Document Sample

   Research Park II
   Texas A&M
   Addendum to Business Plan & Case Studies
   Texas A&M University has an opportunity to catch up to campuses across the
   United States where student business incubators, accelerators and co-working
   spaces have been established and proven successful. This Addendum to the
   Management 489 Business Plan for the Student Business Accelerator on campus
   contains industry research on best practices of incubators and accelerators
   supported by municipalities, private industry and higher education. Case Studies
   of student business incubators, accelerators or co-working spaces at U.S.
   campuses and internationally supports the overarching recommendations
   contained in the Business Plan and herein. With a Fall 2012 soft-launch of the
   Student Business Accelerator, Texas A&M has an opportunity to jumpstart a
   campus culture of entrepreneurship, innovation and creativity while setting a
   higher global standard for successful student business accelerators and taking the
   lead internationally in providing experiential education for Texas A&M students.
   This initiative also supports Texas A&M’s Core Values, as well as the University’s
   education and global service missions. Additionally, the Student Business
   Accelerator supports the mission of Research Park and the BioCorridor on west
   and east campuses, enhancing both the tenant mix and Texas A&M University’s
   responsibility as a leader in economic development at state and local levels. The
   Student Business Accelerator further supports goals of The Texas A&M University
   System’s Division of Research and the Office of Technology Commercialization.

                  BUSINESS PLAN ADDENDUM | Best Practices Guide

                                               BUSINESS PLAN ADDENDUM


Once the Bayh-Dole Act was enacted by the U.S. Congress in 1980, academic institutions were
free to commercialize intellectual property and inventions created with federal research dollars.
As a result, universities raced to launch business incubators in order to monetize research and
transfer technologies from the laboratory to the marketplace. And, it’s no big wonder why. In
September 2008, based on a 2006 survey of nearly 200 universities by the Association of
University Technology Managers, Forbes reported that research-related income generated as a
result of university-patented IP and licensing revenues grossed a whopping $1.5 billion— an
increase of $500 million since 2002 and even more impressive when compared to the 1992 total
of $172 million. The ripple effect for communities where these 189 universities from the survey
are located meant more jobs and interest from companies wanting to locate where incubators are
operated and managed by universities.

Universities that go into the incubator business reap significant returns on their investments, but
often times the ROI is not monetary-- instead taking the shape of more hands-on educational
opportunities for students. Per the National Business Incubator Association, “Town and Gown”
benefit from better employment opportunities and economic development in communities where
universities have launched campus incubators because out-of-town businesses are attracted to
communities with the resources to promote new business incubation; and local businesses are
retained when there is a strong entrepreneurship support system.1 Aside from the image that
universities and host communities present to the private business sector from an economic
development viewpoint, there is also public perception to consider. According to NBIA’s market
studies, the public perception is that universities with a business incubator are less of a drain on
taxpayer resources and more of a self-sustaining, economic development engine. The university
with an incubator is seen by legislators as driving recovery rather than draining state coffers. 2

Global economic recovery is expected to rely on small business growth worldwide, prompting
more U.S. universities to encourage entrepreneurship among students and faculty. Universities
are increasingly offering degree programs in entrepreneurship and expanded courses in
entrepreneurship, while investing more resources into development of business accelerators as
learning labs for teaching technology commercialization and entrepreneurship. Nationwide,
universities are interested in accelerating startups by students and faculty because, in
communities where universities launched accelerators and engaged in transferring technology to
market, there are more job opportunities and increased tax revenues. Thus, educational
institutions are now de facto economic development agencies in communities where these
universities and colleges are the area’s largest employers.

    A Comprehensive Guide to Business Incubation/NBIA Publication
    A Comprehensive Guide to Business Incubation/NBIA Publication
                                                        BUSINESS PLAN ADDENDUM | Best Practices Guide

According to research cited in INCUBATING SUCCESS: Incubation Best Practices That Lead
To Successful New Ventures, issued in 2011 by the U.S. Department of Commerce Economic
Development Administration (EDA)3, business incubators have been around for more than five
decades-- helping entrepreneurs to create new jobs and wealth. Business incubation programs
accelerate development of start-up ventures by providing resources and support for new business
owners— more commonly referred to by the industry as ecosystems for entrepreneurs.

The Batavia Industrial Center in New York, opened in 1959 by Joe Mancuso, is officially
recognized as “America’s Original Business Incubator”. The BIC is still operating today under
the auspices of the Mancuso Business Development Group. Since then, approximately 1,400
business incubators have opened in North America with more than 1,200 located in the U.S.
Approximately 7,000 incubation programs are now in operation around the world per NBIA.

In November 2011, the U.S. Department of Commerce Economic Development Administration
(EDA) funded research to study the relationship between incubator best practices and outcomes.
The study was jointly conducted by The University of Michigan’s Institute for Research on
Labor, Employment and the Economy; The State University of New York at Albany; the
National Business Incubation Association and a private firm called Cybergroup, Inc.

A by-product of the research resulted in a convenient web-based tool for incubation and
accelerator practitioners to measure their respective facility’s performance compared with
industry best practices. The tool also provides feedback on ways to improve performance of
accelerators and incubators.4 To be accepted into the study, incubation programs had to have
been in operation for at least five years and also were required to offer at least five services that
are common to most incubators. As determined through a seven-step validation process, 378
business incubator managers whose programs met the study’s minimum requirements were
invited to respond to an online survey over a period of six months in 2010. The research team
evaluated 116 responses, which yielded 111 valid responses and a 29.5% effective response rate.

The research team organized U.S. business incubation programs into two categories: industry
and metropolitan. More than 80 percent of survey respondents were from mixed-use (41.7%) or
technology (39.1%) incubators. The research team for this study decided to organize U.S. The
National Business Incubation Association has defined the most common industry segments as:
      Mixed-use
      Technology
      Service
      Manufacturing
      Other


                                                      BUSINESS PLAN ADDENDUM | Best Practices Guide
For their study, researchers considered regional characteristics that may influence the success of
failure of incubation programs. All states except Alaska and Nevada fit the criteria established by
researchers for the purpose of their study. To be included in the study, incubators had to offer at
least five of the most basic incubator services:
     Access to capital for clients
     Basic business help for clients
     Marketing assistance for clients
     Networking activities for clients
     Accounting/finance help for clients
     Linkages to higher education or strategic partners

Final analysis of qualitative and empirical data concluded that business incubation practices are
more important to an incubator’s overall success than the maturity of the program, the size of the
incubator or the host region’s capacity for entrepreneurship and innovation.

                         “With fundamental transitions occurring in the U.S. economy,
                  government officials and others recognize that the new economy must
                  feature innovation, entrepreneurship, technology commercialization,
                     new venture creation, and business incubation and acceleration as
                      fundamental elements…the findings from this study suggest that
                    business incubation positively influences entrepreneurial success.”


Business incubators and accelerators that are supported by colleges and universities tend to
follow three basic operating models.

      University-owned and operated incubation programs which are operated as a division
       with a university department or which functions as a separate entity under the
       university’s jurisdiction and oversight, subject to the university’s policy and procedures.

      Independently-owned incubation programs which are independently operated
       under formal partnership agreements with universities, generally with university
       representation on the entity’s board of directors and involving some source of university
       funding or, if state-supported, some state funding in support of the program.

      Incubation programs that are completely independent of any university but which
       maintain an informal relationship with a university, generally in the same host
       community as the incubation program.

                                       BUSINESS PLAN ADDENDUM | Best Practices Guide

The U.S. Department of Commerce Economic Development Administration (EDA) was
established under the Public Works and Economic Development Act of 1965 to generate jobs, to
help retain existing jobs and to help stimulate industrial and commercial growth for
economically-depressed areas across the nation. The EDA commissioned a joint study of U.S.
incubation programs that was conducted by The University of Michigan’s Institute for Research
on Labor, Employment and the Economy; The State University of New York at Albany; the
National Business Incubation Association and Cybergroup, Inc. as part of the ground-breaking
INCUBATING SUCCESS: Incubation Best Practices That Lead To Successful New Ventures.
Those key findings resulted in the following determinants, paraphrased from Incubating Success:

      No single incubator practice, policy or service guarantees success for an incubator.
       Instead, it is the synergy among multiple practices, policies, and services that produces
       optimal outcomes. There is no “magic bullet.” The needs of incubator clients vary
       depending on their level of development, industry sector, and management skills.

      Top-performing incubation programs often share common management practices.
       Practices most represented among high-achieving programs are:
           Having a written mission statement
           Selecting clients on cultural fit
           Selecting clients based on potential for success
           Reviewing client needs at entry
           Showcasing clients to the community and potential funders
           Having a robust payment plan for rents and service fees

       All of these practices are highly correlated with client success. Conversely, those
       incubators with no exit policies or relaxed graduation requirements resulted in less-than-
       optimal performance overall.

      Incubator advisory board composition matters. Having an incubator graduate as well
       as a technology and a technology transfer specialist on an incubator’s advisory board
       correlates with sustainable success. Having professionals with accounting, intellectual
       property (patent assistance) and legal expertise on an incubator’s advisory board often
       results in better performance for incubators. The study found that government and
       economic development agency representatives play key roles in enhancing client firm
       performance, since their presence ensures that the incubator is embedded in the
       community. Local government and economic development officials also help to educate
       critical funding sources about the incubation program and its success stories.

      Neither the size nor the age of an incubator is strong predictors of a client firm’s
       long-term success. Many incubator funders and practitioners assume that the size and
       age of an incubator are key determinants of client firm success. This study concluded that
       it is the incubator’s programming and management which matter most.
                                      BUSINESS PLAN ADDENDUM | Best Practices Guide
   High-achieving incubators collect outcome data more frequently and longer.
    Overall, 66.7% of top-performing incubators collected outcome data. Collected data
    includes client and graduate firm revenues and employment; and firm graduation and
    survival rates. Collecting outcome data demonstrates a positive return on investment and
    ensures continued program funding, leading to a situation where success breeds success.

   Most high-achieving incubators are not-for-profit, as were 93% of the respondents.
    Only one top-performing incubator in this study was for-profit, suggesting that incubators
    focused on profits do not correlate to client success. Instead, the most important goals of
    top-performing incubation programs are creating jobs and fostering the entrepreneurial
    climate in the community; diversifying the local economy; accelerating new businesses
    or industries; and attracting or retaining businesses to the host region.

