IMPACT INDEX

The IMPACT Index is a survey about the economic impact of incubators, accelerators, coworking spaces, and other types of entrepreneurship centers in communities across the United States.  This page contains initial visualizations of the data collected thus far.  The majority of respondents representing the entrepreneurship centers serve in senior management positions.  A new intake cycle for the last fiscal year is opening soon.

This report includes data from 248 participants.

While there are 248 complete responses, sample sizes for individual analyses are shown below (n).

CENTER BACKGROUND

The following graphs demonstrate the diversity of the survey’s respondents, particularly by their location within the US, the population density of the area in which they are located, and the type of entrepreneurship center they most identify with.  Additionally, this section contains information on center clients/tenants.

ABOUT THE ENTREPRENEURSHIP CENTERS

REGIONAL DATA

Respondents came from every region of the US, even outside the continental United States, with representatives from Hawaii and Puerto Rico.

To date, the largest representation of respondents hail from the Southeastern United States.

ENTREPRENEURSHIP CENTER TYPE DATA

The survey asked participants to select the Entrepreneurship Center type they most identified with.

The pie chart on the right shows the distribution of respondents by EC type.  As shown, the majority of respondents to the survey are incubators.  The “other” category includes coworking spaces, Small Business Development Centers (SBDCs), technology transfer organizations, branded third-party ECs, and higher education academic departments.

For full definitions differentiating each type of center that responded to the survey, please visit: https://inbia.org/wp-content/uploads/2016/09/Terms_4.pdf?x84587

ENTREPRENEURSHIP CENTER CORPORATE STRUCTURE

Survey participants were asked to select the organizational structure that best describes their organization.  The majority of respondents were non-profit organizations.

ABOUT CLIENTS/TENANTS AND FOUNDERS

SERVICE AREA

Survey participants were asked to identify the population density that describes their main location:

  • Rural: Less than 150 citizens per sq/km, less than 50,000 citizens in total region
  • Mid-Density (Suburban): Between 150 and 2,250 citizens per sq/km, less than 750,000 citizens in total region
  • High-Density (Urban): More than 2,250 citizens per sq/km, over 750,000 citizens in total region

Additionally, participants were asked to share the geographic range of their clientele.

The figure on the right shows the share of entrepreneurship centers within each geographic type with clients originating from a particular area.  As shown, the largest category for all geographic types was the multi-county region.  However, differences do exist among the geographies where urban areas have a higher proportion of city-based clients.

INDUSTRY SEGMENTS REPRESENTED BY CLIENTS/TENANTS

Participants were asked to select up to three industry segments that most represented their clients/tenants or the industries that the organization recruits from.

The most common response was that the EC is “mixed use,” followed by software/internet/mobile applications and biotechnology.  Given the role of the biotechnology incubator as a large segment of incubators, as well as the proliferation of mobile software technology in the startup realm, this result is not surprising.  The results also demonstrate the breadth of industries served by ECs beyond those that are technology-based.  This includes retail, art and fashion, and social ventures.

ORGANIZATION FOCUS

Many Entrepreneurship Centers have a demographic or geographic focus for their clientele.  Participants were asked to select any particular demographics/representations of entrepreneurs/founders they specifically target or focus on serving.   Participants selected all that apply.  Selections included:

  • No specific demographics or geographies
  • College or university students
  • Economically underserved populations
  • Foreign/international companies
  • Minority populations
  • Native Americans
  • Women
  • Youth

The most common foci were minority and women entrepreneurs.

CENTER FINANCIALS

The following data visualizations explore the financial, staffing, and other operational elements that sustain entrepreneurship centers around the US.

OPERATIONS – FINANCIALS 

ENTREPRENEURSHIP CENTER TOTAL ANNUAL FUNDING/REVENUE

Participants were asked to indicate the average range of their organization’s annual funding/revenue in USD, including money received via subsidies.

The majority of respondent ECs operated with less than $500,000 in annual funding/revenue.  This has interesting implications for the level of services offered to clients as well as the staffing that organizations are able to obtain.  The figures below indicate the source of funding/revenue, as well as how those funds are spent.

*Note: this does not correspond to the revenue of client/member companies.

TYPES AND PERCENTAGES OF FUNDING/REVENUE SOURCES

Participants were asked to indicate how much of their funding/revenue was derived from the following methods:

  • Membership/rent for office space
  • Educational program offering participation fees
  • Event and networking program revenues
  • Corporate sponsorships/subsidies
  • Donations
  • Returns from client equity
  • Grant funding from government agencies
  • Grant funding from corporate/philanthropic foundations

The results indicate that respondent ECs received funding/revenue from multiple sources.

