There are more than 900 incubation programs in the United States, compared with only 12 in 1980. Recent media attention has focused on for-profit incubator programs, which have been opening at a rate of four to six per week. However, for-profit incubators are only one variation of the incubation model, making up approximately a third of all incubation programs, Adkins said. Whereas most for-profit incubators are set up as investment vehicles for investors, other types of incubation programs achieve different goals, such as commercializing new technologies from universities, diversifying local economies, servicing minority entrepreneurs and creating jobs. And increasingly, incubators are being established to grow companies for a particular market niche, such as gourmet foods, biotechnology or the arts.
Incubators also differ in compensation structures.
Whereas most for-profits take an equity stake, the vast majority of incubation programs still only charge fees for space and services. Both types of incubators offer assistance with financing, but for-profits are more likely to have access to in house investment funds. If the business incubation model is appropriately adapted and utilized, it works. Another factor contributing to success appears to be whether incubation managers and staff avail themselves of professional development opportunities. A recent study found that NBIA members served twice as many client companies and graduated twice as many successful startups as non-members.