   Public sector support contributes to program success. The study found just three
    top-performing incubators operated without public sector support from local government
    agencies; economic development groups; colleges or universities; or sponsors. On
    average, nearly 60% of an incubator’s budget comes from client rent and service fees.
    This research suggests public sector investment contributes to greater incubator outcomes
    in terms of new jobs, graduation rates and economic impact.

   Incubators with large budgets outperformed incubators with budget constraints.
    Programs with more financial resources have more capacity to deliver critical client
    services and are more stable. The study found that incubators receiving more revenues
    from rent and service fees performed better than other programs. On the expenditure
    side, the more incubators invested in staffing and program delivery – relative to building
    maintenance or debt servicing – the higher the probability of improved client outcomes.

   Measures of growth or size of a host region’s economy are poor predictors of
    incubation program outcomes. Incubator management practices are better predictors
    of incubator performance than the size or growth of the region’s employment or Gross
    Domestic Product.

   Collective measures of a region’s capacity to support entrepreneurship had limited
    effect on incubation program outcomes. Among regional capacity measures studied,
    only the proxies for urbanization, work force skills, availability of locally-controlled
    capital, and higher educational attainment had a moderate influence on client outcomes.

   The findings provide empirical evidence that business incubation best practices
    are positively correlated to incubator success. Specifically, practices related to the
    composition of advisory boards, hiring qualified staffs that spend sufficient time with
    clients, and tracking incubator outcomes resulted in more successful incubation
    programs, clients, and graduates. In addition to key findings, the report included a
    bulleted “Discover” section which identified and condensed which program goals,
    management practices, services, operational structure, advisory board composition and
    other incubator activities contributed most to client success:

                                    BUSINESS PLAN ADDENDUM | Best Practices Guide
   Important Program Goals
     Job Creation
     Fostering entrepreneurial climate in the community

   Other Key Goals
     Diversifying the local economy
     Building or accelerating new industries/business
     Attracting or accelerating new business in the host region

   Management Practices
     Written mission statement
     Written marketing plan
     Financial sustainability or have a plan for achieving financial sustainability
     Review clients’ needs at entry
     Develop effective entry and exit criteria
     Select clients based on cultural fit and potential for success
     Showcase clients to the community and potential funders
     Provide pre- and post- incubation services
     Collect outcome data for an extended period of time
     Conduct periodic reviews of budget, service providers and other program activities

   Services
     Business basics
     Presentation and business etiquette
     Managing a new enterprise
     Investment capital
     Accounting services
     E-commerce assistance
     Networking and marketing assistance
     Regular engagement with incubator manager(s)
     Strong mentor programs, such as shadow boards, loaned executives, etc.
     Strong supportive relationships with local area higher education institution(s)
     Production assistance and product development, from R&D and prototyping, through
       to engineering production systems
     Administrative services and office equipment
     High-speed broadband Internet

   Operational Structure
     Non-profit model

   Budgets and Finances
     Robust payment plan for rent and service fees
     The majority of revenue—not all—comes from client rents and service fees
     Larger budgets that allow the programs to deliver critical services
     Some level of incubator subsidies
                                   BUSINESS PLAN ADDENDUM | Best Practices Guide
   Staffing
     Smaller staff-to-client ratios
     Competent staff with sufficient resources – including time – to deliver key services
     Solid investment in staffing and program delivery

   Advisory Board Composition - 8 to 20 individuals
     Incubator graduate firm
     Technology transfer specialist
     Experienced entrepreneur
     Professional accountant
     Intellectual property (patent assistance) and general legal experts
     Government/political official
     Economic development agency representative
     Corporate executive
     Representative of the financial community
     University official
     Chamber of Commerce representative

   Other Expertise That Can Play an Important Role
     Marketing professional
     Production engineering specialist
     State economic development official
     Incubator manager
     Real estate manager/developer

   Limited Effect on Success
     Size of an incubator facility
     Age of incubation program
     Regional economic conditions
     Lead organization

   Fast Facts on the Incubator Industry from Incubating Success:
       On average, incubation programs that had been operating five years or more had:
             17 resident clients
             32 affiliate clients
             55 graduates
       Incubator firms generated approximately $18.7 billion in total revenues in 2008
       Incubation programs produce approximately four graduates per year, translating into
        approximately 21-22 new graduate firms over a five-year period.

       The average five-year survival rate for incubator graduates is 75%.

                                    BUSINESS PLAN ADDENDUM | Best Practices Guide

As a result of the EDA-commissioned Incubating Success and resulting determinants, the EDA
developed these policy recommendations for publically-funded incubation programs:

     Incubation programs that receive public funding should be required to implement
      industry best practices. Stakeholders (see “primary stakeholders”) should ensure the
      incubators have money they need to provide the entrepreneurial support services
      demonstrated to catalyze client success. Although most incubators aim to maximize the
      amount of money they bring in through client rent and service fees, many continue to
      need subsidies to fund operations. Of the top-performing incubation programs identified
      in this study, five reported operating subsidies that exceeded 53% of their revenue
      stream. In fact, only three of the top-performing programs in this study do not receive
      operating subsidies. To keep costs down, incubation programs can leverage existing
      institutional resources, such as Small Business Development Centers or higher education
      institutions, for the delivery of critical services. For example, an incubator could partner
      with a business school to bring in graduate students to help with market research for
      clients or require that firms attend specific training sessions offered by the local SBDC.

     Funding agencies should require publicly funded incubation programs to collect
      outcome data to monitor the impact of public investments. Recommended measures
      include jobs created by incubator clients and graduates, client and graduate revenues,
      annual number of graduates, survival rate of graduate firms, and retention of graduates in
      the incubator’s host region. Tracking these figures over time can ensure that the incubator
      is helping to build firms that create jobs, spark economic growth, etc.

     External, independent evaluators should conduct periodic assessments of business
      incubation programs receiving public support. A nationwide database of incubation
      programs, which validates that each program meets the minimum criteria used in this
      study, should be further developed and maintained. The data set – which should be made
      available online for public use – should include incubation program characteristics, as
      well as area(s) of expertise. To encourage incubators to provide current information for
      the database, public funding agencies could tie incubator funding to registration. For
      example, to receive public funding, incubation programs could be required to complete a
      short survey that covers incubator demographics (e.g., incubator size, age, etc.) and
      program attributes that ensure the entity is an incubator (e.g., works with early stage
      companies, sets entrance and exit criteria, provides key business assistance services, etc.).

     Programs receiving public support should be required to submit annual reports to
      their public funding source, so funders can monitor progress toward funding goals.
      These reports should include periodic independent audits. By reviewing data annually,
      public agencies continually evaluate public investments in business incubators, ensuring
      that funded programs are implementing best practices known to contribute to program
      and client success, and identifying industry trends that could affect program performance.

                                      BUSINESS PLAN ADDENDUM | Best Practices Guide

In addition to EDA policy recommendations for best practices of the incubation industry, the
EDA endorsed benchmarks for successful incubation programs as listed in Incubating Success:
       Incubation advisory boards should include diverse expertise.
        These boards help develop quality business assistance services for the incubation
program, embed the program in the broader community, market the incubator, and provide
effective program oversight. The evidence in this study suggests that advisory boards should
have between eight and 20 individuals. The study recommends the following professionals:
              Graduate Firm (successful former client)
              Experienced Entrepreneur
              Local Economic Development Official
              Corporate CEO/President
              Equity Investor (representative of the corporate finance community)
              Business Counsel (attorney specializing in intellectual capital protection)
              University Administrator
              Chamber of Commerce Representative
Other expertise that can play an important role in an incubation program – but that vary by
incubator type and other local conditions – are marketing professional, production engineering
specialist, local elected official, state economic development official, tech transfer specialist,
incubator manager, and real estate manager/developer.
      Incubator management and stakeholders should periodically assess services offered.
       Services that are statistically significantly related to client firm performance include:
           providing entrepreneurial training (business basics, managing startups, etc.);
           offering access to investment capital;
           securing strong supportive relationships
           with local area higher education institution(s); (4) providing production assistance
           (from R&D and prototyping to engineering production systems); and
           developing strong mentors, including shadow boards and loaned executives.
           In addition, incubation programs should not overlook the obvious services needed
           by start-up businesses and provide high-speed broadband Internet access, shared
           administrative services, office equipment, presentation and business etiquette
      As with any enterprise, having a competent staff with sufficient resources –
       including time – to effectively deliver key services is paramount.
       Full-time staff should be on-site and adhere to the following management practices:
            collecting outcome data;
            providing pre- / post- incubation services;
            conducting periodic reviews of the
            budget, service providers, and other program activities;
            showcasing clients and otherwise marketing the program; and
            developing effective entry and exit
            criteria for the incubator.
                                       BUSINESS PLAN ADDENDUM | Best Practices Guide
      Incubation practitioners should evaluate incubation programs periodically through
       different, but interdependent, analysis:
       (1) Client firm performance (outcome analysis), measured by proxies (survival rates,
       jobs created, revenues, taxes paid, intellectual property created, etc.), is the first level of
       program evaluation. While data collection should occur at least annually, the analysis can
       be conducted every 3-5 years.
       (2) Analysis of incubator processes should be conducted more frequently and cover a
       wider variety of systems. Services offered, advisory board composition, service
       providers, budgets, entry/exit criteria, and program effectiveness should be reviewed
       periodically, although some more often than others.


