Stakeholders of your university incubator are those individuals or institutions that may directly or indirectly be affected by or have an effect on the incubator. “The support of stakeholders is a critical factor in successfully establishing and operating incubators.” (European Commission, 2002)

During the foundation phase is the university, as an original promoter of the incubator, also a stakeholder of the proposed incubator project (for example in the position of founder / co-founder).

Main stakeholder groups, which should be identified through a stakeholder analysis at initial stages of the process of establishing your university incubator, include:

1. Customers of the university incubator:

• sponsors of the incubator,
• (end) users of the incubator.

2. Collaboration partners:

• stakeholders that must be engaged to fulfill incubators mission and goals,
• other organizations serving the same customers (important is to identify possible ways to complement rather than compete with them).

Figure: Stakeholder groups of university incubator

Understanding incubators stakeholders often goes hand in hand with clarifying objectives of your incubator. Different wider purpose and objectives of the incubator attract different users, different potential co-founders and sponsors of the university incubator as well as potential partners for collaboration as drafted in table below.

For more information, please see the block Mission and Goals – Why are we founding our incubator?

At the same time, the customers and collaboration partners of your university incubator change in time as the incubator develops. Different incubator phases – or its stages of development require different key customers and collaboration partners to grow and become successful.

Sponsors of university incubator

During the foundation phase, it is especially important for the incubator to attract one or more institutional sponsors (public, private or public-private entities), which will fund or co-fund the development of the incubator until it achieves enough financial sources from paying users of the incubator and its services. They can but do not have to act as co-founders of your university incubator.

According to a report commissioned by the European Commission which benchmarked business incubators (Centre for Strategy and Evaluation service, 2002), “incubators are more likely to succeed when supported by a broadly-based partnership of public and private sector sponsors.” Usually, initial funding of the incubator programs is provided by public authorities. “Particularly in the initial stages, public sector funding is critical to ensure that incubators become operational” (The World Bank, 2010).

Potential sponsors of your university incubator in its foundation phase may include organizations such as economic development agencies on local, regional or national level, NGOs, business organizations or other private investors, who / which share the wider purpose and objectives of the incubator. Different potential sponsors of the incubator in its foundation phase according to incubator goals and its wider purpose include:

• Government entities seeking economic improvement in the region, creation of jobs and exports, such as policy makers and political decision-makers who can influence the enactment of fundamental changes to laws, processes, and procedures, as well as SME development and support agencies and local economic development and trade agencies. „Usually, governments are considered to be stakeholders of an academic incubator. Even if not direct founders, governments determine policies that can have an impact on the incubator. Therefore, it is valuable to understand the government’s expectations and to evaluate these against the incubator’s mandate. Where the government is considered to be a stakeholder, its needs must be addressed differently in the incubator’s marketing mix.” (Infodev Incubation Toolkit)

• International donor agencies such as The World Bank, The UN Development Programme (UNDP), the EU, Development Banks and foreign governments with economic cooperation agencies.

• Corporates / Established businesses seeking for corporate matchmaking, seeking for innovative ideas from their industry willing to support the development of specific industry (for example through charitable department or CSR department) or seeking for opportunities to collaborate with academic incubator users by selling or buying products from them, or seeking for inspirations from creative and flexible environment of the academic incubator, or participating in incubator events and trainings to support internal corporate entrepreneurship / intrapreneurship by mixing the creative innovative culture of the incubator with their corporate culture and thus gain the comparative advantage over their competitors.

• Private investors or investor groups seeking for potential companies for their investments.

• Individuals seeking to improve their community such as wealthy retirees and leaders in business, academia, and government seeking personal ways to improve their communities and to leave a meaningful legacy.

• Financial Institutions seeking the potential to benefit from small businesses with strong possibility of growth through future loans, provide significant deposits, and seek special banking assistance. Financial institutions will have opportunities to evaluate groups of young companies in an efficient way and/or may use the incubator services to accelerate the growth of the small companies in which they invest.

• Other universities / educational institutions: collaboration with other academic institutions in fulfilling shared goals containing developing entrepreneurial skills in students and university staff, encouraging technology transfer to business and technology commercialization or region development. Especially collaboration of business schools with technical universities, humanities, social sciences or arts will support cross sectoral ideation and entrepreneurship. Collaboration with universities of third age will support cross generation entrepreneurship and knowledge sharing. Through incubation process, students will have opportunities for on-the-job training in applied business practices and product development. The faculties will have opportunities to build internship programs for their students to enhance their curriculum, and will have opportunities to consult and use the incubator practices for research and publications.

