins, Chuck Wolfe & Karl LaPan MCNAUGHTON & GUNN | SALINE, MICHIGAN NBIA gratefully acknowledges these sponsors who helped underwrite production of this book: iii Other Books Published by the National Business Incubation Association Speak Up! An Advocacy Toolkit for Business Incubators (PDF) Put It in Writing: Crafting Policies, Agreements, and Contracts for Your Incubator Measuring Your Business Incubator’s Economic Impact: A Toolkit (print and PDF) Incorporating Your Business Incubation Program: How Tax Status and Business Entity Affect Operations 2006 State of the Business Incubation Industry (print and PDF) Incubating in Rural Areas: Challenges and Keys to Success A Practical Guide to Business Incubator Marketing Technology Commercialization through New Company Developing a Business Incubation Program: Formation: Why U.S. Universities Are Incubating Companies Insights and Advice for Communities Incubating the Arts: Establishing a Program to Help Artists The Incubation Edge: How Incubator Quality and Regional and Arts Organizations Become Viable Businesses Capacity Affect Technology Company Performance Bricks & Mortar: Renovating or Building a Business A Comprehensive Guide to Business Incubation, Completely Incubation Facility (PDF) Revised 2nd Edition Human Resources: Finding the Right Staff for Your Incubator Incubation in Evolution: Strategies and Lessons Learned in Four Countries (print and PDF) Business Incubation Works Self-Evaluation Workbook for Business Incubators The Art & Craft of Technology Business Incubation: Best Practices, Strategies, and Tools from More Than 50 Programs Incubating Technology Businesses: A National Benchmarking Study Find these titles and others at www.nbia.org/store. A Brief History of Business Incubation in the United States Does Technology Incubation Work? A Critical Review of the Evidence (PDF) © 2010 NBIA Publications All rights reserved. Printed in the United States of America. This publication is a creative work copyrighted by the National Business Incubation Association and fully protected by all applicable copyright laws. Reproduction or translation of any part of this work beyond that permitted by Section 107 or 108 of the 1976 United States Copyright Act without the permission of the copyright owner is unlawful. Requests for permission or further information should be addressed to Permissions, NBIA Publications, 20 East Circle Drive, #37198, Athens, Ohio 45701-3751. This work has been made possible in part by support from Claggett Wolfe Associates and Maryland TEDCO. Published by ISBN-01: 978-1-887183-69-7 McNaughton & Gunn Design by: Ullman Design 960 Woodland Drive www.ullmandesign.com Saline, MI 48176 telephone: 734.429.8757 www.bookprinters.com iviv CONTENTS ■ ■ ■ FOREWORD vii ■ ■ ■ ACKNOWLEDGMENTS ix introduction 001 .01 governance 004 .02 staffi ng 020 .03 fi nances 032 .04 facilities management 042 .05 program evaluation 054 .06 client entrance and exit 064 .07 leveraging innovation 086 .08 client services 098 .09 case studies 132 ■ ■ ■ AFTERWORD 159 ■ ■ ■ GLOSSARY 160 ■ ■ ■ BIBLIOGRAPHY 165 ■ ■ ■ PROGRAMS MENTIONED 166 ■ ■ ■ INDEX 168 V Claggett Wolfe Associates is an economic development consulting fi rm serving U.S. and international clients in support of economic growth and diversifi cation through entrepreneurship and SME development. Founded in 1996, Claggett Wolfe Associates has been engaged in all aspects of the SME development process from public policy development and program feasibility assessment to business planning and program operation. Core areas of expertise include entrepreneurship development, incubation/acceleration, technology commercialization and small business lending. The company’s strength is in its ability to assess market, economic and cultural dynamics to help its client identify opportunities, attain goals, manage expectations and maximize impacts. Since its inception, Claggett Wolfe Associates has provided services to corporations, foundations, incubators/accelerators, colleges/universities, Native American tribes and government agencies (national, state and local) for projects in Bahrain, Canada, China, Japan, Kuwait, Mexico, Saudi Arabia, Taiwan and the United States. vivi foreword Publication of this new, completely revised and expanded Best Practices in Action: Guidelines for Implementing First-Class Business Incubation Programs follows some nine years after the original. Thus, the near decade of progress in the industry should be readily evident here. Despite the fi ne models and examples presented in the earlier edition, this new volume has been enriched by the vastly increased sophistication of business incubation as it is practiced today in