EDA has developed Best Practices for incubators (paraphrased here from Incubating Success):
      Common Characteristics of Successful Incubation Programs
A best practice incubation program should be operated as a business itself. It has a mission,
goals, objectives, strategies, payroll, staff, cash flow, and most other business characteristics.
The incubator, therefore, is a business that helps to create and nurture new businesses. Common
characteristics of top 49 U.S incubation programs, per the EDA’s Incubating Success, include:
    Almost all (48) were not-for-profit; only one was a for-profit model.
    Incubator size ranged from 4,000 square feet to nearly 1 million square feet.
    Incubators ranged in age from 7-50+ years (Batavia Industrial Center in Batavia, N.Y.).
    The size of incubator advisory boards ranged from 0-30 members; mode: 12, mean: 10.5.
    The most important goals for incubators are job creation (4.60 out of 5) and fostering a
       community climate of entrepreneurship (4.65).
    Other key incubator goals were diversifying the local economy (4.20), or accelerating
       new industries/businesses (4.14), and attracting or retaining businesses to the host region
       (4.02). 8) Incubator budgets ranged from revenues of $33,000 with expenses of $17,000
       to $2.8 million in revenue with $2.5 million in expenses.
    Only three programs supported operations through rent and service fees. The average
       amount of revenue received through rent and service fees was 58.7%. One program
       received 100% of funding from operations, with no revenue from rent or service fees.
    Services that all top-performing incubators provided included:
               Help with business basics & accounting
               Shared administration/equipment
               High-speed broadband Internet & E-commerce assistance
               Networking activities among clients
               Marketing assistance
               Human resource training
               Comprehensive business training
               Help with business etiquette & presentation skills training
                                        BUSINESS PLAN ADDENDUM | Best Practices Guide
           Services that only one to three top-performers did not provide include:
                  General legal services
                  Access to educational resources
                  Logistics support
                  Help identifying management team members
                  Shadow boards
                  Access to venture capital
                  Access to commercial loans
                  Access to noncommercial loans
                  Intellectual property protection
                  Technology commercialization
                  Customer relations training
                  Links to strategic partners
                  Help with regulatory compliance
                  Federal procurement assistance

           Management practices most represented among top-performing incubators:
                 Has a written mission statement 92%
                 Selects clients based on cultural fit 92%
                     Stakeholders/sponsors support mission/goals 98%
                     Showcases clients to community 92%
                     Offers robust payment plan for rent/service fees 94%


In the mid-1980s, most research into business incubators tried to define how incubation
programs should be operated. By the early 1990s, the focus had shifted to identifying industry
“best practices”. This was primarily achieved by conducting case studies of successful business
incubators. In the New Millennium, industry analysts began to research whether business
incubation provided value-added contributions to client firms that resulted in positive outcomes,
more jobs or other economic development benefits. Certain industry trends began to emerge.

A business incubator’s mission is to produce successful firms that graduate from the program as
sustainable enterprises.5 A business incubator is defined as a multi-tenant facility with on-site
management that directs a business incubation program and provides clients with access to
discounted or free office space, flexible leases, shared basic business services and equipment,
technology support and access to capital resources for growth. Business incubation programs
may also offer business services for virtual clients who are not incubated in traditional facilities.

    U.S. Department of Commerce Economic Development Administration (EDA)
                                                      BUSINESS PLAN ADDENDUM | Best Practices Guide
       Current Trends in Incubation
Incubator industry observers documented the industry’s maturation and growth. As the number
of technology incubation programs in the United States has grown, so has academic interest in
technology commercialization and the potential for new venture creation. In a study of the
relationship between business incubation and technology transfer, research showed the economic
strategy of university-based technology incubators and a connection between stakeholders. 6
Another study of university-sponsored business incubators in the United States explored such
performance metrics as organizational design, client performance, funding sources, targeted
technologies, strategic operational policies, services and their value-added component and
growth of client firms.7 This research found that university-sponsored technology incubators
have a positive effect on client survival and growth, as measured by jobs and sales. In another
study, academics examined linkages between incubation programs and higher education—
resulting in an incubation model that was described as a “ladder of incubation”.8
Further research suggests that universities become more entrepreneurial and encourage the
entrepreneurial spirit within students. Research suggests that one way to accomplish these goals
is by establishing professorships to advance an entrepreneurial culture within the institution and
with graduates. 9 The study notes that to be successful, these efforts need sufficient funding,
management and leadership to be committed within the program. U.S. higher education is fertile
ground for establishing entrepreneurship-focused curricula, programs and campus facilities.
Community colleges are increasingly stepping into lead roles in their host communities to
establish entrepreneurship-related programs and business incubation facilities. Academic
research describes how a community college transformed an abandoned industrial facility into a
business incubator, resulting in millions of dollars of revenue for the local economy. 10 The
program reportedly created hundreds of jobs, millions of dollars in payroll, increased purchasing
power in the region, resulted in tax benefits for local jurisdictions and increases in net asset
valuation, and more new venture creation. Academics surveyed business incubator managers and
clients.11 Most of the authors’ conclusions were consistent with previous incubation research, but
found less incubation-related momentum in two-year colleges, but more diversity among clients.
       Economic Development Theory
Per NBIA, business incubation is an important economic development tool that – when
conducted in accordance with best practices and based on due diligence – can spur job creation,
create wealth and contribute to the national economy. Enterprise development is growing in
popularity as an approach to community economic development. Community goals are to create
wealth for owners and employees by helping entrepreneurs start and grow businesses. Previous
research by a variety of academics has determined that enterprise development is more
sustainable, more cost-effective, and more aligned with community development than its sister
economic development strategies of business attraction and business retention/expansion.12

  Ventriss and Gurdon (2006)
  Mian (1994)
  Voisey, Gornall, Jones, and Thomas (2005)
  Schulte (2004)
   McCabe (2005)
   Hernandez-Gantes, Sorensen, and Nieri (1996)
   Harrison and Kanter (1978); Dabson, Rist and
                                                  BUSINESS PLAN ADDENDUM | Best Practices Guide
       Regional Program Development
Most business incubation programs target individuals with strong community ties. Through the
qualitative analysis of various rural entrepreneurs, researchers examined “community
embeddedness” and the role this played on the creation and operation of businesses. Being
socially embedded allowed entrepreneurs to understand the local business structure and be
involved. It helped small business owners use local resources for a competitive advantage.


In addition to the EDA’s Incubating Success, various National Business Incubator Association
(NBIA) publications were reviewed for best practices, cited in this section of the Business Plan.
According to the NBIA, two principles characterize effective business incubators::

            The incubator aspires to have a positive impact on its host community’s economic health
             by maximizing the success of emerging ventures.

            The incubator is a dynamic model of a sustainable, efficient business operation.

Model business incubation programs are distinguished by a commitment to incorporate the
industry’s best practices. Per the NBIA, management and boards of incubators should:
      Commit to the two core principles (above) of business incubation.
      Obtain consensus on a mission that defines the incubator’s role in the community and
       develop a strategic plan with quantifiable objectives to achieve the incubator’s mission.
      Structure for financial sustainability by creating and implementing realistic business plan.
      Recruit and appropriately compensate management capable of achieving the mission of
       the incubator and having the skills to help companies be sustainable.
      Build an effective board of directors committed to the incubators’ mission and
       maximizing management’s role.
      Develop an incubator facility, resources, methods and tools that contribute to the
       effective delivery of business assistance to client firms and that address the
       developmental needs of each company.
      Seek to integrate the incubator and its programs into the community and broad economic
       development goals.
      Develop shareholder support, including a resource network that helps the incubator’s
       client companies and supports the incubator’s mission.
      Develop stakeholder support, including a resource network, to help incubator’s clients
       and supports the incubator’s mission and operations.
      Maintain a management information system to collect data for ongoing program
       evaluation, thus improving a program’s effectiveness and letting it evolve with clients.13

     Schweke (1996); and Lyons and Hamlin (1991)
     NBIA Growing New Ventures, Creating New Jobs; Principles and Practices of Successful Business Incubation by Rice and Matthews (1995)
                                                         BUSINESS PLAN ADDENDUM | Best Practices Guide

Business incubators, accelerators and co-working spaces rely on low-rent or no-rent facilities in
the say regard as incubator clients need affordable or free office space. An incubator’s facility is
an important component of the strategic plan for an incubator. The European Commission found
that, “the provision of workspace is central to the incubator model. Standard practices now exist
with regard to the most appropriate configuration of incubator space.”14 The European
Commission recommended determining the size of the incubator structure, the profile of the type
of companies to be incubated and the ideal infrastructure needed for success. Once an
incubator’s niche is identified, it is important to visit operating incubators with similar
characteristics. These visits serve to help:
     Determine the ideal size of an incubator
     Establish the architecture of incubator workspaces
     Ascertain how many workspaces are required
     See the typical size of each workspace
     Decide on basics like telephone and internet connections, etc.

“The right building can provide the basis for the financial self-sustainability of the
incubator and an environment in which the entrepreneurs and incubator staff can
work together to grow new businesses. The wrong building can lead to failure…” 15

Common questions to ask when deciding if a facility will make a sustainable incubator include:
   Does it meet size requirements of financial model to enable incubator sustainability?
   Does it require minimal renovation?
   Are there any environmental hazards
   Can the facility be easily maintained?
   How much will it cost to operate?
   Can walls be moved and spaces reconfigured?
   Are there enough common areas? (conference rooms, library, kitchen, service center)
   Is the incubator building and location safe/secure so entrepreneurs can work day or night?
   Is there adequate parking?

Division of Research at Texas A&M University
The Division of Research at Texas A&M University has offered 4,704 Square Feet of Class A
office space for a student business accelerator, rent-free through 2013. This space is the perfect
location for this purpose, based on criteria posed above by the European Commission. The
Caldwell Building is located on Texas A&M’s shuttle bus route and offers free parking. The rear
of the building has card-swipe access with parking, allowing students to enter the building
without disturbing tenants. This entrance may be gated off from the rest of the building at night.

     Final Report Benchmarking of Business Incubators (2002)
     Rice & Matthews in Growing New Ventures, Creating New Jobs (1995)
                                                       BUSINESS PLAN ADDENDUM | Best Practices Guide
Constructed in 1982, Research Park consists of 350 acres located on Texas A&M University’s
west campus adjacent to the George H.W. Bush Presidential Library and Annenberg Conference
Center and across from Easterwood Airport. Companies may lease space in multi-tenant
buildings or build new. Research Park has 33 acres of long-term lease building sites available.