The largest funding/revenue sources among respondents were rent and government grants.

TYPES AND PERCENTAGES OF GOVERNMENT-BASED FUNDING/REVENUE SOURCES

Participants were asked to indicate how much of their funding/revenue came from the following government sources:

  • Local government or economic development agencies
  • State/province government or economic development agencies
  • National government or economic development agencies
  • Universities

The figures show that the largest government-based funding/revenue sources for participants were local government or economic development organization grants as well as university funding.  The result is a high incidence of locally-sourced funding for ECs within an entrepreneurial ecosystem.

ENTREPRENEURSHIP CENTER ANNUAL EXPENSES

Participants were asked to indicate the range (in USD) of their total annual expenses.  These results are consistent with the EC funding/revenue distribution.

CATEGORIES AND PERCENTAGES OF ANNUAL EXPENSES

Participants were asked to share the percentage of their operating budget allocated to each expense category.  Categories include:

  • Staff salaries
  • Facility mortgages/leases/rent
  • Utilities/internet/telephone
  • Education or training for staff
  • Legal and/or accounting
  • Consultants/outside contractors
  • Marketing
  • Event costs

The single largest expense category among respondents was salaries.

FACILITY OWNERSHIP

Participants were asked to indicate whether they own, lease, or share their brick and mortar center facilities.  As shown, the largest category is “own” followed by “lease.”

ENTREPRENEURIAL ECOSYSTEMS

The next section of the survey focuses on how the entrepreneurship centers relate to their ecosystems and beyond, specifically through their mentor program (if offered).

NETWORK AND INTERCONNECTEDNESS

Participants were asked whether they are affiliated with one or more local stakeholders, such as universities/colleges or private corporations.

ACADEMIC INSTITUTION PROVISIONS

Participants were asked to select all that apply from the following list of provisions for how their entrepreneurship center benefits from an affiliation with an academic institution:

  • Space at no cost
  • Discounted space
  • Sole center funder
  • One of many center sponsors
  • Assets, education programs, or other client services
  • Host an NSF-sponsored i-Corps program
  • Center supports institution’s Technology Transfer Office

As shown, the most common provision category was assets, education programs, or other client services, with 50 percent of survey participants benefiting.

ACADEMIC INSTITUTION FUNDING

Participants were asked to share how their academic institution affiliation(s) help fund their center, with the following selection options:

  • Dedicated building/real estate
  • Office or desk space for clients
  • Program or operational funding
  • Startup funding (grants, loans, or seed funding)

OFFERING A MENTOR PROGRAM

Participants were asked whether they offer a mentor program, planned to within the next six months, or did not offer one.

Given the efficacy of mentorship in entrepreneurial development, it is surprising that 40 percent of respondent ECs did not offer a mentorship program at the time of the survey.

MENTOR BACKGROUNDS

Participants were then asked to identify the background of their mentors and to share how many mentors of each background type were in their mentor program.  Background experience selections included:

  • Experienced entrepreneurs, non-technical industries
  • Faculty researchers
  • Experienced entrepreneurs, technical industries
  • Technical experts with small business experience
  • Angel or venture capitalists
  • Fortune 1000 corporate leaders
  • Lawyers
  • Bank or private equity executives
  • Accountants
  • Human resource professionals

ENTREPRENEURSHIP CENTER GOALS

Entrepreneurship centers operate with specific goals for their clients and the entrepreneurial ecosystems in which they are located.  The survey asked respondents to rate the importance of the following goals to their organization from “Very Important” to “Very Unimportant”:

  • Achieving Welfare to Work
  • Fostering Corporate Innovation
  • Generating Investor Returns
  • Commercializing University Research
  • Encouraging Women and Minority Entrepreneurship
  • Growing a Local Industry
  • Job Creation
  • Growing Local Entrepreneurial Culture

The results indicate that ECs pursue multiple goals simultaneously.

CENTER OPERATIONS

The following section of the survey highlights the programming, services, and facilities/assets that America’s entrepreneurship centers provide to their entrepreneur clients/tenants.

STAFF, BOARDS, AND VOLUNTEERS

STAFFING INFORMATION

Participants were asked to identify which of the following types of staff they employ:

  • Senior level staff (directors and above)
  • Full-time operations staff
  • Part-time operations staff and/or contractors
  • Paid mentors and/or entrepreneurs-in-residence
  • Student interns

Nearly all respondents employ full-time and director-level staff members.  Also popular was student interns, who may serve as a non-cost labor source to organizations with lower funding/revenue.

