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Hatching Good Ideas? Characteristics of Minnesota's Business Incubators <br />• Location <br />Of the 28 incubators identified and surveyed, <br />16 (57 percent) were located in the <br />Minneapolis-St. Paul metropolitan area. The <br />remaining 12 incubators (43 percent) were <br />located in greater Minnesota. A total of 12 <br />incubators (43 percent) were located in urban <br />areas, 6 were in suburban areas (21 percent) <br />and 10 were in rural areas (36 percent). This <br />result is simular to the distribution nationally. <br />Again, non-profit and for-profit incubators <br />surveyed tend to be located in different areas <br />of the state. Of the 14 non-profit incubators <br />surveyed, five were located in the <br />Minneapolis-St. Paul metropolitan area. The <br />remaining nine non-profit incubators were <br />located in greater Minnesota. The opposite is <br />true of for-profit incubators surveyed, with 11 <br />of the 14 for-profit incubators located in the <br />Twin Cities area. <br />• Payment Mechanisms <br />The type of payment received by the incubator <br />for services differed among the incubators <br />surveyed. A total of 13 incubators received <br />fees exclusively. Seven incubators received a <br />combination of fees and an equity stake in <br />exchange for incubator services. Five <br />incubators accepted only an equity stake as <br />compensation from their businesses. Finally, <br />three incubators charged fees for an initial <br />entrepreneurship training program, following <br />completion of which businesses are charged <br />no or minimal fees. <br />The payment mechanism ofnon-profit <br />incubators compared to for-profit incubators <br />also differed. Non-profit incubators are more <br />reliant on fees with 10 of the 14 receiving <br />payment exclusively through fees. Another <br />3 incubators charge a fee for an initial <br />entrepreneurship training program, with no or <br />minimal fees upon completion. The remaining <br />incubator receives payment from a <br />combination of fee and equity. <br />For-profit incubators, on the other hand, have <br />more varied payment systems. Of the 14 <br />for-profit incubators, only three receive <br />payment exclusively through fees. A total of <br />six incubators receive payment from a <br />combination of both fees and equity in <br />incubated companies. The remaining five for- <br />profitincubators work exclusively on equity <br />considerations. Overall, 11 of the 14 for-profit <br />incubators receive equity in incubated <br />companies as partial or full payment for <br />incubator services. <br />8 Minnesota Department of Trade and Economic Development <br />