                                  CALDWELL BUILDING

                                      BUSINESS PLAN ADDENDUM | Best Practices Guide

Built in 2002 at 1700 Research Parkway in Research Park II, the Caldwell Building features:
    A total of 67,316 sq. feet of Class A office space with a Grade 1 loading dock
    Six acres of landscaped property surrounding the facility
    Use of fiber optic links with network and telecommunications support
    Use of Trans-Texas Videoconference Network (TTVN) at normal tenant rate
    Use of university recreational facilities at normal tenant rate (non-student tenants)
    Membership in University Club for principal officers of tenant companies
    Use of university food services for seminars and conferences
    Free university transportation system (on shuttle bus route) and free parking for tenants
    Located in a deed-restricted park of west campus with such amenities as landscaped
        sidewalks and water falls (near Annenberg convention center and Easterwood Airport)16


                                                       BUSINESS PLAN ADDENDUM | Best Practices Guide

The Student Business Accelerator will be located on the first floor of the Caldwell Building in
4,704 square feet of Class A Office Space, shown above. Additional space is available across the
hall of the Student Business Accelerator in 5,394 square feet of space now occupied by Caldwell
Companies. This space also currently includes one institutional tenant — CIDESI of Mexico.

Per David Guerra Zubiaga, PhD, director of CIDESI-Texas, the Division of Research has agreed
to allow CIDESI to be a tenant in a spillover area adjacent to the Student Business Accelerator.
This space is designed to compliment the Student Business Accelerator with professional
support. Additionally, the Aggie Angel Network, Inc. will open a second office in this space with
CIDESI to provide seed money for startup clients served by the Student Business Accelerator.
This leaves sufficient space for other complimentary service providers and strategic alliances for
the Student Business Accelerator, including legal, accounting, marketing and web services. The
Research Valley Partnership and Office of Technology Commercialization is also nearby.

                          CENTEQ LAKE AT RESEARCH PARK
                                       BUSINESS PLAN ADDENDUM | Best Practices Guide


There are synergies between the Student Business Accelerator and how Texas A&M University
is marketing the Research Valley’s One Health Plus BioCorridor. Both the BioCorridor and the
Student Business Accelerator seek to help create an entrepreneurial ecosystem that encourages
collaboration between scientists, clinicians, students, industry partners, community residents and
local government in order to promote innovation and education-- while at the same time
accelerating regional economic growth. A Student Business Accelerator at Research Park within
the BioCorridor contributes to this “perfect storm” or ideal marketing mix by supporting the
Research Park’s economic development objectives as part of Texas A&M’s overall educational
and global service missions. Indeed, the Student Business Accelerator serves as a catalyst for
helping Texas A&M University realize its mission of leading innovation and educating taxpayers
about the need to support and fund university research.

The Research Valley’s One Health Plus BioCorridor is situated on a 3,500-acre tract of land,
located directly across from Research Park I and II on Raymond Stotzer Parkway. The tract
extends west to Highway 47 and north to Villa Maria Rd. and FM 2818, encompassing the Texas
A&M Health Science Center and a private residential golf community called Traditions Club.
William Cole, developer of Traditions Club, owns 350 undeveloped acres in the BioCorridor.
This land is being rezoned from residential to commercial for mixed-use development.

                                       BUSINESS PLAN ADDENDUM | Best Practices Guide

The concept master plan for the One Health Plus BioCorridor depends on collaboration between
university and system entities, local governments and the owners of Traditions Club. Alignment
of the Student Business Accelerator’s Vision with that of the Division of Research and Texas
A&M University is critically important. Moreover, the Student Business Accelerator should
reach out to students focusing on life science studies and research, given Texas A&M
University’s investment in infrastructure and faculty for interdisciplinary life sciences research.

       2011 Research Valley Biocorridor Master Plan

Prepared by Broaddus Planning of Fort Worth, the Research Valley Biocorridor Master Plan was
commissioned by the Research Valley Partnership, Inc. with funding assistance provided by
Texas A&M University and The Texas A&M University System. The 69-page report was
released in January 2011 after private and public sector stakeholder meetings with more than 300
community leaders in Bryan-College Station and administrators with Texas A&M University, as
well as with Blinn College-Bryan. As a result of the report, the Research Valley BioCorridor is
now being promoted as the One Health Plus BioCorridor, but the basic economic development
objectives of this real estate project’s mission remains the same. Seven Guiding Principles were
also articulated in the report as the stakeholders’ vision or philosophy for the BioCorridor
project. The Seven Guiding Principles parallel various reasons for expediting the launch of a
Student Business Accelerator at Texas A&M University:

       “Do it for the greater good. Share the Vision, the Responsibility and the Benefits.”

“Think Longevity, think Sustainability… and Act Now.”

              “Insure a straightforward, consistent and equitable development process.”

“Enable scalable, graduated and flexible solutions.
Supports small business and small R&D operations.”

        “Accentuate competitive advantage. Funding. Affiliation with the University
              System, University and Health Science Center. Dynamic environment.”

“Build upon existing regional assets and character. Build the Brand.
Retaining the Best and the Brightest...they are already here!”

               “Foster an environment of collaboration and interdisciplinary exchange.
       Partner with Industry…Place-making is key to attracting knowledge workers.”

                                       BUSINESS PLAN ADDENDUM | Best Practices Guide
Central to the BioCorridor Vision is the creation of a mixed-use development and entertainment
district or a New Urban Village within the campus community to include housing and retail.
Without this setting to attract knowledge workers, the brain-drain of highly-educated college
graduates to more metropolitan areas will continue unabated. By the same token, without a place
for trial and error, collaboration and mentoring, Texas A&M University students are missing out
on experiential learning opportunities enjoyed by their counterparts at universities and colleges
across the country and overseas. With Texas A&M University’s status as a leader in education
and research, the institution needs a cross-disciplined, student-centric business accelerator to
hold onto that leadership position and, more importantly, to fulfill an institutional obligation to
Texas A&M University students who expect a first-rate education and leadership experience.

      2011 Town Center Plan

The Town Center essentially speaks to the demographic served by Texas A&M University, those
students who would typically graduate – then move to an urban development or metropolitan
area. The current trend in real estate is for people to live, work and play in the same community
and for these communities to be modeled after New Urbanism principle: eco-friendly building
standards that preserve the environment, a variety of entertainment and restaurant options, close
proximity to schools and retail, bike trails, smart car charging stations and recreational facilities.
The Town Center should stem the historical problem with successful student-led startups in
Aggieland, wherein founders graduate from Texas A&M University and take their success or
potential for future success with them. Texas A&M University’s investment in students is not
fully realized when they leave Aggieland. Some alums — as few as 3 percent of a demographic
group that numbers nearly 500,000 former students, per the Association of Former Students at
Texas A&M University, may donate later… but that distinction still rests with the “Ol’ Aggies.”

Take SnoBall for example. The Aggie Angel Network, Inc., a group of equity investors formed
in 2010 to fund student and faculty start-ups, assisted three Texas A&M University students with
a public stock offering of $2.8 million in the summer of 2011. When the round closed in August,
the start-up relocated from College Station to Austin. The entrepreneurial environment and
skilled Python programmers were in Austin, widely regarded by Aggies and Longhorns as a hub
for creativity and innovation. There is no reason that College Station and Bryan cannot also be
celebrated for creativity and innovation, particularly in the life sciences and other specialty areas
of education that Texas A&M University is widely recognized for already—robotics,
virtualization, computer science, biomedicine, agriculture, oceanography, energy, geology, urban
science, veterinary science and engineering. Furthermore, Mays Business School and the
Institute for Creative Studies offer curriculum which— when made available across disciplines
to all students— can spark innovation in virtually any major and at any level of academic study.

The proposal to build a STEM school for secondary students within the Town Center-- focused
on Biotechnology, Space and Life Sciences-- is also supported by the vision for the Student
Business Accelerator. Youth Entrepreneurship Summer Camps can be held at the Student
Business Accelerator, which could also partner on youth programming with the George H.W.
Bush Presidential Library, located within walking distance of the Student Business Accelerator.

                                         BUSINESS PLAN ADDENDUM | Best Practices Guide

                      BUSINESS PLAN ADDENDUM | Best Practices Guide
            Phase I: 2011 Research Park Assessment

Eva Klein & Associates’ 189-page report17 for the Division of Research at The Texas A&M
University System provided an outsider’s assessment of the current Research Park mission and
marketing with recommendations to be used in a Phase II Business Plan and Phase III
Implementation Plan. Consultants made mention in the Phase I Assessment that mature
businesses previously targeted since Research Park was constructed in 1982 are not necessarily
the primary sources of growth from innovation:

                                               “From the point of view of regional economic development,
                                                     young entrepreneurial companies tend to create jobs.”

The report referred to data from the Kauffman Foundation’s website, chiefly that one-third of the
U.S. GDP is produced by businesses that did not exist 25 years ago. According to the report and
the Kauffman Foundation, net new U.S. job creation over the past 30 years came from firms less
than five years old. A majority of these firms were still operating five years later. While high-
growth entrepreneurial startups that created more than 20 jobs represent fewer than 15 percent of
all startups, these ventures created more than 80 percent of all net new jobs during the 20 years.

According to the Small Business Administration, cited by Eva Klein & Associates in their report,
regions with these types of high growth companies experienced 125 percent more employment
growth; 58 percent more wage growth; and 109 percent more productivity. Interestingly, the
report observed that per a 2011 study by the Intellectual Property Owners Association of the top
300 organizations granted U.S. patents in 2010, only 14 of the patent holders were universities.

With regard to this report’s findings and recommendations, the Student Business Accelerator
dovetails nicely with the “Framework for Regional Stewardship” cited by the report’s authors.
Developed by the American Association of State Colleges and Universities (AASCU), the model
advances the concept of an “Innovation Economy” but makes this model more inclusive by
recommending other stewardship roles for the “modern, outward-focused university” that are
part of “Quality of Place” as referenced in the Phase I Assessment. The Framework for Regional
Stewardship transfers responsibility to the institution for the well-being and quality of life in a
region in which governmental agencies previously fulfilled this role. The framework consists of
four components: Innovative Economy; Social Inclusion; Livable Community; and Collaborative
Government. Much in the same way that the Student Business Accelerator is a collaborative
initiative with various stakeholders and an over-arching mission that includes economic
development and experiential educational opportunities, the modern university is responsible to
constituents for more than research and education. In conclusion, the report recommended:

             “…a plan needs to be developed to more aggressively promote the availability of
                                                     entrepreneurial training to non-business students…”.

