Thinking about starting a company after 50? You might want to get some smart advice and assistance from a business incubator or an accelerator.
Incubators are programs intended to reduce start-up costs for entrepreneurs and nurture their businesses as they get up and running over the first one to five years. Accelerators are typically focused on launching tech companies (sometimes called “gazelles”) by providing cash and a burst of expertise for three to six months.
Here’s how incubators and accelerators work and how you can take advantage of them:
These are typically supported by colleges, economic development corporations, community-based groups and state and local governments. Examples include TechTown at Wayne State University in Detroit, described in a Next Avenue article by Chris Farrell; Babson College's Butler Venture Accelerator in Wellesley, Mass., and San Francisco; and the Blackstone Charitable Foundation's LaunchPad, first created at the University of Miami, with additional programs in Detroit and northeast Ohio.
Incubators provide: subsidized office and industrial space; mentoring from accountants, marketing consultants and business and legal advisers; support services, like phones and Internet; and business planning, management and strategy development, as well as educational workshops and networking events.
(MORE: What Over-50 Entrepreneurs Say About Going Solo)
Often the only barrier to entry is whether you can afford the rent, which typically runs $25 to several hundred dollars a month. Your space could be anything from a refurbished warehouse with a rabbit warren of cubicles and an ersatz "kitchen" (coffee maker and powdered milk) to a state-of-the-art green sanctuary with gourmet catering.
Paul Tasner credits Dominican University's Venture Greenhouse, an incubator for social and environmental entrepreneurs in San Rafael, Calif., for helping him launch PulpWorks. The entrepreneur's company creates compostable products molded from 100 percent post-consumer waste paper. "We turn garbage into safe, planet-friendly products for protective packaging and countless other products," Tasner says.
Tasner, a green proponent who has worked as an executive at companies from Clorox to California Closet, says Venture Greenhouse gave him a huge boost. “I have a lot of experience, but none in business ownership, so I was looking for real hands-on mentorship from seasoned professionals and like-minded environmentalists,” he says.
Nearly half the clients in Greenhouse’s 12-month residency program are in their 50s, according to John Stayton, the incubator’s founder and director. Aside from desk space and advice, Greenhouse also offers access to financing through the local investment community, including connections to venture capitalists, angel investors, banks and other lenders.
Kevin Doyle Jones, founding principal of the Good Capital investment fund and founder of HUB Bay Area, the largest incubator in the global HUB network, believes the wide age spectrum at these advisory programs is a huge plus.
“Rather than isolate the 50-plus entrepreneurs in an incubator of their own," he says, "I see tremendous, co-mentoring opportunities to be gained by creating environments where older entrepreneurs with their life/work experience can work side by side with their younger counterparts' wealth of technology and media marketing skills to launch exciting and even more sustainable new businesses."
You can look for an incubator near you at the website of the National Business Incubation Association. To size up the strengths and weaknesses of potential incubators, use the Evaluation Checklist at 1000ventures.com.
Business accelerators share many of the characteristics of incubators, but they’re typically financed by serial entrepreneurs, angels and venture capitalists who offer initial seed money of up to $100,000. Enrollees are then connected to other venture capitalists willing to invest larger sums in exchange for a 6 to 7 percent equity stake in the new business.
"They’ve become so popular that about one accelerator a day launches these days," says David Cohen, head of one of the hottest, TechStars, which has programs in Boston, New York, Seattle and Boulder, Colo.
But accelerators aren’t just for young digerati.
David Thomson joined the Accelerator Centre in Waterloo, Ontario, at 58 early last year. “I was the oldest guy there,” recalled the former McKinsey consultant and author of Mastering the 7 Essentials of High-Growth Companies. (Sadly, Thomson suffered a heart attack and died earlier this summer.)
Even though Thomson lived in Kansas City, he felt the weekly commute to Waterloo (headquarters to Research In Motion, the company that makes the BlackBerry) would be worth it. And it was.
Thanks to Accelerator Centre, Thomson opened ActivDox, which transforms document management via the convergence of tablet devices, wireless communications and cloud computing. "The center’s public/private ecosystem of support, research and development was superior even to that in Silicon Valley," he said.
Accelerator Centre encourages entrepreneurs over 40 and is big on networking, featuring frequent "Lunch and Learn" events where chief executives, like Blackberry co-founder Jim Balsillie, share their expertise.
(MORE: Do Your Homework Before You Buy a Business)
The new website, f6s.com, is an excellent place to find more than 150 accelerators and related programs in North America, along with application dates for them.
8 Questions to Get Answered
If you’re considering working with an incubator or accelerator to get your business off the ground, ask the program coordinator to answer these questions first:
1. What kind of workspace do you offer and how would that fit the kind of business I’m planning?
2. What are the qualifications and costs to join?
3. Will you provide any seed capital? If so, how much?
4. What are some startups the program has launched?
5. What’s the level of expertise among mentors?
6. What kind of administrative, operational and technical support services will you provide?
7. What types of educational and networking events are offered by the program? How often do you hold them?
8. And most important: What’s the track record for success of your graduates?
Next Avenue Editors Also Recommend:
- Entrepreneurship Is Down, but Not for Boomers
- Do Your Homework Before You Buy a Business
- The Career Tip to Follow Your Passion: Is It Bunk?
If so, thank you. Your financial gift helps us fulfill our mission of being an essential source of news and information for older adults. Just as important, your contribution demonstrates that you believe in the value of our work. We have a lot of exciting things planned in 2020 and we need your help to make sure they happen.
Haven’t given yet? Please make a gift today and help us reach our end-of-year goal — any amount helps. Thank you.