Business Incubator Series: An Interview With Skip Simms, President And CEO, Ann Arbor SPARK — Ann Arbor, Michigan (Part 2)

By guest authors Irina Patterson and Candice Arnold

Irina: Describe the ideal company that would benefit from your incubation?

Skip: It could be a company that’s providing a new diagnostic software that can be used in an alternative energy industry or conserved life sciences industry. It may be a company that’s working on software that helps the IT industry with manufacturing processes and procedures. It’s probably two people who have the product largely developed, but not quite finished. They have an alpha version of their product, but now they need to fine-tune it.

They may have an actual product; let’s just say it’s a device that’s two feet by two feet. To get to commercialization, their customers are going to require that the product be one foot by one foot.

So, they’ve got to go to the next iteration and develop that beta product that meets customers’ needs. They’re in need of additional management talent, maybe marketing talent.

They may still need legal advice and help with protecting their IP. They may need some pre-patent work done. We will not pay for the patents, but we do pay to help them prepare a patent.

They’re within a year of actually getting their product to market, or they’re within six months to a year of raising private equity.

Irina: Is there a limit to how long they can stay in your incubator?

Skip: No. We don’t put a hard and fast rule on it. The desire is that they would be in there six to eighteen months. Now, that’s on the SPARK Central lot. In the wet lab, those life science companies need a lot longer, and our expectation is they’ll be there at least a year, probably. They could be there three years. Who knows?

Irina: What is the financial structure of your incubator?

Skip: We’re a nonprofit public-private organization. The incubator is subsidized by various stake holders of our organization.

Irina: Any government funding?

Skip: Actually, part of our revenue comes from TIF (Tax Increment Financing) district that was set up many years ago. That’s where part of our funding comes from.

Some of it comes from corporate contributions. Some of it is paid for through grants, and those grants could be state grants or federal grants that allow us to do certain things.

The actual incubator itself, in the case of SPARK Central, is subsidized through the TIF district. The life sciences incubator, when we acquired that, came from an adjacent county. The state and a private foundation bought the facility. We operate it. We’re at about 94% capacity, which is kind of a break-even situation. The subsidy for that, if needed, will come from the state as well as our core organization.

Irina: Do you have to apply for grants every year?

Skip: Yes. Sometimes it’s annual, and sometimes it’s automatic. It’s ongoing, once we put it in place. Sometimes it’s multiple years. It varies.

Irina: How long has the incubator been in existence?

Skip: SPARK East has been around since 2008, I think. The life sciences incubator is two years old and was [started] in 2009.

Irina: How many companies have been incubated?

Skip: We currently have 19 at our life sciences incubator. At our other incubator, we currently have 12 tenants. But we have had those who have successfully graduated, if you will. We’ve probably served about 20 startups there.

Irina: In the past 12 months how many companies have been served?

Skip: At SPARK Central, it’s been 18. At the life sciences incubator, it’s 19.

Irina: Are there any other services you provide besides the ones you mentioned earlier?

Skip: Some of the companies will qualify for pre-consulting services to help them with further developing their beta product or help them with their business plan and strategy for going to market or their overall business model. They get consulting help with preparing their plan for private investors or business partners and introductions to first customers.

Irina: Do you think your incubator differs in any significant way from other incubators?

Skip: Well, we’re different in that we do not have a particular curriculum for entrepreneurs. We’re flexible, and we teach each tenant a little differently based on his or her specific needs. Tenants come to us with different skill sets and knowledge. Some have more business acumen than others. Some are just scientists and researchers and inventors. They have a learning curve, and they need to partner with business people. On the reverse side, we’ve got business people who need a little help on the product development side.

This segment is part 2 in the series : Business Incubator Series: An Interview With Skip Simms, President And CEO, Ann Arbor SPARK — Ann Arbor, Michigan
1 2 3 4 5 6