Last Updated: January 3, 2014
The Incubation Program leases are generally offered for an initial three year period, although there may be exceptions in which companies are entered for a shorter period of time. Lessee Companies are expected to strive to “graduate” during this period.
It is understood, however, that life science firms may require a minimum of five years to be successful, given the complexities of the regulatory hurdles they typically face. As such, there is generally an understanding that Lessee Companies operating in this field will need a longer period of gestation within the Incubation Program. These types of companies can be allowed to remain within the Incubation Program for an additional two years, with a lease amendment/extension offered (based on Incubation Program Company Reviews) for each additional year beyond the initial three.
Graduation typically occurs when a Lessee Company is no longer appropriate for being in the incubator. This is frequently when the company has too many employees to be accommodated within the leased space and/or has acquired significant outside funding, allowing it to be independently successful.
When The Incubation Program Review Committee and the Incubation Program Director/designate determine that a Lessee Company is ready for graduation, this decision should be communicated to the Company in a way that acknowledges that this may be a major transition for its operations. However, the Incubation Program Director/designate may use rental rates (see the policy on Rental Rates) and the Hold-Over Clause (Section 18 of the standard Incubation Program lease) to ensure that such moves occur in a timely fashion.
National Business Incubator Association (NBIA) incubators have a median of 30 months as the average length of time a start-up stays in the incubator, and about one-third of these incubators do not currently apply length-of-time restrictions. The general standards for graduation among NBIA incubators suggest that exceeding the space available and achieving mutually-agreed milestones, such as revenue levels, staff size or composition, or market penetration are often more critical factors triggering graduation than simply the length of time the Lessee Company has been part of the incubator.
However this policy on duration of stay in the UConn Incubation Program also takes into consideration the availability (especially lack of) of space and allows for flexibility as to when companies can be accommodated (if there are vacancies) or encouraged to graduate when demand exceeds capacity. The strength and value of the company’s relationship to UConn is also a factor for consideration.
In summation, the prospects and needs of the Lessee Company, the availability of space in the incubator versus demand, the University’s policy on time allowed in the Incubation Program, the strength of the Company’s University linkages and the company’s own record of compliance with Incubation Program processes and policies will be factors considered, when a company is asked to graduate from the Incubation Program at the end of its first three-year term.
If the Lessee Company is to graduate, then the Incubation Program Director/designate should strive to provide services to help the company identify a location, make necessary business operations/site improvements and to navigate the permit and related public processes. It is advisable that outreach be made first to the town of Mansfield and neighboring towns before contacting other, more distant municipalities. The Incubation Program Director/designate should recruit advisors to be utilized for this purpose, and should contact local officials to ease this transition. The Incubation Program can also offer post-graduation services; however such assistance should be requested by the company well in advance of the move.