incubator

Organization that provides funding to start-up ventures and acts as a catalyst for entrepreneurial activity. Although not entirely a modern phenomenon, incubators are closely associated with Internet entrepreneurs. A key difference between incubators and other kinds of financing for start-ups is the extent of back-up provided. Incubators usually offer services to the companies they finance including office space, technological know-how, legal and financial advice, and Web design. In return for these services incubators take a slice of the equity.

Well-known incubators include Idealab in the USA and Brainspark in the UK. Some business schools, such as the Haas School of Business at Berkeley in the US and Cranfield School of Management in the UK, also offer an incubator-like environment for their MBA students.