Hatching the crowdfunding EGG : the case of the crowdfundingHub : a research on the role of the business incubator process in regard to the development of theory on crowdfunding

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HATCHING THE CROWDFUNDING EGG:

THE CASE OF THE CROWDFUNDINGHUB

A

RESEARCH ON THE ROLE OF THE BUSINESS INCUBATOR

PROCESS IN REGARD TO THE DEVELOPMENT OF THEORY ON

CROWDFUNDING

.

M.H. SMIT;10593462;MARCO.SMIT@STUDENT.UVA.NL

MSC BUSINESS STUDIES; ENTREPRENEURSHIP AND INNOVATION TRACK Dr. Tsvi Vinig, Final Version, 24-8-2014, University Of Amsterdam

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I

ABSTRACT

The thesis will present an in-depth research on incubators, with a specific focus on university involvement. This central case study in this thesis is the CrowdfundingHub, which is situated in Amsterdam. In this incubator, the concept of crowdfunding plays an important role. More precisely, the lack of knowledge and academic literature on the concept of crowdfunding set the stage for this research. As this is a significant point of development for this industry, the author felt the need to investigate a potential role of an incubator process in this regard. A multiple case study research will be presented which is explorative in nature, and will be performed in a qualitative manner. The multiple case study approach is used to compare other incubators with the CrowdfundingHub. The conclusions of this research show opportunities for universities in regard to knowledge development and add valuable insights to the founders of the CrowdfundingHub, by providing them with practices of similar incubators, so that it provides potential guidance to achieving their goal. Furthermore, the insights could serve as a base for policy making and the use of extra and different research approaches.

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II

ACKNOWLEDGEMENTS

The researcher wants to express his gratitude to Dr. Vinig of the Amsterdam Business School, for his guidance in writing this thesis. Next to this, the researcher wants to express his great appreciation to the CrowdfundingHub, with the input of Peter Nelissen and Ronald Kleverlaan in particular. The internship at the CrowdfundingHub gave the researcher the opportunity to get in contact with very valuable data sources related to crowdfunding and gave the author the opportunity to get a taste of the activities performed in such an organization and industry. Finally, the author wants to acknowledge the support of all the interviewed parties. Great additions in terms of data and insights were gathered during this interviews and company visits.

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1 INTRODUCTION

Incubation is a term that finds its origin in the Latin language. It is often related to medical issues, such as the development of diseases until they develop symptoms or birds bringing eggs to hatching1_{. The author feels that this is a suitable metaphor for the development of theory on}

a new phenomenon. When relating the forgoing to this thesis, one can state that the theory on crowdfunding is being incubated at the moment; the crowdfunding egg is being brought to hatching. The theory on crowdfunding is still rather limited. This is indirectly shown in the quote that is presented below, that deals with the goal of the Crowdfunding Hub (CH)2_.

Ronald Kleverlaan stated the goal of the CH as the follows. “Knowledge gathering. So

that you can get knowledge about the development of the crowdfunding market. This also means

the spreading of knowledge, thus creating more awareness about crowdfunding among the big

public. And all the platforms can use this.” In short, this quote reveals that the phenomenon of

crowdfunding is not yet well known at the big public. In addition, crowdfunding consultants of douwenkoren.nl stated that crowdfunding is on its way to becoming mainstream 3 _.

Consequently, a lack of theories exists, since the source that can be used for i.e. best practices research is rather limited. In order to give the research on crowdfunding a boost, the CH was founded.

As of January 2014, the CrowdfundingHub was established as a knowledge center/incubator4_{for the crowdfunding industry. This is the result of a growing interest in}

alternative ways of financing. Over the last couple of years, crowdfunding has grown a lot in size, i.e. in 2012 a staggering number of $2.67 bln was raised worldwide, an increase of 81%

1_{“Oxford Dictionary – to incubate”}_{http://www.oxforddictionaries.com/definition/english/incubate}_{retrieved on}

6-8-2014

2_{“CrowdfundingHub”}_{http://crowdfundinghub.nl/}_{retrieved on 7-8-2014}

3_{“Crowdfunding op weg naar mainstream”}_{http://www.douwenkoren.nl/crowdfunding-op-weg-naar-mainstream/}

retrieved on 13-8-2014

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3 (!) compared to 20115_{. However, as the quote above already reveals, not a lot of (academic)}

research has been performed on the theory underlying the crowdfunding concept. This leads to a lack of knowledge, which in turn can have a very negative impact on new entrepreneurs in this sector. Furthermore, because it is such a new phenomenon not a lot of regulations exist. This can also be a major pitfall for potential investors, as they may invest in a project that is fraudulent6_{or appears to be infeasible after successfully reaching the threshold. On the other}

hand, platforms can obtain valuable insights in best practices to get more successful projects. In short, a lot can be achieved by performing research, so that the activities in the crowdfunding sector are based on empirically proven assumptions. Relating this important research dimension to the thesis, the concept of business incubators will be used. Over the years, business incubators have developed themselves into several forms. However, the main activities of incubators still consist out of business development. An interesting aspect in regard to the configuration of these incubators is the connection with research institutes, i.e. universities. These knowledge intensive organizations are responsible for knowledge spillovers that may support the incubators or the businesses active in the incubator. However, what if there is no or only a limited amount of knowledge that can be shared by the universities, as is the case in the crowdfunding sector?

In this thesis the question is raised how the business incubator process could contribute to the development and spreading of theory on crowdfunding at the CH, which is regarded as the goal of the CH. The full research question will be presented in the research method section. A thorough literature research will be performed that will serve as a base for the multiple case studies that are performed. These case studies have a specific focus on the relationship between

5_{“Global crowdfunding volumes rise 81 percent in 2012”}

http://www.reuters.com/article/2013/04/08/us-crowdfunding-data-idUSBRE9370QY20130408 retrieved on 13-8-2014

6 _{“First-of-a-kind} _Kickstarter _lawsuit _highlights _risks _of _crowd _funding”

http://www.cio.com/article/2376610/legal/first-of-a-kind-kickstarter-lawsuit-highlights-risks-of-crowd-funding.html retrieved on 26-7-2014

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4 the investigated incubator and the university, and differences in the configurations of the investigated incubators. In short, the CH will be investigated from the perspective distilled from literature on incubators. The case studies are performed using a qualitative research method.