     Eva Klein & Associates. Phase I Report: Research Park Assessment – Full Report with Executive Summary (2011)

                                                         BUSINESS PLAN ADDENDUM | Best Practices Guide
          2011 Concept Paper towards the Establishment of The Maroon Accelerator for
           Business Startups at Texas A&M University18

The Mentoring Network for Entrepreneurship (MNE) was formed in 2011 by the Division of
Research as a vehicle for bringing together various faculty stakeholders with a shared interest in
promoting entrepreneurship at Texas A&M University to drive a culture of creativity and
innovation on campus. Dr. Richard Lester with Mays Business School and Rodney Hill with the
College of Architecture are MNE charter members. Both professors prepared a concept paper for
MNE to advocate for the launch of a campus business accelerator. This concept paper was
provided to MGMT 489 students at the start of the Spring 2012 semester for this course.

The paper cites research provided by the IC2 Institute to the Office of Governor Rick Perry that
since its’ founding in 1989 by The University of Texas’s IC2 Institute in Austin, the Austin
Technology Incubator (ATI) has worked with 200+ teams of entrepreneurs who have collectively
raised nearly $750 million in private capital and created thousands of jobs. 19 In the last two years
alone, noted Dr. Hill and Dr. Lester, ATI has helped members raise $40 million in equity capital.

     “It is clear that helping spark and ignite the entrepreneurial fire in students is
     crucial for today’s economy. Further, creating both this physical space and the
resulting innovation culture around TAMU entrepreneurs can be reasonably expected
         to generate economic return directly to the accelerator and the university…”

The professors’ vision for the accelerator is to foster, support and launch Aggie-initiated
businesses of character, integrity and sustainability-- one startup at a time. They concluded that
the mission for a campus accelerator is to foster creativity through support services and physical
space that are both required to encourage new business idea formation and assist those ideas in
becoming reality. Among their recommendations, the professors agreed that providing a home
for student entrepreneurs involved in the multi-disciplined Entrepreneurship Society and also in
Mays Business School’s Aggies In Business (AiB) would help make the campus accelerator
successful. Not mentioned in the concept paper is a new student organization launched this
semester, called the Creativity & Innovation Association (CIA). This organization is also multi-
disciplined and should be invited to also locate in the Student Business Accelerator. There is
enough space in one larger office for tables with two chairs each to serve up to six organizations.

The concept paper recommended that management of the campus accelerator be structured in a
three-tiered format with Deans or their designees participating in governance from each college.
Additionally, the concept paper recommended that the Office of the Provost or a designee and
the Office of the Vice President for Research or a designee also have governance on a
“Governance & Strategic Direction Council” formed to oversee a campus business accelerator.

   A Concept Paper towards the Establishment of The Maroon Accelerator for Business Startups at Texas A&M University. Richard Lester, PhD,
Center for New Ventures and Entrepreneurship, Mays Business School; Rodney Hill, Applied Center for Creativity, College of Architecture
                                                       BUSINESS PLAN ADDENDUM | Best Practices Guide
A separate “Leadership Council” for a campus business accelerator was recommended by the
professors, to be comprised of the a representative from the Vice President of Research (VPR);
the executive director for the Center for New Ventures and Entrepreneurship (CNVE); faculty
members; a representative of the Office of Technology Commercialization (OTC); members of
the Aggie 100 and other business leaders; a representative of the Research Valley Partnership;
and a Governance & Strategic Direction Council appointee. The white paper also recommended
initially that responsibility for a campus business accelerator fall under CNVE’s jurisdiction with
support from the Institute for Applied Creativity (IAC). CNVE would be responsible for creating
and implementing policies and procedures in consultation with the Governance and Leadership
councils. Neither council included student representatives, although Action 2014 funding was
used to mobilize the two teams of students who studied best practices of incubator management.

The concept paper identified two unique sources of potential funding for a business accelerator:
        Sale of Naming Rights
        Client Affinity Paybacks
                                                   DR. RODNEY HILL

             DR. RICHARD LESTER

                                       BUSINESS PLAN ADDENDUM | Best Practices Guide
            2010-2011 Division of Marketing & Communications Strategic Objectives

Texas A&M University’s Vision 2020 long-range strategic operations plan calls for a “culture of
excellence” across campus and in everything associated with the Texas A&M University brand.
This Academic Master Plan, according to the division’s own strategic objectives, is supported by
five major marketing objectives consistent with the imperatives adopted in the Vision 2020 plan:

                 Objective 1: Position Texas A&M as one of the top research universities in the U.S.

                 Objective 2: Promote Texas A&M’s six core values and the University’s unique role
                  in serving the state and country, as well as in developing leaders of character.

                 Objective 3: Ensure Texas A&M’s leadership in social media and new
                  communications mediums to reach key stakeholder groups.

                 Objective 4: Create an environment of collaboration and cooperation with System
                  Communications and the members of The Texas A&M University System.

                 Objective 5: Increase Texas A&M’s brand awareness and associated revenue streams
                  through new partnership and business development opportunities.

The Student Business Accelerator shares every single marketing objective listed above and will
operate consistent with the objectives set forth in Texas A&M University’s Vision 2020 plan.
The Student Business Accelerator can help the Division of Marketing & Communications
achieve its’ marketing objectives by helping to create an environment of collaboration and
cooperation; and by also helping to increase Texas A&M University’s brand awareness and
associated revenue streams.

            Texas A&M University’s Six Core Values & Purpose Statement

Texas A&M University’s six Core Values and Purpose Statement define the mission and vision
for this institution, much in the same way that these same ideals define the Student Business
Accelerator’s purpose. The university’s purpose statement “carries with it the responsibility, the
traditions and the forward thinking of Texas A&M University exemplified by all who are
associated with the university – its faculty and staff, and its’ current and former students.”

Texas A&M University’s Purpose Statement is:

                          “To develop leaders of character dedicated to serving the greater good.” 20

                                                 BUSINESS PLAN ADDENDUM | Best Practices Guide
At the heart of Texas A&M University’s Purpose Statement are six steadfast core values21:

                                                 Excellence - Set the bar.

                                           “Excellence stems from a great sense of
                                      pride in who we are and what we believe in.”
                                 - Former Texas A&M President Dr. Robert Gates

                                           Integrity - Character is destiny.

                                                 The Aggie Code of Honor:
                         Aggies do not lie, cheat or steal nor tolerate those that do.

                                                 Leadership - Follow me.

                      If you don't want to be a leader of character, don't come here.
                             - Former Corps Commandant LTG John Van Alstyne

                                                     BUSINESS PLAN ADDENDUM | Best Practices Guide
                       Loyalty - Acceptance forever.

    Through unity, strength. - Texas A&M University Corps of Cadets Motto

               Respect - We are the Aggies, the Aggies are we.

A&M students aren't just joining a university, they're joining a lifelong family
that understands the value of loyalty, camaraderie, and unconditional support.

                 Selfless Service - How can I be of service?

 If I had to tell you about Aggie values in one sentence I would simply ask the
        question: How can I be of service? - Current Texas A&M Student

                               BUSINESS PLAN ADDENDUM | Best Practices Guide

Public awareness of incubators and accelerators is typically generated through networking
events, public relations, strategic alliances and industry partnerships. Websites and email are
cost-effective for creating P.R. campaigns which can be tied to such social media as: Twitter,
Facebook, Foursquare, LinkedIn, SnoBall, Instagram and Pintrest. The common practice of
using “trade-outs” or B2B bartering is a smart approach to covering expenses for web design,
printing and media placement. The Student Business Accelerator’s affiliation with Texas A&M
University facilitates affinity branding through Texas A&M’s websites, online calendars and
social media. Affinity branding creates public awareness and legitimacy, while fostering loyalty.
Generally, most incubator marketing plans include certain common industry practices:22
    A statement of the incubator’s overall business goal or vision
    An executive summary (usually for longer and more complex plans)
    A description of the incubation program and its current services
    A description of the overall market and the incubator’s role in that market
    An analysis of what the incubator does well and where it can improve
    A list of specific marketing goals and strategies to achieve them
    A timeline of marketing activities, often with responsibilities assigned
    An estimate of the expected costs associated with each strategy or activity
    Some ways to measure the success of marketing activities

Focusing on the website, the Student Business Accelerator’s website should ideally include:
    History of the Student Business Accelerator, Vision and Mission Statement
    High-quality photographs of the facility, both inside and out, with students featured
    List of strategic alliances at Texas A&M University and Texas A&M University System
    Compelling information about the Accelerator’s economic impact, such as jobs created
    Listing of the Accelerator’s Founders; Board of Directors and Industry Advisory Board
    Listing of the Accelerator’s Student Board of Directors, university advisors and mentors
    A list of student client companies with links to their sites
    A schedule of upcoming events, workshops, Skype sessions, webinars, etc.
    Complete contact information for Student Business Accelerator Director and staff.

To make the most of the Student Business Accelerator’s website, content should include:
    Prominent affinity branding with Texas A&M University to communicate prestige
    Press releases, student client blogs and entrepreneurship resource directory
    Case studies about successful student clients or graduate startups with helpful advice
    Accelerator newsletter and/or downloadable Student Business Accelerator Brochure
    Links to news articles about the Accelerator, student clients, and graduate startups
    A virtual video tour and photographs of the Accelerator and photos from events
    Guidelines for membership, application, and tips on preparing to apply for office space
    Links to relevant resources on business incorporation, business planning, funding, etc.

     Colbert. A Practical Guide to Business Incubator Marketing, NBIA Publications (2007)
                                                           BUSINESS PLAN ADDENDUM | Best Practices Guide
Another possible use of the Student Business Accelerator’s website is to create a clients-only
section accessible with assigned logins and passwords. A clients-only section could include:
     Specific incubator policies and procedures
     An internal directory with names and contact information for all client companies
     Copies of your incubator logo for clients to include in their own marketing materials
     Contact information for partners who offer low-or no-cost services to incubator clients
     Business planning templates, tips, or software
     Forums where clients can exchange information and share ideas

Another possible use of the Student Business Accelerator’s website is to create a clients-only
section accessible with assigned logins and passwords. A clients-only section could include:
     Agendas and Minutes of meetings held by the Student, Advisory and Corporate boards
     An internal directory with names and contact information for student client companies
     Copies of your incubator logo for clients to include in their own marketing materials
     Contact information for partners who offer low-or no-cost services to incubator clients
     Business-planning templates, tips, software downloads, etc.
     Downloadable Policies & Procedures Manual
     Chat rooms or forums where student clients can exchange information and share ideas


In addition to a first-class, interactive website, the Student Business Accelerator can capitalize on
other cost-effective approaches to creating public or brand awareness. More importantly, the
Student Business Accelerator will get the most “bang for the buck” from good old-fashioned
word-of-mouth advertising which significantly depends on publicizing the “cool factor” of
whatever culture evolves at the Accelerator over time.

