Business

Incubators in India
What are Business Incubators
 Incubation is a dynamic process of business
development.
 Incubators nurture young firms, helping them to
survive in their early stage.
 Incubators provide:
 Infrastructural support i.e. office space, meeting room
 Platform to do networking
 Management assistance
 Other support services, specific to incubators
Source: http://www.1000ventures.com/presentations/business_incubators.html
Benefits of Incubation
 For Tenant Companies
 For Corporate World
 The new technology / product gets developed
 Informed investment choice
 Possibilities for takeover
 For Govt.
 Economic development
 Social benefits
 Encouragement to innovate
Model
 Linear Model of Innovation:
 Origin of all innovation lies in Research activities
 Role of universities
 Since Universities receive Govt. grant, so ideas of
current national interest incubated
 Apart from R&D support, managerial support also
required to develop business
 Commercial feasibility to the ideas
 Networks in suitable places can prove handy
Indian Scenario
 Incubation at nascent stage
 Mostly in a college / university, e.g.
 TREC – STEP (NIT, Trichy)
 Society for innovation and entrepreneurship (IIT –
B)
 Technology Business Incubators – IITD
 TBI@KEC (Kongu Engg. college, TN)
These incubators provide technological support
 STPI (Software technology parks)
 CIIE, IIMA
 Main Activities :
Example
 Incubate early stage entrepreneurial ventures based on
technology and innovation.
 Create physical infrastructure and support systems
necessary for business incubation activities.
 Facilitate networking with professional resources, which
include mentors, experts, consultants and advisors for the
incubatee companies.
 Identify technologies/innovations which have potential for
commercial ventures.
 Promote and foster the spirit of entrepreneurship.
 Carry out activities that facilitate knowledge creation,
innovation and entrepreneurship activities.
STP
 insoftware sector
 Objectives of STPs are
 To establish and manage infrastructure resources i.e. Data
communication facilities, core computer facilities
 To promote development and export of software services
 Fast clearance (single window) for statutory services
 To train professionals
Taking examples from Europe
 Extensive network of incubators
 Incubators in or near by famous universities
 Provides technical and R&D support
 Some expertise to offer
 Management
 Technological
 Networks

 Infact, Incubators position themselves according to

the additional expertise they offer
 Platform to pitch to VCs and PE funds
 Help in preparing pitches
 Incubators have some VCs as either stakeholders or Board
members
 Incubators develop good track record and rapport with
certain VCs
 Network among Incubators
 Incubators develop network among themselves
 Help them in utilizing networks with VCs and other
research firms
 Some examples: Manchester Business school
incubator, IT univ. of copenhagen, London science
park etc.
The way ahead

 Govt. initiatives to develop incubators

 Public-Private partnerships
 Some benefits and sops to develop and manage incubators
 The return in this business (incubators) come after a gap of
time, Govt. needs to fill this gap in PPP
 Indian
incubators have to think beyond R&D assistance
 Networks with VCs and other firms also required
DST- Incubator
 The proposal to be submitted by an Academic/Technical/R&D Institution [called
Host Institute (HI)] and other institutions with a proven track record in promotion
of technology based entrepreneurship. The host institute is supposed to have
adequate expertise and infrastructure to support incubation activity.
 The host institution should be in existence for at least 3 years. This will not apply
to entities created by the central government or state governments.
 A Pure R&D proposal for academic pursuits and industrial consultancy will not
be eligible for support
 TBI would be extended to a not-for-profit legal entity registered as a
society/trust/section 8 company
 10,000 sq. ft. of built up area to be provided on lease for a minimum period of 15
years.
 Maximum limit of 5 Cr over 5 years
 Proposal
1. Host Institution’s Strength
2. Past activities relevant to Incubation and Entrepreneurship
3. Best five Industrial Consultancy or Technology Development /
Innovation
4. Patents, Awards & Recognitions, Products Developed /
Commercialized
5. Team Strength
6. Incubation Model
7. Space Available
8. Target Milestone
9. Financial Outlays
10. Means of Financing
11. Revenue Generation Projections
Incubation Model
Potential
Incubatees

Entrance Policy
Business Concept Service To Be Provided
involving • Secretarial
• Market •Funding Start-up
technology Business
Acceptable linkages mechanism
•Legal & IPR •Mentorship
written business •Feasibility
plan

Exit Policy Capital raising

specialist
 Typically “Graduate” within  Marketing &
2-3 years strategic planning
Graduation  Companies may stay longer advisor
or shorter periods depending Consultant and
upon the extent to which they advisors to R & D
can demonstrate growth. industries
Thank You !!