1.1 Structure of the Thesis

The thesis is structured as follows. The first section will discuss the relevant literature that is related to the subjects presented in the introduction. In this section of the thesis, the concept of business incubation will be explained, with a special emphasis on the relationship with universities, after which a more in depth look will be provided into the different incubator configuration frameworks. The review of the incubator literature will be finished by discussing the collected literature on incubatee development. Subsequently, the researcher will start explaining literature that is dealing with the phenomenon of crowdfunding. An insight will be given into the different business models of crowdfunding platforms.

Based on this data, an overview of concepts, definitions and models is developed that will serve as the base for the case studies. This will be presented in the chapter that follows. This chapter will address the methodology of the study and an explanation for the chosen research methods will be provided.

After the section explaining the research design, the results of the research will be presented. These will be discussed and concluded in the Discussion and Conclusion section, where the author will come up with the insights and conclusions that were discovered in this research.

This section will be followed up by a presenting the opportunities for further research and a chapter on the limitations of the study to finish this thesis. Finally, the researcher added an appendix and bibliography.

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2 LITERATURE REVIEW

This part of the thesis will elaborate upon the literature relevant for this thesis. The researcher will critically review literature related to incubators and crowdfunding.

2.1 Business Incubators

The Batavia Industrial Center was the first ever incubator and opened in the U.S. in 19597_.

However, it took up until the early 80’s before the business incubation concept got popular. This large timeframe was partly due to the big crises in the years before 1980, which caused industrial downturn. Furthermore, renewed insights in regional economic development caused individuals to reconsider the former system. This led to increased support from several institutions, to develop business incubators. For example, this led to the founding of the National Business Incubation Association (NBIA) in 19858_{. Since then, Business Incubators}

(BIs) have grown a lot in numbers. This is mainly because of regulatory changes. For example, in the 1980s the US government passed the Bayh-Dole Act (Hackett et al., 2004), which facilitated a more commercial exploitation of federally funded research by connecting the outcomes with business incubation. After this milestone and with the formation of NBIA in 1985, BIs were taken very seriously.

Since the Batavia Industrial Center (BIC) was established, the business incubation concept has changed a lot. According to Joseph L. Mancuso the founding of BIC was “the birth of the concept of the business incubator”, describing a building where small businesses were ‘hatched’ and nurtured until they were strong enough to become independent. These mature enterprises or ‘graduates’ would then invest in buying or building new plants when they moved out of the ‘nest’ into the ‘community’9_{. What can be distilled from this statement is that an}

incubator focuses on young, small sized firms that need support in the initial phases of their

7_{“The History of Business Incubation”}_{http://www.nbia.org/resource_library/history/}_{retrieved on 7-5-2014} 8_{“The History of Business Incubation”}_{http://www.nbia.org/resource_library/history/}_{retrieved on 7-5-2014} 9_{“Mancuso Business Development Group”}_{http://www.mancusogroup.com/about_us_incubator.html}_{retrieved on}

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6 existence. Furthermore, a clear outcome of the incubation process is defined. The evolution of the concept led to i.e. the first ever seed accelerator established in 200510_{. The Y Combinator’s}

activities are stated as follows;; “at Y Combinator, our goal is to get you [the ‘accelerated’ company] through the first phase. This usually means: get you to the point where you've built something impressive enough to raise money on a larger scale. Then we introduce you to later stage investors—or occasionally even acquirers”11_{. As one can see, the theoretical base of}

business incubation is found in the concept of the ‘seed accelerator’, however the format has become different. The latter concept is more short-term focused compared to the initial incubation perspective. As a final example, the author wants to introduce the ‘Startup Weekend’12_{established in 2010 (Coster, 2010). The Startup Weekend can be considered as}

another form of business incubation. On their website, the concept is described as follows “Startup Weekends are weekend-long, hands-on experiences where entrepreneurs and aspiring entrepreneurs can find out if startup ideas are viable”13_{. The Startup Weekend is a “Seattle based}

non-profit that runs weekend-long brainstorming sessions for entrepreneurs around the world” (Coster, 2010). However, this is an extreme example of business incubation activities, especially considering the time dimension, but in essence there are significant similarities and it shows the evolution business incubation has undergone. For example, within business incubation the viability of a start-up is evaluated over a longer period of time, where the Startup Weekend just takes 54 hours.

The first research on incubators was performed by Temali et al. (1984), which caused a rapid increase on incubation research. As shown in figure 1, research orientations within the incubator-incubation concept have become more detailed and focused since the initiation in 1984.

10_{“Y Combinator”}_{http://ycombinator.com/index.html}_{retrieved on 15-5-2014} 11_{“What We Do”}_{http://ycombinator.com/about.html}_{retrieved on 15-5-2014} 12_{“Startup Weekend”}_{http://startupweekend.org/}_{retrieved on 16-5-2014} 13_“About”_{http://startupweekend.org/about/}_{retrieved on 16-5-2014}

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Figure 1. Overview of incubator-incubation literature (Hackett et al., 2004).

The author now will develop an understanding of what business incubation means, by using the article of Hackett and Dilts (2004). These authors collected and investigated a significant amount of research performed on this specific topic. In the article, the authors highlighted the changing research orientations within the area of business incubation over the years.

Out of the range of investigations, several definitions were collected. Out of this collection Hackett et al. (2004) developed the following definition for BIs “A business incubator is a shared office space facility that seeks to provide its incubatees (i.e. ‘‘portfolio-’’ or ‘‘client-’’ or ‘‘tenant-companies’’) with a strategic, value-adding intervention system (i.e. business incubation) of monitoring and business assistance”. Adding to this, a BI is not limited

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8 to this definition; i.e. the individuals working at the incubator create a network that can be attributed to the incubator and spread the access to the resources needed. In short, business incubation is not only a supply of a structure; it can be seen as a process.

Furthermore, Hackett et al. (2004) found that “less attention has been focused on the incubatees, the innovations they seek to diffuse, and the incubation outcomes that have been achieved”.

Figure 2. Allen and McCluskey continuum, (Allen & McCluskey, 1990)

The question now is; which model creates the best incubating environment for the incubatees? As stated by Allen and McCluskey (1990), incubators can have different objectives. With this knowledge, the incubator has to align the model with the goals of their practices. In Figure 2, the goals and objectives of different incubators are collected. Four types of incubators are named in the research, each having different objectives. As can be seen in the figure, differences exist between in the strategic objectives, comparing i.e. for-profit with not-for profit incubators. Regarding the objectives, the researchers identified differences between primary and secondary objectives, meaning that the primary objectives are associated with the typology

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9 of the incubator and the secondary objectives can be mingled with other organizational types (Allen et al., 1990). Finally the article mentions two other organizational types, of which one – the public-private partnerships- can be regarded as a combination of two or more of the four models out of the continuum. This type is associated with companies that divide their activities, and because partnerships can serve different purposes a more hybrid structure is demanded (Allen et al., 1990). The final type discussed in this article is the corporate incubator (Allen et al., 1990). This type was introduced to enhance innovativeness and economic value by focusing on new products and services within an organization.

