Incubators and Accelerators Nurture Startups

Facilities help give birth to state’s high-tech ecosystem.

There’s a buzz in the air. It’s the electric hum of innovative thought and excited conversation occurring among entrepreneurs, and, in many cases, students, professors and investors, at New Jersey-based incubators and accelerators. The mission of these facilities is to nurture new startups with the hope that they will grow their ventures in New Jersey and further expand the state’s innovation ecosystem. 

The main differences between an incubator and an accelerator are that the latter is usually cohort based with some type of “Demo Day” or investor pitch competition at the end of the program, where seed capital is usually awarded to winners by a group of investors. 

Meanwhile, incubators are – at their basic levels – shared locations, similar to co-working spaces, but they are usually tied to an institution of higher education, government entity, or large corporation, for example. And the relationship between the startups and host organization is mutually beneficial. For example, an incubator at an institution of higher education usually provides entrepreneurs access to faculty and/or students [interns or for hire]. Many times, it can be a faculty member or student from that same institution that decides to locate at the incubator to start a business. 

Both accelerators and incubators usually provide mentors, education and training in areas such as business plan writing, intellectual property issues, and marketing, etc. As mentioned previously, accelerators are cohort based and there is a set timeframe for the cohort to go through the program. With incubators, there is really not a set time frame for a startup to move out or graduate. 

The best explanation concerning the differences between the two facilities is described in the article “Accelerators vs. Incubators: What Startups Need to Know,” which appears on the website TechRepublic.com. It states:

“… an accelerator is a greenhouse for young plants to get the optimal conditions to grow, [while] an incubator matches quality seeds with the best soil for sprouting and growth.”

VentureLink

William Lutz, director of commercialization at VentureLink, the rebranded Enterprise Development Center (EDC) incubator at the New Jersey Institute of Technology (NJIT), Newark, stresses that incubators do not invest in startups or take an equity stake in a company as accelerators do. 

“Here at the VentureLink incubator, for example, you don’t even have to know what your product is. You may just know there is a problem in a market and you may have some related science or research, and you’re just trying to figure out if you can turn it into a company,” Lutz explains. “It can be anything from ‘I don’t know if I have an idea and I just want to be an entrepreneur’ to ‘I’ve got sales, I’m raising venture capital and I’m ready to go.’”

VentureLink offers entrepreneurs 110,000 square feet of space in two buildings on the NJIT campus: EDC 2 and EDC 3. At any one time, up to 60 companies can be renting space at the two sites. NJIT students who are starting their own companies can use the space for free until they graduate or until their businesses begin earning revenues. Some companies rent entire floors, some rent one to three offices and others simply rent desks.

According to Lutz, while anyone in the state has access to VentureLink because NJIT is a state school, “I do try and push for NJIT-based research, startups and entrepreneurs,” he says. 

As an example of the mix, Lutz points to two startups sharing a room within the incubator: “One person is an NJIT professor trying to start a company. The other person isn’t related to NJIT at all, but he wants to recruit and hire NJIT talent.”

Currently, the EDC 3 building is undergoing renovations as part of the incubator’s rebranding from the Enterprise Development Center to VentureLink. The first floor of the facility is changing from a space that was once just a closed-in “cubicle farm” with no windows, to more collaborative spaces. 

“We decided to open it up,” Lutz explains on a tour of the first floor while under construction. “The entrance will have a coffee shop and kitchen area. There will be more lounge chairs and couches and treadmill desks. It’s a space where you could bump into and meet people. Then walking through from the front to the rear, the spaces go from the loudest to the quietest with the back area set for more permanent companies,” Lutz explains. The renovation, with design work undertaken by Parret Somjen Architects of Rockaway, is expected to be completed by the upcoming fall semester.

Lutz, who has been at VentureLink for just a few short months, was attracted to the incubator because of its institutional support from NJIT. “The institution provides a broad entrepreneurial ecosystem that is very diverse. VentureLink is just a physical space within that system, and we like to push entrepreneurs out of the building to meet NJIT professors and shoot the breeze.” 

