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Functioning of most popular business incubators in Ukraine. Comparative analysis.

Today there are more than 4,000 officially registered business incubators. Most of them are in the USA - from 850 to 1100. In Western Europe - 800. In Ukraine - just over 20, but actively developing.

However, only about 10 of them actually work. In particular: Bilotserkivskiy, Slavutich Ternopil, Lviv, Ivano-Frankivsk, Donetsk, Kharkiv.

Using statistics, about 1/3 of created companies survive independently. But who take care among business incubators tend to become successful over 85% of the participants.

The incubation period of firm-client continues usually 2-3 years.

At the end of the term innovation firm leaves the incubator and after that must register a company, to develop a business plan for their own development, fill out an application for membership of the appropriate form and wait for expert decision.

When the company (innovation project) begin to cooperate with business incubator. He cares about its location, provides study involving recognized experts in the field of venture capital investment, complex consulting services, legal and financial support and more.

Important advantages of a business incubator are creative atmosphere, the ability to contact to such companies; creating an image of a major company; set of inexpensive but necessary services; flexibility of management.

Activity about 90% of firms located in the business incubator associated with the use of high technology and innovation. Most popular are virtual (IT) business incubators. This trend is distributed in Ukraine.

In 2012 in Ukraine appeared first business incubator full cycle, which provides development services to start-up projects, and provides further support and investment in startup companies.

Startups - a new company, Internet company at an early stage of development. In Ukraine actively working with startups 7 incubators and one venture fund.

Examples of positive IT business incubators today are EastLabs (established in 2012), iHUB (2013), Happy Farm (2012), GrowthUp (2010), WannaBiz (2012), Voomy IT-Park (2013) and Polyteco (2013).

As some of the most more successful business incubators presents itself:

Happy Farm is a business incubator that provides business development services for startup teams (or companies) and also assumes further support and investment attraction in startup companies.

Eastlabs looks for talented teams with ideas that have the potential to change the world.  We feel that just as important as having an innovative idea that can shake the internet/mobile space, is to have a team determined to execution excellence. 

WannaBiz - the founders were driven by the wish to develop IT-entrepreneurship and form startup ecosystem in Ukraine.

Our motto: we work with people, not projects! That is why, the main objective is correct project selection, which should be goal-oriented and handled by the team of professionals.

Our main goal is to do project in line with the competitive market.

 iHub – is short for Innovation Hub which is a unique business incubator for IT startup companies in Ukraine. iHub is a place where the brightest young minds can work together in a productive collaborative environment. We offer A-class office environment with everything you need to start a business so that you can focus on building up your own business and turn your dreams into reality with the help from our international network of experienced experts, mentors, entrepreneurs and investors.

GrowthUP - was spun off into a separate business incubator for technology startups for the purpose of providing knowledge to as many entrepreneurs as possible and to assist startups in their earliest stages. 

Business incubators EastLabs, Happy Farm, WannaBiz, Voomy IT-park provide teams of startups a full set of services: coaching, business development, training and development, legal, finance, HR-support, promotion, office with all terms and conditions for use, search for investors. Happy Farm provides room and food to developers.

EastLabs invests to the team 20 000 $, But instead a business incubator gets 15%. WannaBiz invest up to 50 000 $ and receive 5-10% of the shares. Happy Farm invests up to 70 000 $ and receive 5-10% of the shares (15 000 $ - Distinguished to teams, the rest - the cost of maintenance). iHUB does not invest in start-ups and does not share in the property for training and consulting. Politeco - support student entrepreneurship initiative. It is based on progressive ideas in the IT field.

Business incubator Happy Farm investments is the largest - $ 8.4 million  during 3 years.

EastLabs - $ 1 million during 1 year, Voomy IT-Park (200 000 $) and WannaBiz (100 000 $). Business Incubator iHUB received a grant (SIVA) amounting to 700 000 euro and gained invit to Silicon Valley. The largest number of start-ups there in the Happy Farm business incubator - 21, iHUB - 15, EastLabs - 11, Voomy IT-Park - 7, WannaBiz -5.

However, the functioning of business incubators is accompanied by a number of problems such as:

- Gaps in the legal and methodological framework;

- Legal status uncertain of business incubators;

- Lack of financial support from the state;

- The uncertainty of the scope of business incubators;

- Lack of training of competent personnel for working in the business incubators and incubated staffing firms.

State participation in solving these problems will enable improved business incubation and increase entrepreneurship in Ukraine.

One of the main ways to develop business incubators are the development of legislation that would explicitly regulate the activities of business incubators; conduct certification, usage of foreign experience, ensuring adequate financial support from the government and private investors.

Consequently, business incubators play an important role in strengthening the economy of Ukraine, raising the level of its investment attractiveness. They are an effective form of logistical support to small businesses at an early stage of development, an essential element of survival and successful business in the future.