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Panel: Incubators a key to success

Directors of programs designed to nurture budding businesses speak at COC on Wednesday

Posted: March 30, 2012 1:55 a.m.
Updated: March 30, 2012 1:55 a.m.

Incubator Experts Stan Tomsic, standing, Mark Lieberman and Joey Briglio, right, hold a panel to discuss the benefits of incubators for small business at The University Center at Valencia Campus of College of the Canyons on Wednesday.

Startups should take advantage of the many incubators popping up and expanding all over Southern California, said three incubator directors in a panel hosted Wednesday by the Small Business Development Center at College of the Canyons.

The panel came three weeks after the City Council approved creating a local business incubator of its own, as part of the city’s 21-Point Business Plan. Incubator would provide office space and business training for 10 technology-oriented startups. The businesses would last in the program for one or two years before moving on.

“Incubation is still one of the best-kept secrets as a resource,” said Stan Tomsic, chairman and co-founder of the Business Incubation Network of Southern California.

Incubators are physical — and, occasionally, virtual — programs for startups and entrepreneurs, and the services can include office space, lab and equipment access, mentoring and opportunities to network and brainstorm with the other startup tenants.

The majority of incubators are technology and mixed-use, but there are incubators for medical, biotechnology, manufacturing, kitchens and fashion. They’re funded through various sources, including local governments, grants, private donors and venture capitalists.

Typically, the goal of an incubator is to help a young company grow by providing business resources and access to funding opportunities so that it can eventually move on as a fully operating company.

“We’re just a weigh station,” said Mark Lieberman, director of the Business Technology Center of Los Angeles County. “Get you in, and get you out.”

And incubators tend to create more successful entrepreneurs compared to startups that just go at it alone. Tomsic said 87 percent of companies that went through incubators are still alive after five years, compared with just 47 percent of companies that did not enter an incubator.

The proposed incubator in Santa Clarita would be under the city’s umbrella, similar to the way the city of Ventura operates the Venture Ventures Technology Center. V2TC is a 10,000-square-foot facility with suites and flexible office space with Internet, break rooms, audiovisual equipment and parking included.

Joey Briglio, V2TC’s executive director and a sustainable-business developer for the city of Ventura, said Santa Clarita mainly just wants to know how many jobs are created and how many startups are helped through the incubator.

When an incubator first opens up, the focus is to get those first startups as tenants, but now V2TC’s priority is to “graduate” the successful startups and bring more in, Briglio said.

Additionally, retention is a large part of any economic-development department and an incubator run by a city wants those graduates to settle in the city and keep the jobs in the area.

Lieberman said there’s also a sense of community between the tenants at the Business Technology Center, which is run by Los Angeles County and is one of the oldest and largest incubators in California.

The 40,000-square-foot facility opened in 1998. And sometimes this sense of community results in partnership: For example, a gaming company and a cloud-computing company connected at one of the regular CEO roundtables held at the BTC, and now the cloud-computing company hosts some of the games.

“It just happened because they were sitting together,” Lieberman said.

While the plan for the Santa Clarita incubator is in its infancy, there are three solid indicators of whether an incubator will succeed or fail, Tomsic said after the discussion.

First, an incubator needs commercial support and corporate sponsors to provided mentoring, funding for incentives within the incubator (some offer subsidized rent, free Internet or break room accommodations), as well as credibility for the program when marketing to potential tenants.

Second, incubators that failed lacked government support and recognition on the local, state and federal level from their representatives. Santa Clarita leaders need to publicly support and market the incubator, or else it becomes tough to fill the space and stay afloat, Tomsic said.

Finally, the incubator needs to be run by someone with entrepreneurial expertise but the program needs an educational backing to provide quality expertise in research, development and technology.

It’ll take a while for the incubator and the startups inside it to become successful.

“It’s a process,” Tomsic said.



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