In addition to the Allen and McCluskey continuum, the researcher wants to highlight the research of Bruneel et al. (2012. As can be seen in Table 1, Bruneel et al. (2012) identified three generations of incubators and presented the accompanying value propositions. The differences in the generations evolved out of the forgoing generation, basically adding extra activities. The generations were defined according to the moment of founding; “1980s for the first generation, early 1990s for the second generation, and late 1990s–early 2000s for the third generation” (Bruneel et al., 2012).

First Generation Second

Generation

Third Generation

Offering Office space and

shared resources Coaching and training support Access to technological, professional, and financial networks

Theoretical rationale

Economies of scale Accelerating the

learning curve Access to external resources, knowledge, and legitimacy

Table 1. Summary of the evolution of business incubation’s value proposition (Bruneel, et al., 2012).

In an earlier stage, this was investigated by Aerts et al. (2007), who developed a theory that highlighted several generations of incubators. Within the research three generations are discussed, with the last generation being the most important for this research. The third, and last, generation has a strong focus on high-tech, ICT and the most promising NTBFs (Aerts et al., 2007). This attention towards the technical aspect is very interesting for this thesis research. As will be explained later, this third generation namely has a connection with crowdfunding,

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10 and more specifically crowdfunding platforms, because the majority of crowdfunding platforms are online.

Considering the definition stated in the article of Hackett et al. (2004), the author concluded that the incubator can be seen as a provider of services. These services consist out of i.e. knowledge, an office space and an intervention system. This dimension of service provision is further investigated in the article of Aaboen (2009).

In this article, the author uses the analogies of a professional service firm. More specifically; the incubator concept is framed through the perspective of a professional service firm, with the goal to understand its practices. The outcomes are based on empirical data collected from the research performed on six incubators. In the article, the researcher has defined the incubator concept as “an environment for initiation and growth of knowledge- and technology-intensive new technology-based firms (NTBFs)” (Aaboen, 2009). Furthermore, the author specifically states that the concept of business incubation is considered as a new phenomenon in the research context of this article.

The service activities the incubator offers, consist out of i.e. office space, marketing and management with the aim to accelerate growth. Next to these offerings, the social network of the incubator and other incubatees can be used to get a hold of resources that are not readily available. This shows that indirect services are offered as well, for example “information about the timing of a product launch” (Nicolaou et al., 2003). On the other hand, a virtual incubator is not able to offer i.e. office space, because it does not have a physical location. Therefore, a virtual incubator can be perceived as a mean to “enable more effective and efficient allocation of knowledge-based assets locally, regionally and globally” (Carayannis & von Zedtwitz, 2005) and focus their offerings more “on particular needs in the entrepreneurial community rather than a particular industry” (Carayannis et al., 2005). Carayannis and von Zedtwitz (2005) furthermore state that an incubator can be considered a true incubator if it consists of at least

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11 four of these services; “office space, office support, access to financial resources, entrepreneurial start-up support and access to networks” (Carayannis et al., 2005).

Aaboen (2009) furthermore investigated different types of incubators, based on the findings from former research that there is a lot of diversity among incubators. An example is the difference between non-profit and for-profit incubators. From this research Aaboen (2009) concluded that incubators do have the same characteristics as professional service firms.

Regarding the methodology section of the article, Aaboen (2009) relates the access to resources to the resource scarcity of NTBFs. The access to, and the utilization of resources is very important for both parties. As examples for resources the author names “space, goals, marketing, management, structure and financing” (Aaboen, 2009). A role for the incubator is to anticipate on this scarcity and demand for resources in a way that “the incubator is expected to increase and transfer entrepreneurial resources within the region” (Aaboen, 2009), so that these resources become available for the NTBFs.

When reviewing Aaboen’s (2009) conclusions, resources are specifically pointed out. It is shown that the extent of resource complexity is positively related to the difficulty to offer similar services. One can say that portfolio diversification regarding incubatees is an important aspect here. However, the mobility of these resources and the level of services provided need to be considered too. A good match between these different factors has to be found.

Now that the author has identified the different dimensions an incubator, seen as a service provider as described by Aaboen (2009) and Carayannis et al. (2005),consists of, it is time to go into more depth about the organization of these dimensions. In the forgoing paragraph the author highlighted the importance of a diversified portfolio, however, the possibility of incubator specialization can decrease when different organizations are apparent. Now the question arises; what are the implications of incubator specialization? In the article of

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12 Schwartz & Hornych (2008), a “sector-specialized business incubator (SBI)” is researched and related the outcomes to possible benefits for these organizations.

Looking at the figures collected by Schwartz et al. (2008), 33% of the BIs in Germany started with a sector-specific focus. This shows that there is a need to be more specific in terms of the offerings provided by the incubators. Reviewing the literature showed the authors several possible benefits. Schwartz et al. (2008) state that specialization can lead to theavailability of “specialized equipment and premises”,“sector-specific knowledge and know-how” which can be further increased, and “the BSI can foster synergies between incubatees and support and extend networks”.Furthermore, when being specific and specialized in the offerings, a positive relation was discovered with the image of the BI. It can be perceived as the ‘place to be’ for sector-related organizations (Schwartz et al., 2008).

Of course, not everything related to a specialized incubator can be regarded as advantageous. Since the population in the incubator will have a lot of similar knowledge, this can lead to “stagnation in development” or “a lack of cross-fertilization” (Schwartz et al, 2008).

This extensive literature by Schwartz et al. review led to an intensive research in which the hypotheses based on the theory described above were tested. The outcomes show promising results regarding the advantages of being connected to a SBI. More specifically, the sector-specific consulting and the availability of specialized equipment is very beneficial. Furthermore, due to the existence of the SBI, positive (regional) effects exist, of which the incubatees can benefit (Schwartz et al., 2008). However, when considering the networking dimension of the incubator, less beneficial results were found. This was investigated more in depth by Schwartz et al. (2010). A distinction between diversified business incubators (DBIs) and specialized business incubators (SBIs) was made. The authors investigated 150 firms on the cooperation patterns, in regard to other tenant firms and university linkages. The outcomes show that informal ties between tenant firms are very important in regard to cooperation. The

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13 assumption that SBIs have an increased level of internal networking is not supported (Schwartz et al., 2010). Moreover, due to incubator specialization, cooperation between incubatees may become problematic because of an increased reluctance to share i.e. ideas, information or business secrets (Schwartz et al., 2010). As stated before, this information can be very valuable for the incubatees. However, when dealing with this reluctance, knowledge intensive organizations can be a solution by offering knowledge spillovers. This will be discussed in the next section.

