More than space: Incubators help start-ups get connected, too

More entrepreneurs are skipping the garage to launch their ideas from a business incubator.

That's because incubators are springing up locally and nationally amid increased demand for their support and services. Laid-off workers want to start businesses as resources have dwindled in the recession.

"Over the last year or so, we have seen more interest in the industry as more communities look for ways to support new business development and create jobs," said Linda Knopp, spokeswoman for the National Business Incubation Association "Many cities are looking at business incubation programs as a way to build their own businesses by supporting local entrepreneurs," instead of recruiting companies from afar.

Business incubators - also called accelerators - usually offer free or affordable offices, meeting rooms, shared services, counseling and networking. Some even offer laboratory space and capital.

Dallas-Fort Worth has 10 incubator programs. A few began this year; others are expanding or re-inventing themselves.

The Pipeline incubator at UT Southwestern's BioCenter in Dallas opened in April. The University of Texas at Dallas' Institute for Innovation & Entrepreneurship plans to offer physical office and lab space to university start-ups or licensees of university research by year's end in addition to its virtual incubator services.

The Center for Innovation at Arlington is undergoing a major reorganization and renovation, and plans to announce a new business model this fall, said director Sergio Bento.

Last month, the Arlington Technology Incubator and the Center for Entrepreneurship merged into the center, which is focusing more on medical devices.

While most of the nation's 1,100 incubators are nonprofits sponsored by economic development groups, universities and cities, the number of for-profit programs has increased.

For-profit Tech Wildcatters, which started last month in Dallas, is a hybrid of an incubator and venture capital firm.

Chris Fagan, co-founder of Mobestream Media in Dallas, is getting more out of Tech Wildcatters than he expected.

"The selling point for us is that we'd start getting immediate access to people who can help us sell our business," said Fagan, whose firm's Key Ring Reward Cards application lets consumers manage loyalty accounts from cellphones. "I've gotten connected to people I never would have dreamed of."

One-year-old CoHabitat isn't an incubator, but it provides work space, Wi-Fi and networking for two dozen entrepreneurs in a large house in Dallas' Uptown area for as little as $150 a month.

Already, CoHabitat has had an impact. Tech Wildcatters co-founder Gabriella Draney met her partner there and three of Tech Wildcatters' five firms had offices there.

THE BUSINESS OF BUSINESS INCUBATORS

Business incubators provide work space, resources, support and sometimes capital to help entrepreneurs launch an idea or company.

•Number: 1,100 in the United States

•Type: 94 percent are nonprofits focused on economic development.

•Focus: 54 percent are not industry specific, 39 percent focus on technology, 4 percent service and 3 percent manufacturing.

•Location: 53 percent are in urban areas, 28 percent are rural and 19 percent are suburban.

•Survival: Graduates have an 87 percent survival rate.

•Impact: Helped more than 27,000 North American start-ups with more than 100,000 full-time workers and annual revenue topping $17 billion in 2005, the latest data available.

SOURCES: National Business Incubation Association; Ohio University; Southern Technology Council; University of Michigan

BUSINESS INCUBATORS IN NORTH TEXAS

Business Incubation Center

Where: El Centro College's Bill J. Priest campus, Dallas

Started: 1989

Funded: El Centro College and revenue

Criteria: Start-ups must submit a business plan and a formal application ($25 fee).

Services of note: Business library access, janitorial services, and an on-site Subway sandwich shop opens this summer.

Cost: Monthly rents of $90 to $1,800. Small fees for copies, faxes and postage.

Term: Up to four years.

Participants: 36

Website: www.elcentrocollege.edu/BJP/bic.asp

Center for Innovation at Arlington

Where: University of Texas at Arlington

Started: 2001

Funded: Federal funds and revenue

Criteria: Must submit a business plan and market analysis. Technology firms must have a patent or one pending.

Services of note: Advisory board services, access to on-site business assistance agencies, virtual incubator services and help finding financing and lab space elsewhere.

Cost: Rent of $18 per square foot. Client fees of $2,500 a year.