A “culture of creativity” is vitally important to creating public awareness and acceptance of the
Student Business Accelerator’s brand, as well as to overall success. Whether it will be accepted
or rejected by the target market of students hinges on students’ imprinting their culture on the
programs. Certainly, what is “cool” now may not be “hip” in a decade, therefore a cross-section
of campus trend-makers and student innovators should be recruited to brainstorm with Mays
Business School students enrolled in the Phase II incubator implementation course to be offered
at Texas A&M University during summer 2012. That said, it must be remembered that students
come in all sizes, shapes, genders, ages and races. Some are married and/or have children. The
challenge is not in being all things to students, but in serving them all professionally.

A trend resulting from the recent economic downturn is for “boomers” and adults age 40+ to
return to college for re-tooling in preparation for second careers. Clearly, the prevailing wisdom
is that recent generations can no longer afford to retire as people live longer. In spring 2012,
Texas A&M University started actively promoting the concept of Lifelong Learning. However,
for years, anyone over age 65 has had an opportunity to attend classes at Texas A&M University
for free on a space-available basis. The university already depends on an elderly population for
support, both in terms of volunteer manpower and donor funding.
                                        BUSINESS PLAN ADDENDUM | Best Practices Guide
By engaging more former students in the higher education system, revamped as a regional
innovation system, Texas A&M University expands its reach and market share. By engaging
domestically and internationally with people who never attended Texas A&M University, as the
Association of Former Students is doing now, Texas A&M University and The Texas A&M
University System become global thought leaders. With the successful launch of the BioCorridor
and Town Center projects-- and plans to offer geriatric care on East Campus at the growing
Health Science Center, more non-traditional students will flock to the Research Valley. As more
non-traditional students (“non-trads”) arrive and enroll at Texas A&M University, these students
may launch startups and serve as peer mentors. The emphasis at Texas A&M University now is
on building a “Knowledge Community”, not necessarily in traditional terms of educating 18-24
year-olds but in more robust terms of educating and engaging the masses with regional
innovation in mind. The construction of a STEM school on campus furthers this effort.

Emerging best practices associated with a “Knowledge Community” model or the “university-as-
economic-development-driver” is more evolutionary than revolutionary, since this concept was
pioneered at large academic institutions on the east and west coasts more than three decades ago.
In order to overcome projected reductions in legislative funding, the university’s administration
is expediting a radical shift to a paradigm typically used by private and for-profit institutions. On
a smaller scale, this approach is the theory behind privately-owned, for-profit institutions like
Acton Business School in Austin, Texas. Accredited by the Southern Association of Colleges
and Schools (SACS) and the Association of Collegiate Business Schools and Programs (ACBSP)
through Hardin-Simmons University, the controversial Acton Business School was founded in
2002 by a nationally-acclaimed, former entrepreneurship instructor at The University of Texas.

Certainly, Texas A&M University does not need to emulate other institutions. Texas A&M
University’s rising enrollment is proof of that. Nonetheless, for the university-as-economic-
development-tool approach to higher education and in keeping with the global “Knowledge
Community” that Texas A&M University aspires to establish in the Research Valley, programs
and facilities such as those available to support the launch of the Student Business Accelerator
will only compliment and expand Texas A&M University’s position as a worldwide influence.
While Texas A&M University may be late to the show, its’ new Student Business Accelerator
will undoubtedly take the spotlight once build-out is complete, staff is hire and a plan is in place.


In keeping with Texas A&M University’s philosophy of providing experiential leadership
opportunities for students, the Student Business Accelerator should offer a hands-on learning
environment for students to learn and lead in quasi-governance roles wherein students manage
somewhat autonomously without the appearance of direct university intervention. For example, a
Student Board of Directors led by a president selected from among student officers by a full-time
executive director and his/her Board of Directors exercises oversight of student officers and
appointed committee chairs in a hierarchy reporting directly to an executive director on staff who
is answerable to a Board of Directors comprised of Texas A&M University stakeholders.

                                        BUSINESS PLAN ADDENDUM | Best Practices Guide
This chain of command was adopted in April 2012 by the 12th Man Student. The same chain of
command is used by the Memorial Student Center’s Fall Leadership Conference (FLC), except
that the chair of FLC is chosen from among directors who previously served as delegates. Large
student organizations like FLC and the Student Conference On National Affairs (SCONA) strive
to create the appearance that they are administered by student leaders and offer ways in which
students can become involved in managing budgets, selecting speakers, deciding programs,
planning retreats, scheduling meetings and making other administrative decisions.

Many times, however, the student who is selected as president has been vetted by an independent
panel of student leaders in other student organizations and/or by the Texas A&M University
adviser to this organization. In the case of the 12th Man Student Foundation, the adviser on staff
with the 12th Man Foundation went outside the pool of student officers who had been with the
organization and instead appointed a graduate student from Texas A&M University as the
organization’s student president in an effort to expand the organization’s reach to more students.
The graduate student was answerable directly to the 12th Man Foundation’s advisor and reported
to the executive director of the sponsoring 12th Man Foundation. During interviews this year,
three members of the executive director’s staff vetted the student officers applying for president.

The historical challenge with student organizations is providing for continuity and oversight
while allowing as much freedom as possible for student leaders to exercise autonomous decision-
making. There must be a necessary check-and-balance in place to protect the university’s vested
interest in the operations and budgets of student organizations, while at the same time allowing
students the freedom to fail without inherent fear of financial liability to the university or to
stakeholders. The process is made easier by hiring the right adviser and/or executive director for
the sponsoring organization, such as the Memorial Student Center or the 12th Man Foundation.
Finding the right person to serve as executive director and any paid staff employees might be
challenging, but we believe as a class that an appropriate and qualified professional may be hired
from within the ranks of the Center for New Ventures & Entrepreneurship, namely Don Lewis.

The Institute for Creativity in the College of Architecture and Mays Business School, as well as
other colleges within the university, may be good sources for guest lecturers, faculty mentors and
workshop facilitators. The most important hire, however, is the executive director and this person
should be adequately compensated to industry standards, in the opinion of MGMT 489 students.
NBIA found in a 2005 compensation survey that incubator executive salaries have increased
since 200023. Median salaries in 2005 increased 13 percent to $72,000, as compared to 2000 and
keeping pace with inflation over the same period. NBIA also concluded that one in five incubator
managers reported earning an average salary of more than $100,000.

                                                  “…incubator sponsors continued to recognize the need to
                                                                   adequately compensate incubator managers
                                                       in order to attract and retain qualified professionals
                                                   who can help entrepreneurs grow successful businesses.”

     Knopp. 2005 Compensation Survey of Incubation Executives, NBIA Publications (2005)
                                                         BUSINESS PLAN ADDENDUM | Best Practices Guide

The Student Business Accelerator has already received several significant in-kind contributions
from former students-- as well as three pledges of in-kind donations for new or gently-used
commercial office equipment, furniture and desk lighting. In-kind contributions received include:
        12-unit phone system
        70+ matching office chairs
        20+ conference chairs
        20+ matching office tables
        1 wood modular desk system
        1 white board
        2 PCs with flat screens
        1 computer printer w/scanner
        1 paper shredder
        1 portable projector


Because subsidies for business incubation programs represent an investment in the regional
economy, ergo support from Texas A&M University for the Student Business Accelerator should
logically result in a return on investment for the institution as well as for the regional economy.
NBIA research has shown that for every dollar of estimated public subsidy provided for
operation of an incubation program, clients and graduates of NBIA member incubators generated
approximately $30 in local tax revenue.

The Student Business Accelerator should consider joining the NBIA. Member-incubators report
that 84 percent of client startups remained in their host communities after graduation.24 The
National Business Incubation Association released a book in 2002 about how tax status and
business entity affect incubator operations-- Incorporating Your Business Incubation Program,
According to the NBIA, this book is the product of research and interviews with tax experts and
incubator managers from public and private sectors.

When choosing the business entity, the operators of U.S. business incubators and accelerators
must consider tax implications or risk not being able to legally accomplish the entity’s mission.
A for-profit incubator or accelerator has a different approach to decision-making than an
incubator operated as a nonprofit corporation. The entity chosen will determine shareholders’
liability and any protection against claims brought against the incubator, as well as how taxes are
handled. Choice of entity also determines how many shareholders are in the incubator and how
employees are compensated. Texas A&M University enjoys sovereign immunity so liability may
not be as much a consideration as the need to keep at arm’s length from a ground-breaking effort.

     Knopp. 2006 State of the Business Incubation Industry. NBIA Publications (2007)
                                                           BUSINESS PLAN ADDENDUM | Best Practices Guide
Most successful incubation programs are established as 501(C)(3) tax-exempt corporations and,
regardless of tax status, are generally organized as one of three types of entities:
     Independent incubation programs, which includes for-profit incubator operations
     Programs or departments of larger tax-exempt entities, operating under shared tax status
       and common among university-operated or government-affiliated incubation programs
     Community-aligned programs that work with other organizations for shared governance

About six percent of all U.S. incubators are set up as for-profit entities. As a 501(C)(3), the entity
is subject to excess benefits tax if private benefits inure to shareholders.25 In the Student
Business Accelerator’s case, a need exists for tax-exempt status or the entity must fall under the
umbrella of a tax-exempt entity. If affiliated with Texas A&M University, the Student Business
Accelerator would enjoy liability protections under sovereign immunity law. As a sub-operation
of the Center for New Ventures and Entrepreneurship, the Student Business Accelerator might be
able to recognize IRS tax-deductible contributions from donors (since it will likely depend on
outside funding at some point) but would also be subject to university fundraising protocols.

The Student Business Accelerator must generate broad public support to be sustainable or it
should be a subsidized organization under CNVE or OTC to avoid IRS classification as a
foundation. The risk for a 501(C)(3) in being designated by the IRS as a private foundation,
rather than as a public charity, is the entity being made subject to stricter regulations and harsher
tax treatment. The Student Business Accelerator can overcome being designated as a private
foundation if it applies for 501(C)(3) status by meeting the IRS’ “one-third public support test”.
At least one-third of the entity’s support on a four-year rolling average, according to NBIA, must
come from the general public in order for public charities to avoid designation as a foundation.