ADVISORY BOARD BACKGROUNDS

Participants were asked to identify the backgrounds and experience of their board members, as well as how many of their board members had the following backgrounds:

  • Angel or venture capital investors
  • Bankers
  • Corporate/industry experts, non-technical
  • Corporate/industry experts, technical
  • Experienced entrepreneurs or business owners
  • Government or economic development leaders
  • University leaders or researchers

EDUCATIONAL/TRAINING PROGRAMS

Participants were asked which of the following educational or training programs they offered to their clients, as well as the frequency of each offering.  Selections included:

  • Business fundamental workshops
  • Business plan development workshops
  • Raising capital workshops
  • Small Business Innovative Research (SBIR) or Small Business Tech Transfer Research (STTR) grant development workshops
  • Technology education workshops
  • Commercialization workshops for student/faculty

SEED FUNDING ACTIVITY

SEED FUNDING OFFERINGS

Participants were asked if their center offers, or plans to offer within the next six months, an affiliate seed fund that provides cash in exchange for equity in startup companies served.

Among survey participants, seed funding was relatively unpopular with only 12 percent of respondents offering seed funding at the time of the survey.  Multiple reasons likely exist for this phenomenon, which may be individual to a given center.

SEED FUNDING SOURCE

Participants that do have a seed fund were asked to share the source of their seed fund funding.  Selections included:

  • Individual investors or program partners
  • Corporate partners
  • Public or government funds

The single largest source of seeding funding among survey respondents was individual investors or program partners.

FREQUENCY

Participants were asked how often they raise their equity funds, with frequency options ranging from multiple times per year to every five years.

The figure shows that there is no dominant fundraising cycle for respondent ECs.

AVERAGE SEED FUND FIRST INVESTMENT SIZE 

Participants were asked to share their average investment size of the first round of financing invested in each company funded.

The graphic demonstrates the wide variety of funding levels offered by the respondent ECs.  No single category comprised the majority of respondents, but the single largest category was $20,000 to $49,999.  Approximately 58 percent of respondent ECs invested less than $100,000 for their first seed round.

CENTER CLIENT METRICS

The IMPACT Index survey is a reflection of the impact that entrepreneurship centers have on US small businesses or entrepreneurs considering starting a company.  The following survey questions asked entrepreneurship centers across America how their recent, as well as graduate, portfolio companies are performing in terms of revenues, investments or grants obtained, jobs created, and more.

COMPANY REVENUE REPORTS

Participants were asked to share the combined revenues (in USD) of all the companies that have participated in their programs, both current and graduated:

  • Since center inception
  • In the last 12 months

Among respondents that tracked company revenues, just over half reported total revenues in excess of $1 million.  This may be due to multiple factors, including EC size/number of clients, industry focus, and how long the EC has been operating.

GRANT FUNDING REPORTS

Participants were asked to share the amount (in USD) of grant funding obtained from non-center sources of all the companies/entrepreneurs that participated in their programs, both current and graduated:

  • Since center inception
  • In the last 12 months

The majority of client grant funding falls in the less than $1 million category.  This is not surprising given the finite nature of grants.

COMPANY INVESTMENT REPORTS

Participants were asked to share the amount (in USD) of equity capital obtained from non-center sources of all the companies that participated in their programs, both current and graduated:

  • In the last 12 months
  • Since center inception

A hot topic for ECs is the investment and associated valuation culled by client companies.  As shown, less than half of respondent ECs have clients that have received in excess of $1 million in outside funding.  However, a relatively large group of EC clients have received in excess of $20 million total.

CLIENT VOLUMES SERVED

Participants were asked how many companies/entrepreneurs/students they currently serve, as well as how many they have served since center inception.

Respondent ECs serve multiple clients with nearly half (47%) reporting serving more than 60 clients since inception.

CLIENT JOB NUMBERS

Participants were asked to share approximately how many people (full-time and/or part-time) have been employed by their portfolio companies since center inception.

ENTREPRENEURSHIP CENTER DATA ELEMENTS TRACKED

The survey asked respondents which data elements they tracked about their client/tenant companies for use in reporting as well as for internal data.  Categories include:

  • Client/Tenant Company Employees
  • Client/Tenant Company Revenue
  • Client/Tenant Company Equity Raised
  • Client/Tenant Company Grants Received

Have further questions about the survey and the data used?  Please contact the research team via email at [email protected]