070926 option entrepreneuriat cours incubateurs

26.09.2007 – Session 1 Incubators

Incubators: typology, models and examplesESCP-EAP Option Entrepreneuriat

Session 1Paris, September 26th 2007

26.09.2007 – Incubators session 1 2

26.09.2007 – Incubators session 1

Foreword

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Summary

Incubators : what for ?

Models of Incubators

Incubators in Paris

ESCP-EAP Academic Incubator

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Summary



Incubators in Paris


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A definition :

« Incubator : one that incubates, as

(a) an apparatus by which eggs are hatched artificially

(b) an apparatus with a chamber used to provide controlled environmental conditions especially for the cultivation of microorganisms or the care and protection of premature or sick babies »

Webster dictionary

Premature or early stage ?

Incubators after the New Economy

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Types of Incubators in the New Economy

Venture Incubator : the incubator as we know it

Campsix, Cambridge Incubator, IdeaLab !, eCompanies

Venture Accelerator : consulting services

IntendChange, Reactivity, Mc Kinsey, Yankee Tek

Venture Portal : online self service

NVST.com, TheElevator.com, Garage.com

Venture Network : portfolio of investments + synergies

Internet Capital Group, Net Value Holdings, CMGI

Source : Oonut Mac Chinsonboom, MIT, 2000

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Incubators : why do we need them ?

Capture potentially successful deals missed by VCs

Facilitate idea creation

Enhance product and service

Accelerate speed of implementation

Provide supplemental management

Offer more « hand holding » than a typical VC

Give access to expertise in marketing, operations, HR, technical, management, strategy, business development, financial, and others

Facilitate business development and partnerships

Help in finding clients

Facilitate sources of fundings, now and later stage

Portfolioize seed-stage ventures

Provide additional deal-flow and vetting of deals for later-stage investors

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Incubators : why should an entrepreneur go to them ?

– Assistance in brainstorming a concept or application for a new technology

– Provide additional validation

– Assist in creating the business model and plan

– Facilitate seed funding

– Offer more « hands » to the new entrepreneur

– Provide an option for ventures that were too early or were missed by VC

– Provide unique access to services in a resource-deficient region (e.g. shortage of office space in Silicon Valley)

– Financial advantage in that cost savings in a contracted time frame are more than the cost of equity that must be given to the incubator

– Offer access to uniquely positioned/qualified domain experts or advisors

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Incubators : different natures for a common objective

Before or after the company creation :

US : before and after the creation of a company, an ‘innovation center’

France : only before (followed by the ‘pepinière’)

Walled or unwalled

Public or Private

Technological or generalist

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Criterias to analyze incubators

PromotersPublic : region, state, universities / schools, chambers of commerce, …Private : large companies, individuals, foundations / trusts, associations, research centers, …

Mission and objectivesJob creation, business activity, transfer of technologies, profit, revitalization of regions, promotion of specific sectors, …

Type of projectsGeneralist, or specialized on one sector (crafts, technology, services, …)To specific populations : students, people in reconversion, …Before, during or after the company creation

Type of services offeredReal estate, administrative services, consulting and support, training and coaching, networking

Financial / business modelRent or services billed to incubated companies, external services, subventions or donations, sponsoring, royalties / dividends / equity

EnvironmentGeographical area (rural, industrial, large city …) and network of partners (companies, research centers, business angels / VCs, …)

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Where are we on the learning curve ?

Source : Philippe Albert, CERAM Sophia Antipolis for the French Ministry of Industry, 2002

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Incubators in Europe vs US

Source : Philippe Albert, CERAM Sophia Antipolis for the French Ministry of Industry, 2002

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The US : an innovative leader

Development of incubators is old (first one in 1959)

Environment is favorable to the creation of companies (culture, legal, etc…)

Entrepreneurial spirit is strong

The National Business Incubators Association (NBIA) plays a leading role

The public and private sectors are strong

VCs and BAs are key partners, especially in technological areas (Silicon Valey, …)

Universities are very often involved (research, transfer of technologies, teaching on entrepreneurship, …)