Term: Up to three years

Participants: Four incubator tenants; seven virtual projects

Website: www.arlingtontx.com/center-for-innovation

Greater Dallas Hispanic Chamber of Commerce's incubator program

Where: Dallas, Oak Cliff and West Dallas

Started: 1994

Funding: City of Dallas and the chamber.

Criteria: Business must be led by a low- to moderate-income resident of Dallas with no more than four employees. Must submit a business plan and application.

Services of note: Janitorial services and help finding capital.

Cost: $150 a month

Term: Up to three years

Participants: 10

Website: www.gdhcc.com

Institute for Innovation & Entrepreneurship's Venture Development program and incubator

Where: University of Texas at Dallas, Richardson

Started: Virtual incubator in 2007, physical incubator to open by end of year.

Funding: UTD and rental income

Criteria: Viable technology-based startups with management and affiliated with the university

Services of note: Physical incubator will offer lab space, help developing a business plan, product analysis and market research, help recruiting management teams, provides MBA-student interns and faculty advisers, entrepreneurs-in-residence program, helps with introduction to investors.

Cost: Rental rates are still being determined. UTD may take a small equity stake.

Term: Still being determined

Participants: More than 12

Website: innovation.utdallas.edu

NTEC Inc.

Where: Frisco

Started: 2003

Funding: Frisco Economic Development Corp. and sponsors

Criteria: Medical and clean technology firms must have a full-time founding entrepreneur, intellectual property and time-to-market within three years. Must submit a business plan or executive summary.

Services of note: Lab space, fitness room and help meeting investors. Goal-setting, planning and strategizing with management and advisers for accelerator companies.

Cost: Monthly rents range from $399 to $1,400 (labs start at $799). Accelerator companies pay a management fee and give up a small equity stake.

Term: One year

Participants: Nine accelerator companies and 11 tenants

Website: www.ntec-inc.org

Pipeline at the BioCenter

Where: University of Texas Southwestern Medical Center, Dallas

Started: 2010

Funding: UT Southwestern and Dallas-based AT&T.

Criteria: Viable medical technology and biotechnology companies with management and some capital. Must submit a presentation or business plan.

Services of note: Lab space, a medical library and introduction to investors.

Cost: Rent to be set. Companies give up a small equity stake.

Term: Two and a half years

Participants: No incubator firms; two BioCenter tenants.

Website: www.pipelineatbiocenter.com

STARTech Early Ventures incubator

Where: Richardson

Started: 1998

Funded: STARTech Early Ventures

Criteria: Technology startups

Services of note: Can provide financing and helps find investors.

Cost: Rent of $425 to $550 a month

Term: No limit

Participants: 15

Website: www.startechev.com

TECH Fort Worth

Where: Guinn School and University of North Texas Health Science Center

Start: 1998

Funding: State, city of Fort Worth, UNTHSC at Fort Worth and corporate sponsors

Criteria: Must have proprietary technology for the acceleration program.

Services of note: Six labs and introduction to investors; interns, strategic planning and help recruiting managers for acceleration companies.

Cost: Rent is about $1 a square foot. The incubation program has a one-time $1,000 fee. The acceleration program costs $5,000 a year.

Term: Three to six months for the incubation program

Participants: 16 acceleration companies and five incubation companies

Website: techfortworth.org

Tech Wildcatters

Where: Dallas

Started: 2010

Funding: Investors and sponsors

Criteria: Business-to-business technology start-ups must have more than one founder and must move to Dallas.

Services of note: Mentoring, $20,000 to $25,000 in capital and access to investors.

Cost: Relinquish up to 10 percent equity.

Term: 12 weeks

Participants: Five

Website: techwildcatters.com

UNT Discovery Park incubator

Where: Denton

Started: 2010

Funding: University of North Texas

Criteria: It officially opens this fall but is accepting tenants and virtual clients now.

Services of note: Lab space, mentors, interns, access to research and faculty (including the on-site College of Engineering and College of Library and Information Sciences) and help finding financing.

Cost: Monthly rents are being set, but should be $1.50 to $1.75 a square foot.

Term: Up to three years

Participants: Two tenants; 17 virtual clients

Website: research.unt.edu/discoverypark.htm