Growing Companies--Part II

Offering a wide range of shared services, operational expertise, and senior executive mentoring, incubators are catching on in the medical device industry, helping to jump-start what might otherwise be a sluggish new-company creation. As they mature, incubators are also increasingly forging formal ties with venture funds, to help ensure that their early-stage projects will get funding at least through Series A. Indeed, the connection between incubators and private financing has always been strong, though the current dismal financing climate for medical device firms offers only a partial explanation for the growth of incubators. Incubators are also finding a place because of the need on the part of big companies to replenish product pipelines, providing both a source of new technology and, at the same time, an alternative to big-company efforts to develop new products from external sources. Though they share some common characteristics, the range of models and approaches taken by different incubators actually varies quite broadly, as a closer look at several of them shows in this second of a two-part series.