2.2 Relationship with Universities

In academic literature, a lot has been said about local spillovers by universities, but little in regard to the development of knowledge or theories on new phenomena by coopering with private-sector companies. Leyden & Link (2013) even stated that universities are unattractive partners for private-sector collaboration in regard to R&D; a practice that can be very interesting when developing theory. This is based on the assumption that universities “will have to cover its costs through a fee charged to participating business enterprises” (Leyden & Link, 2013). This assumption stated by Leyden & Link (2013) gave the author of this thesis an interesting insight in regard to university affiliations in regard to the development of theory, especially because collaboration between an university and an organization can be beneficial, as is shown in the research of Rothaermel & Thursby (2005). This article presents the investigation on the knowledge flow between university and a technology incubator and the effects of this flow on the incubatee’s performance. The authors found evidence that university support in regard to supplying knowledge is beneficiary. However, this depends on the extent of absorptive capacity of the incubatee. In short, the incubatee firm can benefit from the supply of knowledge by universities, however the amount of success depends heavily on the capabilities of the incubatee firm to use this knowledge to get a “firm-level competitive advantage” (Rothaermel & Thursby, 2005).

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14 This is even more emphasized by the article of O’Neal & Schoen (n.d.), that showed the importance of collaboration in the form of a university incubation program; the University of Central Florida Incubation Program (UCFIP). Their research showed that there are major regional opportunities for these kind of initiatives. The authors show that the UCFIP has been extremely successful, which can be contributed to “aligning of the different entities in the Greater Orlando area, thereby aligning the UCFIP to the larger eco system where every contributing partner supports the incubator strongly and can see the relevance and the importance of UCFIP’s existence in the community” (O’Neal & Schoen, n.d.). This eco system aspect is named as critical, because an ordinary incubator in itself is very unlikely to be able to create such a situation (O’Neal & Schoen, n.d.). When analyzing the UCFIP, the research capabilities of the universities appear to play an important role. However, the knowledge that is created via research needs to be transferred to the market. Since the UCFIP has only a limited distance between university and market, this is seen as very beneficial. The program even led to international inquiries, so that it benefits much more than regional development. An important note here is that this program needs full dedication and good management by the university.

Some general research was performed concerning the benefits or tradeoffs for organizations in regard to collaborative knowledge creation. The following investigation was made by Ding & Huang (2010). The outcomes showed that a collaboration is significantly subject to moral hazards. These moral hazards come forth out of possible withdrawals, knowledge outgoing spillovers that may affect the competitive position or reduced investments of resources by the collaboration partner (Ding & Huang, 2010). In the article, the authors describe ratios that determine the success of the knowledge creation and deal with these moral hazards. In the eyes of the researcher, this theory proposed by the authors is written according to a very negative perspective, as if the collaborators are constantly checking if the other one

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15 does its best. Furthermore, the ratios aren’t weighed against the values of the greater good;; What if collaboration for knowledge creation is really necessary? For example, the knowledge on crowdfunding is still very limited.

An interesting article that investigates a university-industry research collaboration is the article of Abramo, D’Angelo, & Solazzi (2012). The authors offer an instrument that can be regarded as supportive in terms of collaboration between organizations and universities. It organizes the demand and supply of ‘new knowledge’ which is divided in three levels: Intra-regional, extra-regional and national. The instrument is diagnostic of nature and should be used by “regional and national policy makers, which could add to existing ones to plan interventions for re-balancing sectorial public supply of knowledge with industrial absorptive capacity, and maximizing appropriability of knowledge spillovers” (Abramo et al., 2012). This sheds another light on this thesis, as it emphasizes the viewpoint of the university. In the end universities want to make sure that spillovers are effective as well.

Combining the theories discussed above, the author wants to investigate how the incubators are dealing with these collaborations and what the potential outcomes of these collaborations are.

2.3 Business Incubator Configurations

Now that the author developed an understanding of two basic concepts of incubators, the diversified incubator and the specialized incubator, it is time to investigate relevant models regarding the configuration of the incubator. In the article of Hackett et al. (2004), two frameworks are introduced;the Campbell, Kendrick, and Samuelson framework (Campbell, et al., 1985), and the Smilor framework (Smilor, 1987), which extends the forgoing framework.

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Figure 3. The Campbell, Kendrick, and Samuelson framework. (Campbell et al., 1985)

The Campbell, Kendrick and Samuelson framework (Figure 3) sees the incubator as an organization that facilitates growth by offering services. These services can be i.e. offices, business consulting, computers etcetera. These offerings can differ between incubators. Furthermore, incubators are seen as entities that can support regional development. This is the result of the creation and support of new businesses (Campbell et al., 1985). In the framework, Campbell et al. (1985) visualize four core added values provided by incubators. These four values consist out of (1) diagnosis of needs, (2) selection and monitoring of the services offered by the incubator, (3) capital investment and (4) access to network expertise (Campbell et al., 1985). With these four core values, an incubator can contribute to the development of a business. However, these values need to be supported by several conditions; careful planning, a feasibility check and a pool of potential partners. When these conditions are not sufficiently available, it will be hard to develop an incubator that offers a significant contribution to the incubatees (Campbell et al., 1985). Interesting in this research is that it gives an overview of the different components an incubator’s configuration and process consists of. A critical note here is that the framework only accounts successfully incubated ventures.

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17 Regarding the Smilor framework, a different perspective is found. Smilor (1987) takes a more external approach, including i.e. the incubator affiliations. As stated by Campbell et al. (1985), ventures can be developed using four core values. These values need to be supported by conditions discussed above. These conditions are partially included in the Smilor framework. As can be seen in Figure 4 Smilor (1987) included incubator affiliations, support systems and the impact of tenant companies in the framework. Where incubator affiliations addresses the condition of the potential partners pool in regard to networking capabilities, careful planning and the feasibility check appear to be internal processes, but are not depicted in the framework. This shows the weakness of the model; no attention is given to internal incubation processes. In regard to the affiliations, and more specifically the ‘University’ affiliation, promising results can be made because of the big research capabilities (O’Neal & Schoen, n.d.; Rothaermel & Thursby, 2005).

