By guest authors Irina Patterson and Candice Arnold
I am talking to Skip Simms, president and CEO of Ann Arbor SPARK, a nonprofit business development consortium in Michigan that works in partnership with the Michigan Economic Development Corporation (MEDC), the state’s economic development agency, to help early-stage entrepreneurs and growing companies.
Irina: Hi Skip. Let’s start with a broad overview of your organization.
Skip: Ann Arbor SPARK has three incubators. One is called SPARK Central, one is SPARK East, and the third is the East Michigan Life Science and Innovation Center. I’m the president and CEO of Ann Arbor SPARK.
Irina: What is your geographical focus?
Skip: Well, SPARK Central focuses on startups in the city of Ann Arbor. It is focused on technology, intellectual property protected services, and products that have high growth potential.
SPARK East is in Ypsilanti, Michigan, which is in another portion of the county, in a different community. It focuses on companies that have high growth potential and have some kind of innovative product or service. They do not have to have special, unique intellectual property. They do not have to have something that can be patented, necessarily. Just as long as it’s innovative and it’s going to do things in a different way for whatever customer sector or industry sector they’re serving. And, again, it would have to be a high-growth opportunity.
Last, the Michigan Life Science and Innovation Center is a wet lab incubator in Plymouth, Michigan. It is a 57,000 square foot former Pfizer facility. The majority of the space used as a wet lab, and it also has a significant amount of office space and a small animal vivarium.
Irina: So, for SPARK Central you take applications from Ann Arbor residents?
Skip: Yes. Applicants should be people who are either in Ann Arbor or willing to move their startup to Ann Arbor. They move into our incubator, and usually there’s at least one and a half to two full-time equivalent people affiliated with the startup.
Irina: Do they have to rent space in your incubator?
Skip: Well, yes and no. That raises a whole other kind of chapter of what we provide. We have an incubator where they can get space, and they do pay us in monthly rent. They get cubes. We provide, in addition to the space and the cube, the tables, chairs, phone, all utilities, and insurance for the facility. We provide free access to copiers and fax machines and free high-speed Internet. That all is incorporated into the rent.
We also have a virtual tenant option where the startup does not have to be physically located in this building. They have what we would call drop-in privileges at incubator, so they can come and use it – but they’re probably not there every day. It’s a lower rate, but they do pay for it. It’s a mail drop. Quite often, they use it as a business address where they can get their mail. We also have conference rooms. They have access to one of our two conference rooms to have staff or customer meetings.
Irina: What is the range of fees?
Skip: At SPARK Central, there are only two sets of fees. If you’re a virtual tenant, it’s $95 a month. If you have a cube, it’s $250 a month.
Irina: At what stage of their development do you prefer them to be when they apply for incubation?
Skip: They have to have a mostly developed business plan, and their product has to be beyond the research stage. They have to be in development. Rarely do any of our tenants have customers, yet. That’s part of what we want – to help them get to the point of commercialization.
Most of them have not received their first round of private equity, either. They’re still bootstrapping. Again, one of the things we try to help them with is to prepare for commercialization, whether that’s partnering with a manufacturing partner or sales partner. It could be making introductions to potential first customers or preparing them for and introducing them to potential investors.
Irina: Is this included in the fees you mentioned, or does it require additional payment?
Skip: No additional fees. We meet with them and determine what their needs are. Quite often, when they reach agreed-upon milestones, we’ll provide additional services, and we pay for them. They’re grants to the companies.