The New York State Energy Research and Development Authority (NYSERDA) contracted Research Into Action in 2017 to develop baseline indicators for its Cleantech Startup Growth Initiative and to capture baseline conditions for its Manufacturing Corps (M-Corps) Initiative. NYSERDA launched these initiatives to support the clean energy entrepreneurial ecosystem and accelerate the growth and scale of new businesses that serve the clean energy market in New York State.
In July 2017, NYSERDA funded five New York incubators: 1) ACRE at New York University (NYU) Tandon School of Engineering; 2) Venture Creations at Rochester Institute of Technology (RIT); 3) Clean Energy Business Incubator Program (CEBIP) at Stony Brook University; 4) Clean Tech Center at The Tech Garden; and 5) Southern Tier Clean Energy Incubator at Binghamton University.
What we did
The research team conducted the following activities to meet the research objectives:
- A telephone survey with cleantech startups enrolled in the NYSERDA-sponsored incubator programs (i.e., participants)
- A telephone survey with cleantech startups who did not enroll in NYSERDA-sponsored incubator programs or receive support from NYSERDA in the past year (i.e., non-participants)
- In-depth telephone interviews with staff at each of the five NYSERDA-sponsored incubators
- A review of Cleantech Startup Growth program data and secondary data sources
Our research unveiled several key take-aways:
- NYSERDA’s incubator strategy has helped accelerate the growth of cleantech startups in NYS. During the baseline period, NYSERDA’s efforts reached a notable share (34%) of cleantech startups in the NYS market. The participating cleantech companies reported raising more than $100 million, and they noted that incubator participation helped them expedite commercialization of their products. Findings also show a considerable decrease in commercialization time for participating client companies when compared to non-participating companies.
- Many participating cleantech firms are still far from being profitable and can benefit from additional support. About 63% (96 of 152) of participating cleantech companies reported no revenues during the baseline period. Most have raised capital, allowing them to continue with their product commercialization; however, nearly 40% noted securing financial capital or funding was their number one challenge. Participants most commonly noted that additional assistance in securing strategic partners would be helpful.
- Finding suitable mentors or coaches can be a challenge. Although incubator staff noted that mentors and coaches were plentiful, some had difficulties recruiting mentors or coaches who are effective in leading companies to succeed. Some also noted issues in attracting mentors or coaches who are willing to devote the time for effective coaching at no or low cost.
Our research revealed opportunities to enhance the initiatives through further exploring certain topics, including:
- Investigating which participating cleantech companies are exceptionally successful in raising capital and why may help incubator staff better serve companies that are struggling to secure funding.
- Identifying specific incubator needs for professional coaching and mentoring, and the potential costs associated with those services, can help program administrators refine their initiatives to ensure they direct incubators to the most relevant and effective coaching and mentoring services.
- It is important to capture details on company ownership structures for studies of this nature to ensure that sampling fully represents the population. The research team had limited information to assess whether companies in the non-participant and participant samples, as well as in the population, were subsidiaries of larger companies from which they could draw capital or resources. Without these details, it is difficult to know if the sample of start-up companies represents both startups who are and who are not subsidiaries of larger companies.