the United States and elsewhere. Since the nascent years of the 1980s, our understanding of how to serve entrepreneurial fi rms, commercialize technologies, create wealth, and promote entrepreneurship in our communities has increased exponentially. Therefore, we are pleased to present on these pages many activities, policies, techniques, and other examples of best practices—recognizing that there are few practices that will fi t our needs in every situation or that do not require adaptation. In some settings, even use of the term “best practice” is controversial, due to concern that it seeks to prescribe universal solutions. Given that the practice of incubation in China, France, the United States, and other nations varies based on individual cultures, resources, and needs, we are not so foolish as to suggest such iron rules. And though we still take very seriously the principles and practices approved by NBIA’s board of directors in 1996, we know they must inevitably evolve. But we believe that the managers of the programs presented here have striven for excellence. They have aspired to be more than “good enough.” Far from being prescriptive, the examples here show the creative abundance that has emerged from programs devoted, quite simply, to serving entrepreneurs in the “highest and best” manner possible. It is our hope that—inspired by this volume—readers will incubate hundreds of new ideas and propel their programs into a future that is exemplary of its own time. I am grateful to have participated in this exciting industry for twenty-eight years and have lost not an iota of excitement in anticipating your future successes. Dinah Adkins NBIA PRESIDENT EMERITA vii viii Acknowledgments This book is the result of nearly three years of work by a core group of NBIA staff and NBIA members who collaborated at every stage, from planning through editing. It has been a long, sometimes painful process, but the result is worth it. Deepest thanks go to: ■ Meredith Erlewine, NBIA’s longtime director of ■ Tracy Kitts, NBIA’s vice president and COO, whose publications, who gathered a stellar panel of incubator persistent queries about the book’s progress may managers and consultants to thoroughly revise and have been annoying at times but always kept the update an NBIA Publications classic. Meredith left project at the top of my mind even when other work NBIA in the spring of 2008, but her dogged pursuit of crowded forward. quality continues to inspire her former colleagues. ■ Rick Huard, late of the Ohio University Press, whose ■ Dinah Adkins, NBIA’s president emerita, whose sharp copyediting and proofreading whipped the fi nal unparalleled knowledge of the industry and its manuscript into shape (and prevented many a typo). practitioners was key to identifying the practices and ■ Tina Ullman and Alix Northrup of Ullman Design, who programs to highlight. Dinah also returned to her roots patiently endured multiple rounds of changes and still as a reporter to investigate and write about many of the made a gorgeous book. specifi c practices that follow. Thanks also go to David Monkman, NBIA’s new president ■ Chuck Wolfe, of Claggett Wolfe Associates, and and CEO, who came along as the BPIA whirlwind was Karl LaPan, president and CEO of the Northeast Indiana reaching its climax and remained unfazed. I look forward to Innovation Center, not only served on the book’s producing more books under David’s tenure. steering committee but also traveled around the United States and beyond to check out best practice programs The book revision would not have been possible without and write about them. Special thanks go to the support from two old friends. The Maryland Technology Foellinger Foundation, which funded LaPan’s travels. Development Corporation, which underwrote the original ■ David Terry, executive director of the West Texas A&M BPIA, again offered its fi nancial support for the book’s University Enterprise Network, provided not only his production. Likewise, Chuck Wolfe—a coauthor of the insights but also his Texas twang and sense of humor to original edition—provided funding as well as his time and long steering committee conference calls. talent. NBIA is deeply grateful to both of these longtime supporters for their continued generosity and faith. ■ Jasper Welch, director of the San Juan College Enterprise Center, and Joel Wiggins, president and Finally, thanks go to the dozens of NBIA members who CEO of the Enterprise Center of Johnson County, submitted proposals for inclusion in the book; who agreed to read early drafts of the chapters and provided both repeated rounds of interviews; and who answered my calls their points of view and a number