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The Most Lucrative Start-Up Incubator

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TechStars, Y Combinator, and even the Lightspeed Grant may not be the best incubator programs for startups.  TechStars gives you 18K and 3 months of mentorship for 6% of the company.  Lightspeed gives each team 10K + 5K per team member and takes zero equity.  Even Y Combinator, which gives about 17K and mentorship for around 6% and now 150K in “free money” from Ron Conway and Yuri Milner, may not be the best.

Maybe it’s just staying in school.

I had lunch with a friend who at first glance would seem to be the opposite of today’s drop-out entrepreneur. After graduating from undergrad in three years, he’s now pursuing a PhD in Electrical Engineering and an MBA. His logic? The PhD program is effectively paying him to work with a professor to together commercialize a technology.  The MBA cost is much reduced since he has zero salary to show applying straight out of undergrad.  If he plays the legal stuff right, he won’t have to give up equity for what he is developing either.

So, while incubators may provide cash and mentorship, the right professor in the right department could do the same.  The upside is the same in both.  The downside is a failed founder versus a newly minted PhD.  I think more people should consider the latter option, especially for more technical, non consumer-Internet entrepreneurs.  And if these can function simultaneously as a research project, why not?


Written by sheeltyle

March 1, 2011 at 8:15 am