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2.4 Research on Incubatees

As described above, in research less attention has been focused on incubatee development. The list of investigations on incubators and incubation models is extensive, where the list of research on incubatee needs and development is significantly shorter.

Scherer et al. (1988) investigated several emerging companies included in an incubator. Out of the case studies performed, the authors highlighted some key insights. First of all, the time-dimension is highly relevant. Starting entrepreneurs are struggling to allocate time to the right activities, which are separated as being short-term oriented or long-term oriented. As an example, further incremental adjustments in commercial implementation (short-term priorities) versus major new product changes (long-term priorities) are mentioned (Scherer et al., 1988). Secondly, too much attention is focused on the growth of the organization. When successful, entrepreneurs tend “to go full steam ahead”, where a more balanced growth rate is advisable (Scherer et al., 1988). Summarizing the findings, prioritizing seems to be a big problem for the incubatee firms.

Although Hackett et al. (2004) state that research on this topic is limited, the key findings discovered in their research include “the importance of providing dynamic, proactive feedback to incubatees, assisting incubatees with business planning, and encouraging incubatees to introduce control systems during the early stages of incubatee development” (Hackett et al., 2004). What can be added here are the conclusions of Scillitoe et al. (2010). This investigation focused on the networking abilities of the incubator management. For NTBFs this means that the management should be considered as a valuable source for information. The management is able to offer business and technical assistance, once the NTBFs, the incubatee in this perspective, is able to clearly show their needs. Moreover, incubatees should look for incubators that have a same background, in order to profit from highly relevant knowledge

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19 gained from the network contacts provided by the management (Schwartz et al., 2008; Scillitoe et al., 2010) or through knowledge spillovers by research institutions (Rothaermel et al., 2005).

As described in the forgoing paragraphs, the incubator’s organizational focus can be diversified or specialized. However, one needs to realize that a good fit between the incubator and incubatee is needed to have a potentially successful relationship. Furthermore, this can lead to an incubator not being able to supply the assistance or resources that are needed by the incubatee, simply because an understanding of these needs is not apparent (Autio et al., 1998). Therefore, the researcher needs to consider the business focus of the unit of analysis. This focus considers the phenomenon of crowdfunding. This will be discussed in the next section.

2.5 What is Crowdfunding?

Because crowdfunding is a new phenomenon, not a lot of academic literature is available. However, in order to get an understanding of the concept, crowdfunding will be elaborated upon with the use of the article of Mollick (2013). The definition stated in “The dynamics of crowdfunding: An exploratory study”, describes crowdfunding as follows: “Crowdfunding refers to the efforts by entrepreneurial individuals and groups – cultural, social, and for-profit – to fund their ventures by drawing on relatively small contributions from a relatively large number of individuals using the internet, without standard financial intermediaries” (Mollick, 2013). When simplified crowdfunding can be described as “the process of raising money to help turn promising ideas into business realities by connecting investees with potential supporters” (Ramsey, 2012). Regarding these two definitions, the ‘crowd’ plays an important role. The ‘crowd’ refers to a group of individuals with access to the internet. This does not mean that backers can be found offline. Here lies the strength of the concept of crowdfunding, since it gives the investees the possibility to reach out to a big group of potential investors. Finally,

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20 crowdfunding follows a different strategy than the traditional ways of funding, which are i.e. banks or venture capitalists.

The process of crowdfunding a project is a very extensive one. For an investee, multiple ways exist to get a project funded; several models will be discussed in the next paragraph. Besides the funds the investee raises, a potential group of customers is identified since this group expresses its interest in the project. This can be beneficial for retrieving further financial capital, since a target group is defined. Projects can range from a time project (i.e. a one-time marathon14_{) or an initial funding to start a company (i.e. a company that wants to start}

producing 3D printers15_{). Together with the developments of the online social networks over}

the recent years and the high degree of network dependability (Mollick, 2013), interesting opportunities arise for the concept of crowdfunding.

In order to get a project funded, a funding method needs to be chosen first. As can be seen in Figure 5 several models exist. These models will now be briefly discussed. The first model is the ‘donation-based’ model. The word ‘donation’ is typically referred to as a philanthropic act for which nothing in return is expected (Mollick, 2013). However in crowdfunding, immaterial acknowledgements often are offered (i.e. a ‘thank you’ on the website) (Hemer, 2011). Secondly, the ‘reward-based’ model is discussed. This model is the most popular in terms of successful crowdfunding projects (Mollick, 2013). It is based on the theory that a reward is offered for an invested amount of funds. The ‘backer’ of the project can select an amount to invest, which is connected to a reward. Thirdly, the research will give an insight in the ‘lending-based’ model. Simply speaking, the investor provides the project with a loan, which will offer an expected rate of return. This can be achieved by i.e. offering interest on the loan (Hemer, 2011; Mollick, 2013), but also by offering a share of the earnings made by

14_{“De Groene van Amsterdam”}_{http://www.voorjebuurt.nl/project/degroenevanamsterdam}_{retrieved on 9-4-2014.} 15_{“The Micro: The First Truly Consumer 3D Printer”}

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21 the venture (Hemer, 2011). This lending can take place from B2C, B2B or via social lending. Finally, equity can be offered in return for an investment. This means that a ‘backer’ receives a sort of ownership of shares of the venture. However, this form of crowdfunding is subject to a lot of regulations, making it the least popular form (Mollick, 2013). Moreover, the shares are available to investors without extensive screening, making it more complicated (Hemer, 2011).

Figure 5. Crowdfunding Platform Model (Crowdsourcing.org, 2012)

2.6 Crowdfunding Platform Models

Since the unit of analysis will be incubating crowdfunding platforms, a further understanding of the different models needs to be developed. Based on the article of Hemer (2011) an overview of several crowdfunding platform models will be given. Figure 6 shows a flow diagram of the crowdfunding process with the crowdfunding platform as a centralized aspect. The role of the platforms is to act as an intermediary between crowdfunders and the capital seeking venture. Hemer (2011) identified five basic models, which consist of (1) the “threshold pledge model”, (2) the micro-lending models, (3) the investment or equity models, (4) the holding model and (5) the club model. A short explanation is given below.