Companies plays a minor role

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The UK : a recent come-back of the government along private cies

Some icon successes, but global result is poor

Incubators are mainly « company hotels »

Many initiatives from the Department of Trade and Industry starting 1999 to improve regulations and incentives

Entrepreneurial spirit low

Development of local public / private networks and Regional Development Agencies

Many consultants selling services to incubators

Dynamic BAs network and Stock Exchange

The UKBI association plays a leading role

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Germany : a powerful engine with low return fueled by public money

The largest number of incubators in Europe

Generally a local partnership between collectivities, chamber of commerce, banks and Länder

Entrepreneurial spirit is low

Teaching of entrepreneurship is encouraged but universities are slow to adapt

Help for SMC are numerous

Bavaria and Baden-Würtemberg are leading in High Tech sectors

Internationalisation of large German companies is « exporting » incubators where their research centers are

Private incubators are in a very difficult situation

The crash of the Neuer Markt is dissuading a lot of potential investors

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France : small initiatives with high return

The French territory is covered with many “pépinières”

Quality process (ISO) has improved professionalism

Government plays a leading role (1999 Allegre law on research, 2002 law Dutreil on economic initiative)

Sensibilisation to entrepreneurial spirit is only starting, but universities and schools are slow to pick up

Private incubators are searching for a business model

VC is limited and concentrated on key industrial sectors (telecom, software, bio-tech) and spin-offs vs pure creations

Banks are reluctant

BAs are few and very often active outside of France where environment is better

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Summary



Incubators in Paris


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Definition and typology of incubators

An incubator is an entity designed to nurture business ideas or new technologies to the point that they become autonomous. An incubator typically provides physical space and some or all of the services - legal, managerial, technical - needed for a business idea to be developed

Private Incubators Public Incubators

Types of Incubators

Incubators of Ideas and Projects

Private Investors

Incubators

Corporate Incubator

Local Economic Development

Incubators

Academic and Scientific

Incubators

Actors Corporations Venture Funds Corporations Local

Government Different types

of public actors

Objectives

Business development

Return on investment by quick exit

External growth

Quick return on investment

Local economic development

Support to particular target groups or industries

Development of SMEs and clusters

Valorizing research

Technology transfer

Targets

Internal and external projects, generally related to the activity of the company.

Technological start-ups generally ICT related

Startups (external or “excubated”), generally related to the activity of the company.

Small commercial craft or service companies.

In some cases, high-tech companies.

Projects internal to institutions prior to company creation

External projects

Sources : faberNovel, Altassets


Typology of incubators

Private Incubators Public Incubators

Incubators Incubators of Ideas and Projects

Private Investors

Incubators

Corporate Incubator

Local Economic Development

Incubators

Academic and Scientific

Incubators

Offering Giving access to a working site, meeting rooms, communication, office services and secretariat, library, etc, in an environment that is favorable to innovation

Support for project management (business case redaction, public financing requests, IP, …)

Management and strategy advice

Supply of one or several types of financing and search of complementary financing.

Personal networks

Eventually :

Hosting and administrative assistance

Legal services, public relations, recruiting, etc…

Financial resources

Prototype and market testing

Access to commercial markets

Eventually :

Long-term strategic partnership

Access to multiple competencies

Hosting and shared services

Administrative assistance -consulting

Eventually :

Coaching - training- networking, access to financing

Financial resources

Prototype and market testing

Access to commercial markets

Eventually :

Long-term strategic partnership

Access to multiple competencies

Main Actors Big technological and pharmaceutical firms

Private investors (venture capitalists)

Big technological and pharmaceutical groups (via their investment fund)

Board of trades, local body

Laboratories of public research

Trends High levels of consolidation and restructuring of the sector

Still looking for a successful model

Testing of the concept in numerous companies

Likely to develop

Regular development

Increasing territorial coverage

Rapid development under the aegis of public programs.


