Incubator Firm

AAA

DEFINITION of 'Incubator Firm'

A firm engaged in the business of fostering early-stage companies through the developmental phases until such time as the company has sufficient financial, human and physical resources to function on its own.

The firm can be either a non-profit or a for-profit entity, and it can provide assistance via any or all of the following methods: 1. access to financial capital through relationships with financial partners, 2. access to experienced business consultants and management-level executives, 3. access to physical location space and business hardware or software and 5. access to informational and research resources via relationships with local universities and government entities.

INVESTOPEDIA EXPLAINS 'Incubator Firm'

An incubator firm that functions for profit will look to gain equity in the company in exchange for their services. Sometimes simple fees are charged at the time of service, but gaining equity in an early-stage company with strong growth prospects is the ultimate goal, and one that can provide a financial windfall for the incubator firm if the early-stage company takes off.

RELATED TERMS
  1. Venture Capital Funds

    An investment fund that manages money from investors seeking ...
  2. Venture Capital

    Money provided by investors to startup firms and small businesses ...
  3. Venture Capitalist

    An investor who either provides capital to startup ventures or ...
  4. Seed Capital

    The initial capital used to start a business. Seed capital often ...
  5. Cult Stock

    A classification describing stocks that have a sizable investor ...
  6. Concept Company

    A firm whose stock price is based on a new trend or fad and not ...
Related Articles
  1. Active Trading

    Sorting Out Cult Stocks

    Is that crazy product going to be the next big thing? Learn how to evaluate these companies here.
  2. Entrepreneurship

    The Best (And Worst) Countries To Be An Entrepeneur

    Where you start a business can influence its success. This new World Bank study will help you find the most – and least – favorable economic climates.
  3. Entrepreneurship

    A Look Into The Secrets Of Venture Capitalism

    Venture capitalists own an equity stake in the start-up and have a say in the functioning of the company. Investments are generally made in early stages of a company with long term high growth ...
  4. Before you consider launching a business consider these key pieces of advice.
    Entrepreneurship

    Essential Tips For Would-Be Entrepreneurs

    Before you consider launching a business consider these key pieces of advice.
  5. Why, How, Where & When Entrepreneurs Make money
    Entrepreneurship

    Why, How, Where and When Entrepreneurs Make Money

    Why, how, where and when do entrepreneurs make money? Eleven stages or "terms" that entrepreneurs and their ventures go through on the road to success.
  6. Entrepreneurship

    What's the difference between limited liability partnership and general partnership?

    Learn the differences between general partnerships and limited liability partnerships; each type has unique traits, benefits and risks.
  7. Capital Markets are financial markets.
    Markets

    Capital Markets

    Capital Markets are financial markets where organizations that need money for productive long-term purposes.
  8. Entrepreneurship

    Six Steps To A Better Business Budget

    This easy but essential process helps owners ensure that their businesses can stay afloat.
  9. Home & Auto

    The History Of Insurance

    The first written policy appeared in Hammurabi's Code. Find out how it evolved from there.
  10. Entrepreneurship

    How Venture Capitalists Make Investment Choices

    In order to increase your odds for receiving funding, here are some criteria considered by venture capitalists.

You May Also Like

Hot Definitions
  1. Scarcity

    The basic economic problem that arises because people have unlimited wants but resources are limited. Because of scarcity, ...
  2. Trust Fund

    A trust fund is a fund comprised of a variety of assets intended to provide benefits to an individual or organization. The ...
  3. Christmas Tree

    An options trading strategy that is generally achieved by purchasing one call option and selling two other call options at ...
  4. Christmas Club

    A short-term savings account that usually pays out the full account balance to its account holders once each year, right ...
  5. Boston Snow Indicator

    A market theory that states that a white Christmas in Boston will result in rising stock prices for the following year. For ...
  6. Christmas Island Dollar

    The former currency of Christmas Island, an Australian island in the Indian Ocean that was discovered on December 25, 1643. ...
Trading Center