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22 The “threshold pledge model” is basically an agreement between the capital seeking venture and the platform that establishes a funding period and a targeted sum of money. When this amount of money is reached the project is considered successful and the amount of funds is transferred to the firm. However, in case no sufficient amount of funds is raised, the amount will flow back to the backers. This model is most used among platforms (Hemer, 2011).

Figure 6. The crowdfunding process involving intermediaries (Hemer, 2011).

The micro-lending model acts as a broker between individuals that are willing to lend out their money and project initiators that need money. The project-initiators create a threshold for the amount of money that they need. When the threshold is reached, the funds be returned to the lender based on the monthly payments agreed upon when the project started. For the lender an interest percentage is installed.

The investment or equity model offers equally sliced shares for a determined prices. A threshold is installed, which will become available after the desired amount is reached. The backer is then dependable on the fluctuations of the share price considering potential profits made. The holding model creates a subsidiary company for the fund-raising venture. This

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23 subsidiary company, or holding, then owns all the shares which are sold to the crowd. Finally, it will act as the sole investor in the fund-raising venture, next to the traditional sources of capital. Finally, the club model will be discussed. Due to regulations, investors might not be allowed to invest in a venture. Therefore, this model is established as a closed pool of potential investors. Because it is a closed group, regulations are less strict which then regards the members as “qualified investors” (Hemer, 2011).

As a final remark, the author wants to stress that the business models of the platforms are experimenting a lot in regard to regulations (Hemer, 2011; Mollick, 2013) and therefore some of these models may disappear and even new ways of organizing a crowdfunding platform may come into existence.

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24

3 METHODOLOGY

This section will address the methods used in this research. First of all, the research question will be presented, followed by a section that will discuss the concepts, definitions and models that are used in the research. Finally, the data collection and analysis methods will be presented.

3.1 Research Question

The research question of this thesis is based on a problem statement, identified by the researcher, through combining the objectives of the CrowdfundingHub with the literature review. The main goal of the CH is the development of knowledge; either gathering or sharing. Besides, the CH aims to be an incubator for crowdfunding platforms, however the organization of the CH is not based on extensive incubator knowledge. As set out in the literature review, the business incubator concept is generally associated with development, and therefore appears to be suitable in regard to the goals of the CH. Summarizing the above, the goal of the research is to investigate how the incubator process, as set out in the literature review, can support the CH in reaching these goals. Below the research question is stated.

Assuming that the goal of the CrowdfundingHub is developing and spreading knowledge on

crowdfunding; how can the business incubator process support the CrowdfundingHub in

reaching its goal?

In order to answer this main research question, several sub-questions were developed. These two sub-questions support the main research question by giving it two avenues of research. These can be found below.

First of all, an insight in the incubator process found at the different incubators has to be developed. Considering the collected literature on this topic, the researcher concluded that the specialization of this incubator, crowdfunding, has to be supported by a well-developed

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25 incubator configuration(Schwartz & Hornych, 2008). This is also the case for other specialized incubators that are investigated in this research. In order to be able to map these configurations the author will use the frameworks developed by Campbell et al. (1985) and Smilor (1987). This gives the author the opportunity to test the frameworks in different circumstances and different industries, as these frameworks are based on data derived over 30 years ago, and it will guide the research in creating an overview of the investigated incubators. Therefore, the following sub-question will be used.

1. Assuming that incubator specialization requires specific incubator configuration; how is the CrowdfundingHub different in terms of incubator configuration, compared to other incubators?

As the researcher identified a potentially important role for universities in regard to supporting business incubation processes, the following sub-question was formed.

2. What is the potential role of universities in regard to the contribution towards the incubator’s goals?

This sub-question will highlight the possible advantages, disadvantages and/or contributions of university affiliations found at the other investigated incubators and will give an insight of the current situation at the CH.

In order to get an insight in differences in incubator configuration and university involvement, case studies will be performed. Comparing the data distilled from the literature with the data derived from the initial meetings before the start of the investigation, showed that the central case study is not comparable to a specific form of incubator configuration. However, this is a preliminary conclusion. This gives the researcher the opportunity to add valuable insights to the research on incubators and their configurations and the other theories discussed in the literature review section. Finally, because a lack of research on incubatee needs is

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26 apparent (Hackett et al., 2004) and because crowdfunding can be considered a new phenomenon (Mollick, 2013) significant academic value is addressed.

3.2 Concepts, Definitions and Models

Summarizing the literature review, relevant concepts and definitions that will be used in the remainder of this thesis will be highlighted here. First of all, definitions for the main concepts of this thesis will be given. Whenever the researcher refers to an incubator, the following definition is applicable.

“A business incubator is a shared office space facility that seeks to provide its incubatees (i.e. ‘‘portfolio-’’ or ‘‘client-’’ or ‘‘tenant-companies’’) with a strategic, value-adding intervention system (i.e. business incubation) of monitoring and business assistance” (Hackett et al., 2004).

As identified in the literature review, the organization of an incubator and the business incubator process is referred to as the ‘incubator configuration’. This configuration is key in regard to the ability of reaching the goal of the incubator. Therefore, incubator configuration plays an important role, considering the research question for this thesis. Therefore, a clear description of this concept is needed, which is the following.

“The design of the incubator’s support arrangement, and describing facilities, budgets, organizational charts, geographical location, and institutional links” (Autio et al., 1998).

As the CH is active in a fairly new industry, it is important to understand how the underlying concept in this industry, crowdfunding, is defined. In this thesis the author will refer to the definition of crowdfunding developed by Mollick (2013).

“Crowdfunding refers to the efforts by entrepreneurial individuals and groups – cultural, social, and for-profit – to fund their ventures by drawing on relatively small

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27

contributions from a relatively large number of individuals using the internet, without standard

financial intermediaries” (Mollick, 2013).

Considering the fact that the author will investigate other incubators through the use of case studies, the theory discussed in the section dealing with background literature on crowdfunding will only be used for the analysis of the data gathered at the CrowdfundingHub. The investigation on the configuration of the incubators will be performed with the use of the following frameworks; Campbell, Kendrick, and Samuelson framework (Campbell, et al., 1985), for the internal activities of the incubator and the Smilor framework (Smilor, 1987) to get an insight in the external perspective. These frameworks will be used as a base to develop a semi-structured interview. The goal of these interviews is to get an understanding of the different (service) offerings, external affiliations and support systems. Moreover, the researcher will test the frameworks in the current conditions, as they date back to 1985 and 1987 respectively. Furthermore, the Allen and McCluskey continuum (Allen & McCluskey, 1990) will be used to categorize the investigated incubators and the value propositions as identified by Bruneel et al (2012) will define the ‘generation’ of the incubator.