Lutz was also attracted to the City of Newark. A graduate of Carnegie Mellon University in Pittsburgh, where he helped found two startups – the first of which he says “crashed and burned quickly” and the second which he took through the university’s Project Olympus incubator program and, later, through a Pittsburgh-based accelerator – he sees great opportunity for New Jersey’s largest city. “If we pull the right levers and push the right buttons, Newark will find itself in a wonderful renaissance of technology and entrepreneurship, the same as Pittsburgh, Austin or Portland.”

South Jersey Technology Park (SJTP)

What VentureLink is to Newark, the South Jersey Technology Park @ Rowan University is to the southern region of the state. Located in Mantua Township and opened in 2008 thanks to a $5.8-million grant from the New Jersey Economic Development Authority, plus donations and Rowan University financing, the SJTP houses an incubator on the first floor of the 45,000-square-foot Samuel H. Jones Innovation Center located on the 200-acre site. 

According to Jeanne Nevelos, executive director of SJTP, “This is a place where [Rowan] can spin out companies engaged in government and industry research. It is also a place for community and tech-based entrepreneurs to take root and call home. The overriding factor is that companies come here to engage with the university. They either want to: access the talent of students – engineering, business and computer science majors, for example; hire graduates to make them full-time employees; or work with faculty researchers in various sponsored projects or clinics.”

The SJTP currently has 28 tenants that are involved in fields including healthcare (such as an Inspira Innovation Center), life sciences and even defense (Lockheed Martin, for example). 

Nevelos is also the managing director of Rowan Innovations, of which she says “breathes life into the SJTP.” The Rowan Innovations team is responsible for recruiting tenants, leasing space, developing a network of professional service firms and building the program for entrepreneurs. 

SJTP incubator startups can also be supported by a $5-million venture fund that Rowan University established a handful of years ago. Nevelos says money has been invested in startups such as: ReGelTec, a medical device company founded by the dean of Rowan’s College of Engineering which is developing a hydrogel that can replace disks on one’s spine (currently the technology is being tested on animals); and OcuMedic, a medical device company that has developed a contact lens that delivers medicine directly to the blood vessels in one’s eye.

Nevelos says the incubator at SJTP does not have an official name at the moment, but she said it may be called “The Bridge.”

“That is still a work in progress,” she explains. What she is sure about is that the incubator and the park have become important assets to the southern New Jersey region. “We have had interest from companies far and wide. There is a need and interest for this type of space. There is more demand than we can meet, but that is a good problem to have and something that Rowan is considering as we look at options on our west campus,” she says. Rowan’s main campus is in Glassboro.

TechLaunch Accelerator

TechLaunch was established in 2012, and according to Founder Mario Casabona, it was the first accelerator program in New Jersey. It initially raised $1.7 Million of which $450,000 was received from the New Jersey Economic Development Authority. To date, it has served more than 50 tech-focused companies and mentored over 100 entrepreneurs through its BullPen program.

In its early days, TechLaunch was a 16-week program where participating startups would be mentored and have the opportunity to pitch their companies to a panel of investors on a weekly basis in the effort to hone their presentation and pitch skills. Participants would also have access to professional service providers such as accountants and attorneys. “We did that for three years, but then realized the deal flow quality in the New Jersey area was not that exciting,” Casabona explains.

He then decided to reinvent TechLaunch by gearing it towards startups in the later stages of development: “It’s the stage between friend and family financing and angel investment,” Casabona says.

Today, the TechLaunch program includes “BullPen,” a series of pitch events where up to three startups (from up to 25 applicants) present their businesses to a mixed audience and a panel of investors at a New Jersey-based university location. The panel of investors picks the winning company – considered most fundable –  which is awarded $20,000 in services. Prior to the presentations, the companies go through three to four weeks of coaching, and have access to a stable of more than 150 mentors. 

The 13^th and most recent BullPen event was held in April at Stevens Institute of Technology, Hoboken. The winning company was Speak2 Software, a startup that provides comprehensive voice command software that allows senior living residents to make requests to caregivers via voice/smart speaker technology.