Corporate Incubators (CI)

Corporate incubators objectives are to develop knowledge and skills on new technologies, business models and markets, and to develop entrepreneurial spirit among research divisions (strategic experimentation)

Common success factors in new corporate incubators initiatives:clear, approved and communicated expectations

Corporate Innovators key success factors *

CI Culture and Rewards CI Processes CI Resources

Top Management Sponsorship

“Failure is Success”

Directly linked incentives

Efficient end-to-end process

Institutionalized internal and external idea/deal flow

Clear cut milestones and tollgates

Transparent pursue-or-exit path

Intelligent, staged funding

CI team

CI facilities

CI services

CI funds

Sources : faberNovel, Oseo


Examples of successful corporate incubators

Early-stage accelerator

Technology Incubator


Summary



Incubators in Paris


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Incubateur Académique ESCP-EAPC/o Paris Soleillet

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Paris’ incubators in 2007

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Incubateur Académique ESCP-EAP


Agoranovwww.agoranov.com

Paris Innovationwww.agoranov.com

Telecom Parishttp://www.enst.fr/creation-entreprise/incubateur/

Paris Biotechhttp://www.parisbiotech.org/

Advanciahttp://www.advancia.fr/template.asp?chapitre=60

Paris Pionnièreshttp://www.parispionnieres.org/

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ESCP-EAPhttp://www.lenouveaucourrier.ccip.fr/Article.asp?tgt=5&id=487


Summary



Incubators in Paris


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The ESCP-EAP Academic Incubator in one slide

Owners : ESCP-EAP et AAESCP-EAP

Mission : Research lab on the process to start a new company

Objective : Development of projects and creation of innovative and/or growth companies

Type of projects concerned : all kinds, including students, at the idea / BP stage

Services offered :

Coaching (Training, Coaching, Consulting),

Hosting in some cases (real estate and shared services in the Pépinière Paris Soleillet)

Budget : mixte :

School budget (teachers + logistics)

Sponsoring and subventions (hardware + office rent)

Voluntary (coaching + expertise)

Legal type : Internal to business school (part of ESCP-EAP Entrepreneurship Chair)

A project « launched » in 2003, the structure, the place, the logistics, the first financing, experts and coaches are in place.

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Allow us now to introduce ourselves…

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faberNovel’s activities are split into 3 units

Galvanize innovative genes Carry out quickly Remain entrepreneur

XP VenturiStrategy and organization for growth and innovation

Experimentation and project management

Interal project development and investment

Assisting large groups on methodology, analysis and decision making

Innovation consulting:Innovation Strategy

Organization and innovation

Change Management

Knowledge Management

R&D portfolio management

Strategic experimentationReduction of innovation risks

Fast acquisition of key know-how and skills

Conception and development of innovative products and services

Functional specification

Outsourced project management

Conception and business validation

Evaluation and identification of partners

Piloting and feedback

Venture capital, « excubation »

Investment and development of internal projects

Company creation assistance

Capital shares offering additional action leverage

TimuzoC4Mprod

Consulting


faberNovel oversees projects from their positioning to their realization


faberNovel Consulting heads all of faberNovel’s consulting activities

faberNovel Consulting’s mission: galvanize firms’ innovative genes

OrganizationParticipative innovation (Idea Management System)Collaborative innovation (Customer Relationship Innovation ®)Intrapreneurship development

Change managementSharing best practicesCommunities animationKnowledge designTechnology transfer

StrategyGrowth strategyInnovation platformProject portfolio managementInnovation management

Prospective intelligenceTechnologiesMarketsUses

ImplementationCompetitive benchmarkFunctional specificationsPartnerships / Monetization


42, boulevard de Sébastopol I 75003 Paris I FranceTel.: +33 1 42 72 2004 I Fax: + 33 1 42 72 2003

Web: www.fabernovel.comE-mail: [email protected]

If you want to know more on this subject, do not hesitate to contact us…

http://www.fabernovel.com/




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070926 option entrepreneuriat cours incubateurs

Business

ceram sophia

market testing

eap academic

entrepreneurial

commercial

generally

french ministry

philippe albert