By guest authors Irina Patterson and Vandana Upadhyay
Diane: Once they become an official incubator company, the mentor helps them to develop a first order strategic plan. What are you going to accomplish in the next three to six months? Whom do you need to meet in order to be successful? These are some questions we ask.
They open doors for them. They help them think through what the critical passes in taking this company from where it is at the point of incubation to where they want to be in three to five years.
Then we also have a more tactical mentor. He is the director of the incubator. He supports a company by introducing them and their technology to potential funders like AFRL or NASA or the industry partners whom we have connections with.
He also works with them in creating milestones that he helps them accomplish, making sure that they are on budget, on time and, if not, adjusting it, and so on.
And, either we as an organization or through consultants we bring in, we provide help with accounting and budgeting, marketing strategy, and public relations. All the things that small businesses have to take care of and, it is likely, that engineers do not have all of those skills.
Irina: What is the engagement model for the CEO mentors? Are they volunteer mentors or compensated mentors?
Diane: That is a great question because it is an important part of their success.
The CEO mentor is in theory a paid mentor. From the grant, the company pays the mentor a $1,000 a month for eight hours of assistance a month.
The reason we require them to pay is because we want both the mentor and the company to have some skin in the game and be responsible and accountable to each other.
Now, having said that, there are several mentors who’ve said, “I am not going take any money.” So, they’ve offered it back to eSpace but I have always said, “I’d rather it goes back to the company.”
So, we have several mentors who are doing it pro bono. And I think it worked out pretty well, but in a couple of cases it has been important that the mentor has been paid.
One of the reasons some mentors don’t want to take any money from the company is that they recognize that they might want to partner with that company, or a company has a product that they are interested in. So, in a couple of cases. the mentor has become the first customer of the company that we have incubated.
Occasionally we bring in consultants. We may bring in a company that helps small businesses develop their proposals for an SBIR. We may bring someone who has legal expertise to help them. So, it just depends. The service we provide to each of these companies is tailored to that company. It just depends on the company’s particular need.
Sometimes, the company pays the consultants out of our grants, or maybe that eSpace pays them, if we are providing that service to a larger group than one company.
Irina: What are your metrics for success? What do you measure?
Diane: For the incubator we have a lot different of measurements because we have three programs.
We are measuring the revenue that are generated by the companies as a result of their engagement on eSpace. So, that would be how many SBIRs and how large were those SBIRs in terms of funding level, how many industrial contracts have they received and how much were they worth, and so on.
For every dollar that we spend on an incubator company, we will measure how much revenue came back to that company in the form of industrial contracts and SBIRs.
We also take a look at the timeliness of the growth cycle. How quickly have they met the strategic plan or milestones that we have developed for them? How quickly are they able to build a product? Do they have a plan for how they get out of the incubator and become a self-sustaining organization?
In the Straight to Space program, we measure how many dollars in salary we’ve created for every dollar of training grants that we’ve provided to the entrepreneurial companies. Then from that we get a return on the investment percentage, obviously.
And then in the Venture Design program we do with the University of Colorado, we measure how many of those projects have turned into the companies that we are incubating. And out of the eight projects we’ve supported, one of them has turned into a company, and we have probably a second one coming on board next year. So, we are pretty pleased about that.