All of the companies are working in fields related to medicine, Ms. Mellitz says. Incubators often function independently of their sponsoring universities. Sometimes, they are an outgrowth of a university research park, which can itself be a public-private venture. And most incubators have committees to screen companies wanting to locate there. Ideally, incubator managers hope to see companies move out on their own within about three years.
Some incubators increase the rent every year to nudge tenants toward the street.
But policies vary. For example, at the biotechnology-oriented incubator at the University of Alabama at Birmingham, companies can stay until their products get approved by the U.S. Food and Drug Administration, even if it takes a decade. Financing models for university-related incubators are changing. Until recently, most emerged from economic-development efforts by states, regions, or localities. Now, private investors are playing a bigger role.