1. BUSINESS INCUBATION FINANCIALS AND SUSTAINABILITY Rajesh Agrawal Director, Finance, ICRISAT

2. Business Incubation

What is it ?

Processwhich nurtures entrepreneurial companies

Helping them survive and grow during the start-up period

Providing services and resources tailored to young firms

3. Why Incubate?

Create jobs

Improves entrepreneurial climate

Accelerates growth

4. What makes them successful?

Setting up of viable enterprises

Appropriate feasibility study

Governance and management

5. How do incubators get initial funding?

Loan Fund

Grant funds from Government

Angel investors

Venture Capital Financing

6. Are Incubators worthy of public subsidies ?

Logic of market failure

In the USA $! Invested has led to anaddition tax collection of $ 30

Risk managers for donors

7. Financial and sustainability issues in incubators

Issues for Incubators

Incubators to operate as viable businesses

Practice what you preach

Effectiveness and Efficiency

Time horizon (5 to 10 years)

Funding mismatch

8. Financial and sustainability issues in incubators

Issues for Incubators

Financial self sustainability

Incubation model mismatch

Critical mass of users available or incubation to create demand

9.

Revenue Models

Payment of tangibles/ non tangibles to bebundled with rent etc.

Rental model

Capital gain model

Adoption to local environment

10.

Revenue Options

Consulting

Training

Risk of mission drift

Diversified revenue sources

11.

Trade Offs

Trade offs between impact and sustainability

Both are important

Their order is important

Sustainability sets an example for hosted clients

Incubating the incubators

12. Stage in Business Cycle 13.