• (Business) networks and non-profit organizations, which may have a mission that can benefit from the existence of the academic incubator. Such groups as chambers of commerce, trade unions, industry associations, and job training centers are obvious potential targets for partnerships with the academic incubator.

After foundation phase, in which the incubator successfully manages to run its activities, comes the development phase, in which the incubator needs to focus on increasing its portfolio of customers by its paying users. At this stage, it is advantageous not only to maintain its current customer base (sponsors of the incubator), but the incubator needs to attract entirely new set of customers – its users who are willing to pay for using incubation services.

Since the main user of the university incubators are students, university staff and the start-up companies, they are usually not able to pay for the full costs of services offered. University incubators are therefore forced to find ways how to compensate for these revenue shortfalls. This can be done for example by offering paid services or facilities (incubation program, lectures, trainings and workshops, participation on events, office space…) to external users (individuals, established businesses or corporates). Users of the academic incubator must be served in sufficient numbers to meet the stated goals of the incubator and expectations of sponsors. In our survey we asked university incubators who they targeted as incubates. Results show that most university incubators serve a range of groups – students, staff as well as individuals and firms external to the university. Almost all of our university incubators aim to help students with starting up businesses (SUPER survey report 2016). 

Possible users of your university incubator with respect to its objectives can include:

• Participants of incubation / acceleration programs: students, alumni, academic staff and external clients seeking support in developing entrepreneurial skills through working on own businesses;

• Research teams of the university seeking commercialization of their research outputs, support through mentoring, specific facilities (laboratories, etc.);

• External customers using incubator paid services and facilities including organizations (corporates / established businesses) as paying customers participating in incubator events, trainings or programs or using its services for example to support internal corporate entrepreneurship / intrapreneurship by mixing the creative innovative culture of the incubator with their corporate culture or seeking university – corporate matchmaking. It is also possible to convert initial sponsors from funding donors to paying incubator users by delivering them specific services or programs under contract;

• Public - fees for special projects (speaker series open to public, training programs for public…).

Figure: Sources of financing / revenues of an incubator depending on stages of incubator development

Dee et al (2015) mentions three core strategies used by incubators to finance their activities:

• Independent,
• fee-driven and
• growth-driven strategy.

For more information about these strategies focused on obtaining revenues please see the block Business Models - How do we make our endeavour sustainable?

Ideally, once the university incubator has reached the mature incubation stage, it is no longer dependent on the generosity and (political) goodwill of its sponsors for continuing investment. In order to retain its customers and continually grow its customer base, the university incubator needs to achieve a performance level that satisfies its users and communicate the performance outcomes effectively.

Table below shows different stakeholder groups according incubator goals.

In addition to identifying paying customers, your university incubator also needs to do the same with respect to additional stakeholders who may not contribute cash, but who may provide non-cash value that is critical to the success of the incubator. Authors of Infodev Incubation Toolkit identified following activities of collaboration partners that can support the incubator in performing its own enterprise functions:

• Participating in the incubator’s board of directors;
• Providing volunteer staff support, for example in managing operations and managing the physical facility;
• Communicating with and conducting promotional activities to current and potential customers and other stakeholders; and
• Providing services, knowledge, training, mentoring, coaching, and counseling to incubator companies.

Potential collaboration partners of your university incubator may include:

• Government entities, SME development and support agencies and local economic development and trade agencies. „Usually, governments are considered to be stakeholders of an academic incubator. Even if not direct founders, governments determine policies that can have an impact on the incubator. Therefore, it is valuable to understand the government’s expectations and to evaluate these against the incubator’s mandate. Where the government is considered to be a stakeholder, its needs must be addressed differently in the incubator’s marketing mix.” (Infodev Incubation Toolkit);

• International donor agencies such as The World Bank, The UN Development Programme (UNDP), the EU, Development Banks and foreign governments with economic cooperation agencies;

• Corporates / Established businesses;

• Private investors or investor groups;

• Individuals seeking to improve their community;

• Financial Institutions;

• Other universities / educational institutions;

• (Business) networks and non-profit organizations.

Issues to think about:

Which companies or individuals might share the mission and wider purpose of your university incubator?

Which companies or individuals might be interested in collaboration with your university incubator?