3.3 Qualitative Research

The researcher chose to perform the research from a qualitative perspective, because it creates the opportunity to get an insight into as much dynamics as possible (Yin, 2009). With this wide array of dynamics, more rich data can be collected and a better understanding of the problems can be developed. Furthermore, Creswell (2007) identified qualitative research as a means to “explore a problem or issue”. In this research the explorative angle will be applied, with the goal to refine existing and build new theories, based on the research gap discussed before. Because the researcher wants to focus on the specifics and details of the incubators and their processes, a qualitative perspective is therefore identified as best suitable.

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3.4 Case Study Research

Because the research includes one research question and two sub-questions, of which one is specifically designed to compare several incubators, while the other has a more indirect comparison locked in the question, the researcher decided to perform a multiple case study research. Every investigated incubator will be regarded as a case study. These case studies were designed according to the book: Case Study Research: Design and Methods (Yin, 2009). As described in the “Theoretical Framework” section, the definitions and the incubator configuration frameworks were used to develop interviews for the case studies. These interviews are part of “the data collection protocol” (Yin, 2009). Figure 8 shows a quick overview of the case study research framework, as developed by Yin (2009).

Figure 8. Case Study Research Framework (Yin, 2009).

The access to the CH was established in the form of an internship; this gave the researcher access to a qualitatively extensive source. Furthermore, due to the access to several sources of data, the process of data collection was strongly supported. Examples of these sources are the personal networks of the partners active in the CH or the monthly

Develop theory

Define & Design

Select cases Design data Collection protocol Conduct 1st case study Conduct 2nd case study Conduct remaining case studies Write individual case report Write individual case report Write individual case report Draw cross-case conclusions Modify theory Develop policy implications Write cross-case report

Prepare, Collect & Analyze Analyze & Conclude

..

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29 ‘CrowdfundingCafé’16_{that was organized at the CH. Next to these personal networks available}

at the CH, contacts with other incubators will be made using email and telephone calls. In order to enrich the qualitative data, the data for this research was collected from two different sources; the interviews conducted at the incubator and secondary data analysis.

The incubators were randomly selected, however a certain degree specialization was needed. In this way, the researcher was able to avoid any preliminary conclusions in regard to the influence of universities. Furthermore, the importance of triangulation was significantly discussed by Yin (2009). Therefore the researcher will interview not only the management of the incubator, but will also use data from the incubator’s website and news articles related to or provided by the investigated incubators. This gives the researcher the possibility to check the statements made by the management by verifying these with other data.

The data is gathered through conducting six semi-structured interviews at three incubators excluding the CH. These interviews will be used for multiple case studies. Since the research question addresses a ‘how’ question, the method of performing case studies is chosen, because case studies are typically associated with these kind of questions (Yin, 2009). Multiple case studies are performed, because there are several units of analysis that form the base for comparison with the central unit of analysis, the CH. This gave the researcher the opportunity to analyze and compare the different organizations. For this thesis four incubators are investigated, including the primary unit of analysis.

3.5 Method of Analysis

The data collected in the interviews will be processed using Nvivo, which is regarded qualitative research software. Within this software, the researcher will use a combination of deductive and inductive coding (Miles & Huberman, 1984; Pratt, 2009) to categorize the

16 _{“CrowdfundingCafé Mixed Funding”} _{http://www.meetup.com/Crowdfunding-Hub/events/167067902/}

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30 relevant information collected in the research. The inductive coding was performed while processing the data, the deductive codes are developed before the data processing. These deductive codes were derived from i.e. the incubator configuration frameworks. This gives the researcher the opportunity to create an overview of all the topics discussed in the interviews, however in a more comprehensible manner. After this analysis, the outcomes will be provided and related to the theory discussed in the literature review section. This will be done by comparing the data collected at the other incubators with the data collected at the CH. The case of the CH will be central in the comparison with the other case studies. The researcher will compare the practices that are performed in regard to the incubator process, with an emphasis on the affiliation with the university, of the other investigated incubators with the central case study, the CH. This will be done by mapping the incubators through incubator configuration frameworks, so that the internal and external processes are identified. Accordingly, the practical outcomes of the incubator’s university affiliation will be investigated, so that insights are developed in this area. This will contribute to the understanding of the current and potential outcomes of university affiliation for the CH. In short, in this research the CH will be put central and compared to other incubators, in order to see how the incubator process works at the other incubators in regard to achieving their goals. The results will be presented by relating quotes from the interviews that were triangulated by comparing these with secondary data, with theories discussed in the literature review.

Due to agreements made with the interviewees, the investigated incubators or related organizations are anonymized. The anonymized names are stated in brackets, i.e. [Incubator].

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4 DATA COLLECTED AND RESULTS

This section of the thesis will address the outcomes of the research. In the coming paragraphs, the researcher will present the findings that were collected by processing the data, gathered from both interviews and secondary data sources. The findings will be connected to the sub-questions that were developed in the ‘Research Design’ section. After the sub-sub-questions are discussed the findings that connect to the research question will be elaborated upon in the next chapter.

In order to get a good understanding background of the incubators, the investigated organizations will be introduced. First of all a more detailed introduction of the CH will be presented. Afterwards, the other investigated incubators will briefly be introduced. As introduced by Ronald Kleverlaan, one of the founders of the CH, the CH has a special arrangement when it comes to the incubator role. He describes it as “The [Incubator] facilitates.

The core of the [Incubator] is that they supply free workplaces for self-employed people in the

general space, and they rent out meeting spaces. What the CH does is a sort of subset, a sort of

shop-in-shop. We deliver free workplaces, or almost free workplaces to our members. However,

the member have to rent the meeting spaces. They don’t rent them us, but from the [Incubator].

… So that is what we do, and next to that, we organize all sorts of activities and events and with that we attract more people. ” Next to this, the CH can be regarded as a non-profit incubator.

What can be concluded here is that the nature of the definition of the CH is pure facilitative. The CH has an arrangement with another party, which that is the supplier of the building and its workplaces. The CH is a sort of subset within the incubator, which focuses specifically on the crowdfunding sector. However, there is no juridical connection between the parties. Furthermore, Kleverlaan stated that the CH is more like a ‘co-workingspace’ for the connected platforms, consultants and researchers. Using the insights gathered by the author, a ‘co-workingspace’ is best described by the following quote “There are offices with private

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32 desks, desks that reside in a public space and “hot desks”, which allow access to someplace that could range from a table to a stool at a bar, depending on what’s available. About 25% of the space is for hanging out and other activities, with coaches, a rug, and a “coffee shop atmosphere”” (Field, 2013).

