Business Incubator Series: Micah Kotch, NYC ACRE At NYU-Poly, New York (Part 2)

By guest author Irina Patterson and Candice Arnold

Irina: At what stage do you usually prefer that businesses apply for incubation?

Micah: We like to see them before they’ve closed their Series A round of funding, so anywhere between friends and family [funding] and revenue.

Companies can come in with some revenue. But if they’ve closed their A round and they’re already more than 15 people, then they’re probably too late.

We do like early stage, growth stage companies. We prefer them to have some validation, some proof points. This can take the form of revenue and customers, or it can take the form of grants, you know, the NSF (National Science Foundation) or the NYSERDA or NIH (National Institutes of Health) or any of those agencies that have helped to validate the approach. That’s a plus. DARPA is another one, the Defense Advanced Resource Projects Agency.

Many companies will approach the public sector for funding before they go out for private funding. These agencies are grant-making institutions that could help get the companies to a point where they can validate their technology or demonstrate feasibility.

The SBIR (Small Business Innovation Research) program is another good example of agency validation for technology.

A grant from any of those agencies is one of the things that our advisory board likes to see.

Irina: Would you describe what would be the ideal company you are looking for?

Micah: It would be a very capital efficient, IT driven, technology company run by a founder who’s a serial entrepreneur, who’s successfully raised capital and exited a company in the past, who’s collaborative and eager to participate in the community we have here. I would say that’s the ideal company.

I really don’t care what vertical they’re in as long as they’ve done some customer development, which is a thing that we’re a big fan of, the idea that the answers are not in the building.

They’ve actually gone out and spoken to 30 potential customers. They’re working on not just developing a new product but on developing their customers.

Irina: How many companies have you incubated to date?

Micah: We have eight companies that have graduated from the program since 2009.

Irina: How many companies does the incubator have right now?

Micah: Currently, we have 36 companies, and that includes virtual tenants and physical tenants. We have four virtuals.

Irina: What are the core benefits that your incubator provides?

Micah: In terms of the services, we provide three key things.

We provide access to talent. That takes the form of student interns from the university as well as mentors and entrepreneurs-in-residence; it’s the human capital that we provide.

We provide access to financial capital, introductions to angels, venture investors, others, family offices, some of those nontraditional sources of funding like the agencies I was referencing before.

The last thing, which we think most important, is access to customers … introductions to pilot customers.

Irina: Can you think of something specific that makes your incubator different from other incubators?

Micah: I would say that the quality of the tenants here is unique. I think success breeds success. There’s a healthy level of competition here. I think we’re defined by the quality of entrepreneurs.

Those entrepreneurs have raised roughly $26 million in the past two years and created a significant number of jobs. The breakdown on the jobs numbers is: We’ve had 76 founders since 2009. We have, in terms of the full-time employees, 140 new full-time employees and then about 240 part-time employees and interns who’ve been hired or are working out of this space. There really are metrics behind what we’re doing.

Irina: How do entrepreneurs find your incubator?

Micah: We get referrals through the New York City Economic Development Corporation (NYCEDC), through the New York City Investment Fund (NYCIF), and through many of our own tenants.

Irina: Is your application process ongoing?

Micah: It’s ongoing, correct.

Irina: How long does it usually take to process an application?

Micah: Usually, it takes about two months.

Irina: How many applications do you usually receive each month?

Micah: Roughly, ten.

Irina: And how many usually get in?

Micah: At this point, we have a waiting list. That’s because we’re full.

Irina: How many out those ten applicants are eligible to get on the waiting list?

Micah: Maybe three. We have about 15 people on the waiting list right now.

This segment is part 2 in the series : Business Incubator Series: Micah Kotch, NYC ACRE At NYU-Poly, New York
1 2 3 4