Approximately 20 percent of all U.S. incubators are sponsored by universities and the number of
student business incubators is growing annually. Back in the day, incubators could achieve
501(C)(3) status by offering student internships or assisting university professors in advancing
scientific research. College students and professors are no longer considered a charitable class,
unless an incubator proves that it is serving the underprivileged or improving economic
conditions for a segment of the population with limited economic opportunities.26 In order for
the Student Business Accelerator to obtain grants from a private foundation or even a
corporation, it needs to be a 501(C)(3) or fall under the umbrella of a 501(C)(3) organization. For
example, the Kauffman Foundation does not award grants to an entity that is not a 501(C)(3).

It is recommended that the Student Business Accelerator not take an equity position in any
startup but rather arrange with a private fund manager or angel group to manage a seed fund for
investment in student startups. Income earned by the Student Business Accelerator through any
dividends or profit-sharing with equity investments is not considered part of the entity’s
charitable mission, if organized as a 501(C)(3), and therefore would be subject to Unrelated
Business Income Tax (UBIT) laws. Revenue from rent and fees for incubator clients is generally
tax exempt, according to NBIA, but renting space to non-clients is subject to UBIT laws unless
the entity owns a facility.

                                                          BUSINESS PLAN ADDENDUM | Best Practices Guide
Every tax status has limitations so a possible solution is to collaborate. A common economic
development approach to business incubation, according to NBIA, is to form an arm’s length
relationship with separately incorporated for-profit companies. An arm’s length relationship can
make it possible for a non-profit corporation to:
         Receive income from an equity position in an incubator client
         Attract investment capital for graduating incubator clients
         Provide performance incentives to incubator management or staff

To this end, a “commercialization corporation” can be formed as a partnership between the
Student Business Accelerator and Texas A&M University with any other sponsoring entity for
economic development purposes. The NBIA identified three commercialization corporations that
can serve as flagships for a group of separately incorporated entities27:
        A 501(C)(3), which may include an incubator
        A Limited Liability Company Seed Fund
        A C-Corporation contracted to manage incubator, seed fund or both entities.

The NBIA cites the Kansas Technology Enterprise Corporation (KTEC) in Topeka, Kansas, as a
model organizational structure.28 KTEC formed a series of commercialization corporations in
1994 which included a university and a local sponsor. The intent was to encourage aggressive
venture capital investment and economic development in the region. In the KTEC model, there is
a General Partnership which oversees three entities: a 501(C)(3) funded by KTEC with local city
and county governments, university research foundations; nonprofits; grants for internship
programs and foundations. The non-profit incubator contracted with a for-profit C-Corp that was
the acting manager of the non-profit. A separate LLP formed as a holding company provided
oversight of an investment fund, managed by the same manager as the non-profit and for-profit.
In all three entities, a board of directors or investment review committee provides oversight. If
the Student Business Accelerator is not set up under the CNVE or OTC umbrella, the best
practice may be to structure the entity similar to KTEC’s model.


            infoDev Incubator Support Center (iDISC): The iDISC is an international online
             platform for Global Network Members to showcase incubators and best practices.

            Innovation Corps: The National Science Foundation announced a $5 million dollar
             virtual incubator for students in July 2011, to be called the Innovation Corps or iCorps.
             The federal program intends to identify 100 student startups with research-stage ideas and
             provide each with mentoring and $50,000 in capital. Private partners in this new venture
             include the Ewing-Marion Kauffman Foundation and the Deshpande Foundation.

     Boyd. Incorporating Your Business Incubation Program: How Tax Status and Business Entity Affect Operations (2002)
     Boyd. Incorporating Your Business Incubation Program: How Tax Status and Business Entity Affect Operations (2002)
                                                          BUSINESS PLAN ADDENDUM | Best Practices Guide

Students enrolled in Management 489 offer these recommendations for the Student Business
Accelerator’s implantation and operation:

   (1) Hire an Executive Director of the Student Business Accelerator from CNVE. This person
       will have day-to-day management responsibility for Student Business Accelerator staff.

   (2) Establish the Student Business Accelerator as a 501(C)(3) non-profit corporation,
       governed by a Board of Directors from representatives comprising a general partnership:
            Strategic Initiatives
            Division of Research
            Center for New Ventures and Entrepreneurship
            Institute of Applied Creativity
            Office of Technology Commercialization
            Dwight Look College of Engineering
            College of AgriLife
            Computer Science
            Health Science Center

      This nine-person Board of Directors will have oversight of the Executive Director and
      ultimate responsibility for the Student Business Accelerator’s administration and mission.

   (3) Partner with Rackspace Hosting LC in San Antonio and Shell Gamechangers in Houston
       to renovate the Donald A. Houston Building into the House of Geekdom. Partner with the
       Division of Residence Life and VP of Research to create a Living Learning Community
       sanctioned by the Division of Research as a tenant in Research Park and by Texas A&M
       University’s Division of Residence Life as a privately-owned, co-ed residence hall. The
       House of Geekdom will serve as a dormitory for student entrepreneurs, in particular
       freshmen. The facility will double as a STEM school until a separate building is built.

   (4) In support of the 501(C)(3) and student startups, create a for-profit corporation or partner
       with one or more existing investor groups -- such as the Aggie Angel Network -- to
       facilitate equity investments in student startups and graduate companies upon exit.

   (5) Form a Student Board of Directors and an Industry Board of local and state professionals.

   (6) Form an Advisory Board of representatives from each college in Texas A&M University.

   (7) Form an International Board of business entrepreneurs with experience in import/export

   (8) Advocate with Aggie Angel Network or another angel group for a crowd-sourced fund.

                                       BUSINESS PLAN ADDENDUM | Best Practices Guide

                         The InNOLEvation Accelerator
                             Florida State University

SPONSOR: The Jim Moran Institute for Global Entrepreneurship
LOCATION: Room 117 on the first floor of the Rovetta Business Building (on campus)


MISSION: “To create a relaxed learning environment where classroom education is made
relevant for student entrepreneurs who are developing new business ideas.”

FACILITY: The InNOLEvation Accelerator students to develop “launch plans” for start-ups
and become established to the point of self-sufficiency. The accelerator connects enterprising
students with faculty and professional mentors, provides professional office space and facilitates
business development. The Accelerator’s “experiential component is crucial to make
entrepreneurship a more integral part of Florida State’s undergraduate student experience.”

The InNOLEvation Accelerator serves as a focal point for undergraduate business start-up
activity on campus. Student entrepreneurs can access business resources and private office space
for start-ups. Space is provided rent-free for up to one year (renewable annually). Students have
“controlled” access to the student accelerator facility, as well as shared computing and
communications resources. The InNOLEvation Accelerator’s facility supports up to eight early-
stage ventures with a common area for students to brainstorm in a “relaxed environment”:

                                       BUSINESS PLAN ADDENDUM | Best Practices Guide
 “…we have designed the accelerator to nurture discussion and idea generation while providing
students with opportunities for peer mentoring interactions. By facilitating hands-on learning and
exploration in a supportive environment, the InNOLEvation Accelerator helps students turn their
passion into a reality, while benefiting the student educational experience and furthering Florida
State University’s mission of applied learning. Accelerator residents are expected to work
together to promote the success of each others' ventures. Residents are expected to demonstrate
leadership in actively engaging and supporting entrepreneurial activities across the campus.”

The Jim Moran Institute faculty and staff recruit experienced industry experts from the local
entrepreneurial business community to serve as volunteer advisers for students in the program.
These “Entrepreneurs-in-Residence” coach the students on the analysis and execution of their
venture, while also providing access to their network of industry and functional contacts.
Examples given included legal services, accounting and bookkeeping, information technology,
and other advice from professionals in industries of interest to businesses in the accelerator.

PROGRAMS: In April 2012, Tallahassee-based software company Genivia Inc. pledged
$50,000 annually for three years to create the Genivia Fund for Entrepreneurship at Florida State
University. The fund will help undergraduate and graduate students engage in entrepreneurship
studies. Outstanding students from any discipline who focus their start-up efforts on ventures
involving computers, information technologies or other innovative technologies are recruited and
encouraged to apply for individual grants, funded by Genivia. To be eligible for an individual
grant, students must submit an application with a commercialization plan and business goals. 29

                             The TechArb Incubator
                        TechArb Ideas & TechArb Ventures

SPONSORS: College of Engineering's Center for Entrepreneurship
          Ross School of Business's Zell-Lurie Institute for Entrepreneurial Studies
          Office of the Vice President for Research
LOCATION: 500 E. Washington St., Ste. 10; Ann Arbor, Michigan (5 minutes from campus)


MISSION: “At TechArb, we empower University of Michigan students to bring their ideas to
life. We do this by teaching the entrepreneurial mindset, fostering a strong entrepreneurial
community, connecting student entrepreneurs to experienced mentors and the UM alumni
network, and showcasing teams to funders.”

                                           BUSINESS PLAN ADDENDUM | Best Practices Guide
FACILITY: Launched as an experiment by a group of students, the TechArb Incubator is now
in its seventh session. TechArb has nurtured more than 80 fledgling firms since it began in 2008
“with a little IKEA furniture and some big ideas.” 30 The university assumed responsibility for
operations in fall 2009, making it neighbors of Goggle and Ann Arbor SPARK in McKinley
Town Centre. Today, per their website, TechArb continues to educate student entrepreneurs and
graduate successful ventures. Teams of students gain 24-hour access to a shared facility that
offers Wi-Fi, unlimited coffee, conference rooms and plenty of white boards.
According to TechArb’s website, the business accelerator has attracted tech companies to Ann
Arbor. California-based software firm Cataphora recently located an office adjacent to TechArb.
In 2010, travel app company Mobiata located within the incubator and eventually hired some of
the incubator’s tenants. The incubator began as a student-centric initiative and was run by
students, but after it was adopted by the University of Michigan and relocated to its’ current
space, the incubator became available to any incorporated entity (LLC, C-Corp, etc.) that has a
relationship with the school. It is now managed by an advisory board and dedicated staff.