Regarding the other investigated incubators, different focuses were found. Due to the fact that interviewee anonymity was part of the research, no names are mentioned. The incubators had different fields of interest. These fields of interest, which can be regarded as specializations, are presented in Table 2. Furthermore, this focus is important for the selection of potential incubatees.

[Incubator 1, for-profit] [Incubator 2, non-profit] [Incubator 3, for-profit]

“Our target group is

knowledge-intensive

companies and organizations that are specialized in ‘high-tech’ or high-quality business services.”

“Our goal with our grant is to

strengthen the Dutch economy and bring economic growth through video games. So we have our incubation program were we focus on the startup game companies.”

“There has to be a link with

our existing activities and we have to be able to get useful knowledge out of the process in which they are looking for their product market fit.”

This incubator is part of a big Dutch publishing company and was established in May 2014.

Table 2. Incubator Focus

The processing of the collected data led to a range of codes that can be found in Table 1 of the appendix. As one can see, the deductive codes are based on the incubator configuration frameworks developed by Campbell et al. (1985) and Smilor (1987). Now the author will discuss the outcomes of this research, by comparing the outcomes of the three other incubators with the central case study, the CH. Furthermore, the author will discuss the overlap within the two frameworks, in regard to the theory refining aspect of this thesis.

Regarding the framework of Campbell et al. (1985), the all of the investigated incubators have some form of need diagnosis in regard to the incubatee. At this point of the incubation process, it is key to develop an understanding why the incubatee wants to join the incubator and what is needed to make sure that the incubatee receives the support it needs.

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33 Furthermore, the incubator can determine whether it is able to provide the services that are needed. When asked in the interviews, all the incubators stated that this already is a part in the selection process of the incubatees. Interesting in the quote below was the connection with an educational institution.

[Incubator 2] “But because most of our companies come straight out of school, they’ve

never run a business before, they’ve never had a company, they never had to worry about taxes, employees or should it be a VOF [LLP] or BV [PLC] or anything like that. So we help on that

side of it.”

In regard to the CH, there is a somewhat different approach. Here the incubator also has a facilitative nature for organization active outside of the incubator.

“Yes, because parties already approach us, and for a part me personally, but also partly

the ‘Hub’ like “yeah, I am working on a crowdfunding platform, what should I do? Or, where will I bump into? Or, where should I take into account?” Often you see that a lot of things, for

example juridical issues, are not taken into account.”

Once the incubatee has joined the incubator, the selection and monitoring of needs takes place. This part is closely connected to the ‘Support Systems’ defined in the Smilor (1987) framework. Therefore, the researcher combines the findings, in respect to the support systems, with the selection and monitoring of services in the Campbell et al. (1985) framework. Interesting to see are the differences among the incubators, in regard to the ‘Administrative Support System’. Only one incubator has a facultative package in regard to i.e. bookkeeping. So none of that is standardized among the incubators. In case of the one that offers a facultative package for the ‘Administrative Support System’, it was communicated as follows.

[Incubator 1] “The additional services that can be tailored and administered” and “Financial administration? Fill out some tax forms? For multiple companies we arrange the

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34 Where the other incubators do not mingle in the administrative processes of their incubatees. The interviewee of [Incubator 2] stated “Every company or business we don’t get

involved in their books or their taxes or anything like that, so they do all that on their own” and

[Incubator 3] claimed “They have to do it themselves, because if you want to answer to our

demands, it will be a big hassle. You should only want that if you are a bigger company.”

In the case of the CH, the incubator is also hesitative in regard to the supply of administrative support, shown by the following quote.

“No, that is something for themselves. We are not involved in the management of the

business. They have to do it themselves.”

In regard to the secretarial assistance, all of the incubators offer this service. Whether it includes i.e. a reception or renting out of meeting rooms. However, there are differences in the range of the services. For example, [Incubator 1] also offers a secretary, where the others don’t. Now the author arrives at the two most coded ‘Support Systems’ (Smilor, 1987), ‘Business Expertise’ and ‘Facilities’. First of all, ‘Facilities’ will be discussed. All of the investigated incubators have the supply of facilities at the core of their organization. When looking at the very basics of this ‘Support System’, it includes a physical office space, offering basic facilities, i.e. tables, internet. These are all present at the investigated incubators. However, there are some minor differences. For example, [Incubator 1] also offers access to labs. Furthermore, [Incubator 1] is very flexible in regard to the size of the offices as the incubator consists out of several buildings. The data derived from investigation [Incubator 3] gave the following results “You get an office space … and you can use all of our facilities.

There is a sports center, you can go to the restaurant, where you can have breakfast, lunch and

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35 The results also show that there can be some constraints in regard to the offerings as [Incubator 2] is financially supported by a grant and therefore can’t offer a specific set of hardware, demanded by the incubatees.

“So someone suggested having a hardware warehouse of different Android devices and

game devices that different people could borrow and test on, because we have certain hardware

that people can borrow; laptops and beamers and things like that to use for free. But it is point

in the grant, we’re not allowed to spend money on that sort of thing.”

When considering the CH, the offered facilities are very basic. When asked, the researcher got the following response “the core of the incubator is that they supply free

workplaces for self-employed people in the common space and they rent out meeting rooms.”

These offerings are very basic and consist out of internet, coffee and a table. Furthermore, the CH has its own office in the building where the connected parties have a workplace.

In regard to ‘Business Expertise’, identified by Smilor (1987), an identical process is found in the Campbell et al. (1985) framework in the form of ‘Access to expert networks’. All of the investigated incubators offer access to a network of experts, this can be internally of externally. One can say that this network dimension is key for all the incubators. The network can be used, for example for advice on juridical issues, the supply of coaching or access to HR expertise. However, networking events can be also be subscribed to this aspect of business incubation. Bringing this to the base, the access to business expertise in the network, either internal or external, supplies a lot of knowledge, both for the incubator and the incubatee. Common statements found in the research were “we [Incubator 1] possess a network of experts

where every entrepreneur has access to” or “next to that, a constant exchange of knowledge

and expertise takes place between entrepreneurs, investors, knowledge institutions and

Hatching the crowdfunding EGG : the case of the crowdfundingHub : a research on the role of the business incubator process in regard to the development of theory on crowdfunding