Casabona calculates that since TechLaunch’s founding, its participating startup companies have received in excess of $10 million in total investments. In addition, an estimated $2 million has come from Casabona Ventures, Mario Casabona’s own micro-venture capital firm.

Conclusion

The precise number of incubators and accelerators in the state is a bit difficult to pin down. The New Jersey Business & Industry Association’s “Indicators of Innovation” report, says there are 15 incubators and accelerators here. Casabona reports there are between 12 and 18. Meanwhile, the website of the New Jersey Technology Council lists 11. Finally, the New Jersey Economic Development Authority combines incubators and accelerators with co-working spaces, for a listing of some 70 facilities. 

Whatever the number, it seems as if the accelerators and incubators are growing, and according to Casabona, that’s a good thing. “Competition is fabulous because it improves the quality, the attention, and the awareness here in New Jersey,” he says.

NJ Re-establishes Commission on Science, Innovation and Technology

The commission aims to leverage the transfer of technology research between academia and industry.

In yet another effort to bolster the state’s innovation economy, last August, Gov. Phil Murphy re-established the formerly defunded New Jersey Commission on Science and Technology as the New Jersey Commission on Science, Innovation and Technology – with the new mission of researching technology partnerships between private industry and New Jersey’s leading public and private research institutions.

The former New Jersey Commission on Science and Technology, which was originally created in 1985, was defunded in 2010, and during the past nine years, “New Jersey’s reputation as a hub for technology and innovation languished,” according to the governor.

The commission is working to promote the state as a home for academic and technological research and development and commercialization, contributing to the efforts to get New Jersey back to its core mission of being a cutting-edge home for research and innovation.

Long-time tech innovator Gunjan Doshi chairs the commission, which is comprised of 17 total members, including Secretary of Higher Education Zakiya Smith Ellis and Tim Sullivan, CEO of the New Jersey Economic Development Authority.

“Technology is a powerful disruptive force, and the future is abundant – both in the challenges we will face, and the opportunities available for us to bring about radical change,” says Doshi. “The reformation of this commission is a crucial step in positioning our state at the forefront of that change.”

The original Commission of Science and Technology was founded by long-time state official Edward Cohen, who passed away this past February. Cohen served as executive director of the commission, which ultimately made nearly $100 million in capital grants to build and equip new advanced technology centers at New Jersey’s major research universities. At its peak, the Science Commission made annual operating grants totaling $19 million to encourage research and commercialization of new technology.

Rutgers Launches New Corporate Engagement Center

In an effort to foster strategic partnerships between business and industry and its own community, Rutgers, The State University of New Jersey, recently launched a new Corporate Engagement Center (CEC).

A joint venture between the Rutgers University Foundation and the university’s Office of Research and Economic Development, the CEC works with current and prospective corporate partners – as well as internal units across all of Rutgers – to promote opportunities in multiple areas, including sponsored research, technology commercialization, talent recruitment, executive education and training, and strategic philanthropy.

“We don’t want to be just a concierge; we want to be a broker of relationships,” notes Sacha Patera, who is spearheading the new Corporate Engagement Center as associate vice president. “We will bring the right people into the conversation to develop and optimize collaborations with a clear value proposition and mindful of industry’s investment.”

The Center aims to create comprehensive, mutually beneficial partnerships between the university and a broad range of companies and to serve as a front door into Rutgers for companies looking to engage with the university. As the focal point for all corporate relations activity at and on behalf of the university, its responsibilities include providing corporate partner-centric service, negotiating collaborative industry agreements, and gathering information about industry activity on campus.

“It’s a ‘one-stop shop’ for companies seeking to avail themselves of all that Rutgers has to offer and for members of the Rutgers community at all locations looking to forge partnerships with business,” Patera adds.

The Center builds on the establishment of the university’s academic health center which moved Rutgers to a new level of research activity resulting in: increased corporate research support, on average, greater than 25% each year; technology licensing revenues that reached a record $29.4 million in 2017; and corporate philanthropic investments in Rutgers that exceeded $40 million.