The party to celebrate Venturehouse Group’s move to the District packed about 200 high-tech executives, government officials and downtown business people into the firm’s future home, a vacant former bank office at 509 Seventh St. NW.
A jazz band jammed and guests helped themselves from platters heaped with crab cakes as Venturehouse founder Mark Ein played host in the Spartan surroundings he plans to transform into a place where young companies can grow and prosper a business incubator.
“It just kind of hit me there was an unprecedented opportunity to create really valuable companies in really short periods of time,” said Mr. Ein, a Bethesda native who recently left the D.C.-based venture firm Carlyle Group.
The idea to lease the three floors across from the MCI Center hit one day as he was driving past the empty bank offices. The building and the neighborhood seemed perfect for the kind of collaborative and creative environment he wanted to establish for his start-up companies.
Long poor cousins in the family of economic development projects, business incubators have become hot. In the past nine months, 100 new incubators have opened, bringing the total to 800 in North America, according to the National Business Incubation Association, based in Athens, Ohio.
Nearly all were started by venture capitalists, who have devoted millions to staking and starting Internet companies and hope to capitalize on the explosive stock values of Web and electronic-commerce companies. They buy equity stakes worth 20 percent to 60 percent of their charges, move them along and aim to sell the newly minted businesses in as little as six months.
The Washington area is no different. Since last summer, at least 10 private and public groups from Reston to Columbia, Md., have started or proposed incubators with a high-tech focus. Urban locations like the District or Ballston or Silver Spring have been the most popular for sites lately.
That’s quite different from earlier incubators, which have been established since the early 1980s for a variety of industries and public purposes, such as revitalizing neighborhoods, commercializing technologies, empowering minorities. The vast majority are nonprofits, and about a quarter are affiliated with colleges and universities.
“In the past no one would ever say, ‘you want to make money? Let’s start an incubator,’ ” said Dinah Adkins, executive director of NBIA. The newest ones “are dependent entirely on the market.”
Typically, incubators have consisted of a set of shared offices under a nonprofit manager. They have negotiated royalties or equity stakes, but at lower rates than the new incubators. Some have been better organized or better funded than others, but all provide services and expect their tenants to move out someday, otherwise they are only office suites, said Sally Linder, NBIA spokeswoman.
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