When students launched TechArb, they followed a model established by Ann Arbor SPARK.31
Students approached a commercial real estate company called McKinley about leasing on the
fourth floor of the McKinley Towne Center, overlooking downtown Ann Arbor. TechArb did not
charge rent. After the summer experiment proved measurably successful, the university stepped
in and took control of the outfit. TechArb was moved in 2011 to the basement of a parking
garage, formerly known as Tally Hall and now called The Offices at Liberty Square. Both
locations were owned by McKinley, but the basement location is larger and a cheaper location.
   For the permanent basement location, students no longer need to prove that demand exists for
such a facility. The current task is how to make this facility a financially sustainable venture.
Students are now offered low-cost rent and in a few cases, free rent.

PROGRAMS: Some 20-25 student teams are accepted into TechArb per six-month session.
Students have 24-hour access to the facility and free Internet. Their time in the facility is limited
to six months. They have access to co-working spaces for early stage companies, provided the
companies are designing new technology, a new product or service, or have identified a market
need. Teams follow a deadline coordinated with a separate “Dare to Dream” grant program and
apply under three categories of admission: Dream Venture Shaping; Assessment; or Integration.
The Dare to Dream program encourages students to move through the startup process by offering
business development seminars and grants ranging from $500-$10,000. Students must meet
benchmarks and produce deliverables if accepted.

For the summer session in 2012, there will be two tracks offered for students-- TechArb Ideas
and TechArb Ventures. TechArb Ideas is for teams of student entrepreneurs who have committed
to working through the summer to explore the commercial feasibility of their idea. Teams focus
on customer discovery, prototyping, experimentation and talent recruitment. TechArb Ideas and
TechArb Ventures have separate training sessions to ensure relevancy.

                                           BUSINESS PLAN ADDENDUM | Best Practices Guide
TechArb Ventures is for student entrepreneurs who have a clear understanding of their customers
and a working prototype of their product or service (at a minimum). Teams must have committed
to working full-time during the summer to launch their new venture. These teams gain access to
an exclusive set of Bay Area mentors and are also eligible to apply for one of the $10,000 grants.

Each week, teams meet for an all-hands meeting at TechArb to discuss such topics as
interviewing, ideation, rapid prototyping and pitching. Mentors also meet each month with teams
to review their progress and offer feedback. Students take supervised trips to entrepreneurship
conferences. TechArb staff and local entrepreneurs, as well as major donors, hold regular office
hours to help student entrepreneurs learn and become successful. Staff connects students to
alumni investors and prepares student teams to connect with the UM entrepreneurial ecosystem:
angel investors, venture capitalists, entrepreneurs, accountants and lawyers.

At the end of the session, student teams will pitch or do product demos for prospective investors.
For the spring 2012 session, more than 50 student-led start-ups will present to equity investors on
April 13, 2012 at a dinner called the Student Venture Showcase. According to TechArb’s
website, several student ventures have received equity funding or been acquired. TechArb staff
attributes its’ major strengths to student community and peer mentoring:

           “We have found that teams learn as much from one another as they do from
            the TechArb staff and mentors…each month, we hold pseudo-board meetings
           with teams, providing team-specific advice, coaching and accountability.”33



                                          BUSINESS PLAN ADDENDUM | Best Practices Guide
                             Student Business Incubator (SBI)
                                University of Northern Iowa

    SPONSORS: John Pappajohn Entrepreneurial Center (JPEC)
    LOCATION: JPEC facility in the Business & Community Services center on campus

    MISSION: “The UNI Student Business Incubator is an educational learning laboratory and a
    program of the John Pappajohn Entrepreneurial Center designed to inspire and educate students
    interested in entrepreneurship and small business.”

    FACILITY: Originally funded in 2005 by the Small Business Administration and private
    donations, the SBI program made it possible for student business owners to explore business
    ideas with the assistance of JPEC staff and mentors. Individual students and teams of students
    currently enrolled in UNI are eligible to apply to the SBI on a semester basis.

    PROGRAMS: Admitted students are required to participate in programs designed to increase
    their chances for entrepreneurial success. There are two types of incubation in the SBI -- physical
    (full) incubation and affiliate incubation. Students involved in full incubation receive one of ten
    suites in JPEC's facility on campus. Students in the affiliate program may not be ready to occupy
    physical space or their business may not need a space. Students admitted to the incubator may
    register for free classes and workshops conducted by JPEC staff. SBI has three CPAs and
    lawyers on staff, as well as an insurance professional and financier. SBI student tenants receive:

   One-on-one technical assistance
   Legal and accounting services
   Seed capital programs
   Market research assistance
   Professional office space
   State-of-the-art technology
   Dedicated server space
   Standard office equipment
   Access to meeting facilities
   Small business resource library
   Training programs
   Mentoring programs
   Networking Opportunities

                                           BUSINESS PLAN ADDENDUM | Best Practices Guide
                                  Student Inc.
                         KTH Royal Institute of Technology

SPONSORS: KTH Innovation and Excitera
LOCATION: Teknikringen 14 on campus Vallhallavägen

INSITUTION: Founded in 1827, KTH Royal Institute of Technology in Stockholm is the
largest and oldest technical university in Sweden. Education and research spans from natural
sciences to all branches of engineering and includes architecture, industrial management and
urban planning. The educational programs lead to Bachelor, Master or PhD degrees in
engineering, science, or architecture. There are more than 15,000 undergraduate students and
1,600 active postgraduate students.

FACILITY: Student Inc. admits students pursuing technology-based projects with strong
commercial potential. Student Inc. offers ongoing support and resources from experienced
professionals and monthly workshops on entrepreneurship. Student Inc. also offers access to
funding, formation, legal advice and dedicated office space. The student incubator features a
kitchen, meeting rooms, co-working spaces and office workspaces.

 STUDENT, INC.                                        FREE SAMPLES OF RED BULL

                                     BUSINESS PLAN ADDENDUM | Best Practices Guide

                       BUSINESS PLAN ADDENDUM | Best Practices Guide
                       UW Student Business Incubator (SBI)
                         University of Wisconsin - Madison

SPONSORS: Students in Free Enterprise (SIFE)
LOCATION: 3rd Floor of the Student Activity Center / 333 East Campus Mall STE 3101

MISSION: “By facilitating hands-on learning and exploration in a supportive environment, the
Student Business Incubator helps students turn their passion for entrepreneurship into a reality,
while benefitting the campus and furthering UW-Madison’s mission of applied learning.”

FACILITY: Launched in January 2009, the SBI provides office space, resources and business
support for six student-led start-ups on campus. Additionally, the SBI provides entrepreneurship
training and resources for any student with an interest in launching a start-up. The facility came
about as the result of one student’s independent research in 2006 on business incubators and
dream of having a campus-based student incubator to be associated with a student organization,
called Students in Free Enterprise. SIFE studied incubators for two years. They also interviewed
campus stakeholders and interviewed student entrepreneurs to see what resources would be
beneficial for a student incubator. SIFE made presentations to the university and ultimately
secured space in the new Student Activity Center (SAC), which opened in the spring of 2009.

After the student graduated in spring 2008, another student pursued the application process to
establish the SBI in the SAC. The application was approved and the SBI opened in January 2009.
After this student graduated, two more students worked to arrange agreements with the Law and
Entrepreneurship Clinic on campus and the UW Student Business Development Center to
provide free classes and legal advice for student-led ventures. The SBI is completely run by
students. The SBI is an official student organization, not a business entity. The SBI offers six
student entrepreneurs an opportunity to access free shared co-working spaces in cubicles. The
space is governed by a student board. Non-students may participate as long as one of the partners
in the start-up is a student and the student partner is enrolled for the entire school year. All
students are eligible to attend free entrepreneurship events and be advised by student mentors.
Student tenants are eligible to receive:
     One of two individual cubicles inside an office shared by one other student start-up.
     Lockable storage space within the cubicle.
     Free basic office supplies, plus free access to a printer, scanner, copier and fax machine.
     Free land phone line and free mailbox within the SAC with a business address.
     Free legal audits provided by the Law and Entrepreneurship Clinic on campus.
     Free workshops through the UW Student Business Development Center on campus.

                                       BUSINESS PLAN ADDENDUM | Best Practices Guide

                                Duke University

SPONSORS: Students in Free Enterprise (SIFE)
LOCATION: 2nd floor of the Teer building (on campus)

MISSION: “The goal of DUhatch is education. Entrepreneurship is an area where classroom
learning is made relevant through doing. DUhatch will provide this experiential component to
make entrepreneurship a more integral part of the Duke undergraduate student experience.”
FACILITY: DUhatch provides rent-free professional office space to six student startups for up
to four years each, but one must be a social venture. It also provides a centralized meeting place
for students to collaborate in a relaxed environment, providing opportunities for peer mentoring
interactions and for team synergies to develop. All teams can access the offices on a 24-7 basis.
Resources provided for free include a color printer and a phone with a conference line. Support
includes a business address and mail box for each team and free access to a computer,
conference room and office supplies. DUhatch staff manages the allocation of resources through
the Center for Entrepreneurship and Research Commercialization at Duke University. CERC’s
administration coordinates meetings between mentors and mentees. Student startups accepted to
DUhatch may receive a stipend for their business expenditures. In some cases, complimentary
student housing and a summer stipend may be made available during the summer for mentees.

                                       BUSINESS PLAN ADDENDUM | Best Practices Guide
PROGRAMS: DUhatch staff helps each student venture to obtain funding from venture
capitalists, angel investors, foundations or other sources of support that includes help with
writing business plans and grant proposals. Through their “Coaches on Call” program,
professional firms donate consulting time to student entrepreneurs. The DUhatch incubator
provides in-house access to professional consultants via periodic visits with lawyers, CPAs, web
designers and strategic managers. The EntreMentoring Program pairs mentors with students.

                                      BUSINESS PLAN ADDENDUM | Best Practices Guide

SUSAN VESTAL                                    JAMES LANCASTER

DR. JORGE VANEGAS                             DR. JOYCE JUNTUNE

                        BUSINESS PLAN ADDENDUM | Best Practices Guide

BLAKE PETTY                                  DR. RICHARD LESTER

RODNEY HILL, AIA                                       DON LEWIS

                          BUSINESS PLAN ADDENDUM | Best Practices Guide

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