By guest authors Irina Patterson and Candice Arnold
Mark: We have connections to two of the largest angel groups in Southern California. The Pasadena Angels reside in our incubator. That’s over 100 member organization. And The Tech Coast Angels, I think, is the largest angel network in the world with close to 300 members, all here in Southern California.
And then we have a very vibrant venture capital community, as well private equity. We’re able to open those doors.
We have an executive-in-residence, someone here who has done start ups, who’s done incubation. He is an investor and is going to take companies under his wing as an incubator within an incubator.
So, we both work together to help the companies as well. That’s the easy way. The idea is to make the entrepreneur comfortable here because they are spending so much time, to give them the resources they need and take away as many risks as possible.
Irina: Could you explain what ‘an incubator within an incubator’ means?
Mark: It’s a phrase we’re using and came up with. Our executive-in-residence has worked out a memorandum of understanding with us so that he can bring in companies into the incubator. He’s willing to fund those companies for the costs of that space, and the cost of his time, to work with companies under his name. In a sense, he has an incubator located within our incubator, but we work together.
He is an investor at heart, so there is a profit motive, of course. But, there is some altruism involved as well. He is looking to give back to the community. Even if he doesn’t fund a company, he does offer mentoring and advice to the companies that are in the incubator as well … the existing ones.
Irina: Is there anything specific that makes your incubator different from the rest of them?
Mark: There are a number of things. I will say, it primarily comes down to experience. It comes down to support. It comes down to networks and relationships.
We actually started an incubator network in Southern California called BINS – the business incubator network of Southern California. The incubators come together to improve each other, to help each other and to refer back and forth.
What may be a good fit for me, may not be a good fit for someone else and vice versa. We have 13 years of experience doing this incubation. You have someone who is a published author – that’s me – who teaches at university – that is also me. Someone who has been doing incubation for nine years and working with technology companies for a longer than that, who is an expert in commercialization.
The relationships that our mentors bring in are so key. The fact is we bring in networks, a contact list and relationships to the table. It’s a matter of bringing resources to a company.
A startup is resource poor. Coming into an incubator increases the value that you have, because you are coming to somebody with the networks and with the resources to help. And, of course, introduction to money.
We have international relationships as well. We get companies coming in here from outside the U.S. Most are from New Zealand, Australia, Japan, and Korea. It’s one flight over for the Asian community. They use us as a beachhead and as a launch pad for their technology commercialization plans in the United States.
Irina: How do you structure those relationships?
Mark: Those are mostly structured through the governments, although our agreements with New Zealand is through venture capitalists. We work closely with the governments, Australia, for example, and the states of Victoria and New South Wales, with the government of Japan through their JETRO organization, which is their export trade organization. The same thing with Korea through KOTRA. It’s their trade organization as well. And we work closely here with their offices in Los Angeles. Well, actually, the Australians are in San Francisco.
Irina: How do you find applicants?
Mark: Mostly referrals from graduates, from existing clients and from I will call them our evangelists, which are our mentors, our angels, our advisors, almost exclusively evangelists. We don’t go and advertise in the newspaper, although I do go out and provide speeches and talks. I’ll go into university classrooms. We’ll hold larger events as well.
We hold an Technology Week, something we founded 10 years ago. We do a lot of educational pieces through hands on workshops where we invite the outside public to come in and through mailing lists. But, again, I would think that probably 80% or more is referrals.