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In former Soviet Union (FSU) countries, government incubators have not proven to be successful and sustainable, as the support for incubators in most cases depends on individuals on government level, which change very often. BII Georgia has developed an approach combining business approach with ultimate goal of economic and civil society development.
One of the key differences between start ups in developing and developed countries is the material and financial position of entrepreneurs. While in developed countries they mostly have financial cushion and savings to pay for incubation services, in developing countries starting entrepreneurs lack necessary financial resources. This factor forces incubators lacking long term government or donor support to seek for suitable model of revenue stream to secure financial self-sustainability. The most relevant and natural way is equity or royalty agreements with tenant companies. However, this path contains major threat of excessive dependence on clients' profit and complexity of managing such revenue model. Nevertheless, BII Georgia has chosen the latter model, maintaining equity in tenant companies in exchange of services and providing operational revenue for the incubator.
The equity model provides high level of incubator staff motivation, turning them from bored, unwelcome and low qualified state bureaucrats into businesspeople, extremely interested in success of their clients. At the same time, the major sources of entrepreneur distrust to consulting companies in FSU countries - lack of quality and self success story of consulting company - is overcome.
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