'Virtual' Incubators Hatch

After asking a friend in the Louisiana governor's office for advice, Stone was pleased to learn that she could join one local incubator, Idea Village, without moving. Within a month, she was assigned a team of lawyers, accountants, and salespeople. "They took me in and assessed me with brutal honesty," she says. Tim Williamson, the incubator's president, along with several entrepreneurs, revamped Stone's business plan. Initially she had planned to sell Costa Rican beans in the U.S. at three price points. Instead, Williamson suggested that she focus on high-end markets. Ticobeans are now sold in 100 specialty shops, restaurants, and hotels throughout New Orleans.

The advice is nice. But the price tag is even better, Stone says. So far, she has paid just $3,000 for consulting and legal services that could have run some $30,000 if she had tried to purchase them herself. That steep discount, par for the course at many incubators these days, is thanks to increasing support from government agencies looking to spur employment growth. Idea Village, for one, receives subsidies from the city of New Orleans and the state of Louisiana. Williamson also keeps prices low by securing discounted services from lawyers and accountants eager to build their networks.

One thing remains the same about these new virtual incubators: They are still a good place for entrepreneurs to meet prospective investors. "They are still good hunting grounds for venture capitalists, even though they got a bad rap after the dot-com crash," says Mark Heesen, president of the National Venture Capital Association.

Where the last generation of incubators focused almost exclusively on technology businesses, the new breed -- which includes the Colorado Springs Technology Incubator and the Mason Enterprise Center in Fairfax, Va. -- is more likely to welcome a variety of companies. To locate an incubator in your community, visit the website for the National Business Incubation Association (www.nbia.org), which keeps a directory. The application process is still rigorous, usually involving an introductory meeting and a presentation before a panel of experts. But the chances of landing a spot are much better now than they were five years ago. Membership is generally free, though you'll have to pay for services as you go. But in most cases, once you're accepted, you're a member for life.

Stone, for her part, expects Ticobeans to bring in $1 million within the next five years. In 2005, she hopes to leverage her contacts at Idea Village to raise $500,000, which would help fund the rollout of new flavors and an expansion into other states. Stone says she owes her success, in large part, to the Idea Village team. "We have been overwhelmed by what they have done for us."