With few barriers to entry, capital providers could play in the Internet space and thus diversify their portfolios. The problem is that people financed businesses that should not have received funding. In our survey, we found that many people were uncomfortable being called incubators. Nearly all incubators offer a suite of resources and services such as physical space, information technology, coaching, accounting and legal services, marketing, and public relations. In some cases, these are offered for free, while in other cases, there's a charge.
Some incubators have their own funds to invest, while others form alliances with VCs.
Generally, incubators sprang up because they were able to devote the time and attention to early stage ventures that VCs couldn't. That process is likely to survive. The ability to institutionalize connections to the key movers and shakers is new. Some incubators will endure because they not only bring facilities, services, coaching, and money, they also facilitate access to key companies. Speed was particularly key in the Internet space.