Incubators provide hands-on management assistance, access to financing and orchestrated exposure to critical business and technical support services. They also offer entrepreneurial firms shared access to equipment, flexible leases and expandable space—all under one roof.

Almost half of all North American incubators receive their primary funding from government and nonprofit organizations, and are primarily for economic development. This mission includes job creation, economic diversification and/or expansion of the tax base.

Here are some of the sponsors that make up the other half of the funding:

Academic-Related
Thirteen percent are affiliated with universities and colleges and share some of the same objectives of public and private incubators. In addition, they provide faculty with research opportunities, and alumni, faculty and associated groups with start-up business opportunities.

Hybrid
Eighteen percent are joint efforts among government, nonprofit agencies and/or private developers. These partnerships may offer the incubator access to government funding and resources, and private sector expertise and financing.

Private
Twelve percent are run by investment groups or by real estate development partnerships. Their primary interest is maximum profit for investment in tenant firms, new technology applications and other technological transfers, and added value through development of commercial and industrial real estate.

Other
Eight percent are sponsored by a variety of unconventional sources such as art organizations, Indian tribes, church groups, chambers of commerce. etc. These are part of a growing number of incubators targeting specific industries, minorities, and women.

There are two big advantages to an incubator. One is the low start-up and overhead. Often, the amount of your rental payments will be tied to your sales, starting low and increasing as your sales increase. The second big advantage is the ability to make use of others' experience and ideas. This type of assistance can come from the staff, fellow participants, and the facilities of the university.

Dinah Adkins, Executive Director of the National Business Incubation Association located in Athens, Ohio, says that the odds of a business celebrating its fifth birthday are 4 times greater if that business is birthed in an incubator.