A recently case study of US Betaworks by the New York Times, threw into relief the story of Iain Dodsworth, a London programmer who in 2008 cobbled together TweetDeck to gain immense fame, a flood of investor inquiries, but only one welcome approach from the well knownNew York city web services technology firm Betaworks

“Money is nice," Dodsworth (right) is quoted saying. " But I actually needed expertise more than anything else. Betaworks had a track record in this field back when no one had a track record in this field.”

Betaworks has become prominent in for helping entrepreneurs fine-tune and expand their companies, guiding some entrepreneurs to lucrative sales, helping others raise cash from notable New York and Silicon Valley investment firms . The NY Times points out such incubators are familiar in more established tech hubs as Silicon Valley with technology incubator  Y Combinator, or Pasadena with Idealab (created Picsa, then sold it to Google.)

UK incubators are not proactive
The intriguing point to the Dodsworth story is not that Betawork came to his rescue, but that no UK incubator thought to approached him.

UK Business Incubation (UKBI) currently, claims around  300 incubators in the UK, (strenuous digging finds about a dozen of those, mostly University fledglings in Scotland.) These support in excess of 12,000 dynamic, creative and innovative businesses. They support ICT, bio, science, technology, creative industries, social enterprises and a wide range of entrepreneur with no discrimination as to physical, age, or gender. A business incubator is to support world class ideas and serve as a launching mechanism for young and small businesses.

Over the last 9 years, UKBI (the international membership and best practice body) has measured the impact that incubators have on the local economy and workforce.  Its research shows an incubator's client businesses provided an average of 167 jobs (full time equivalents) per incubator and are home to an average 30 client businesses.

Some 60% of incubators operate "outreach" service, helping and advising companies outside incubators and those operating outreach support an average of 150 additional businesses. Across the sample, an average of 75% of client companies’ had turnover up to £500,000, only 1.5% had a turnover of greater than £5m.

But business incubators have an average 98% of business success  whilst in the incubator (compared to a national average of less than 50% of all small and medium sized companies registered) with 87% still surviving after 5 years from startup.

Incubator preoccupation = finance
Simon Jenner, (left) who heads up Incubation Entrepreneurs for the Future (e4f) at Birmingham Science Park notes: "Access to finance is one of the biggest challenges for businesses, not least startup businesses and we have to find a way of giving the startups the financial life blood they need.

"We do have an issue with funding tech businesses in the UK and Iain Dodsworth probably thought it was easier to find money in the US. That may not be true, it just appears as if it is (they publicise their funding better).

"What the US does, or did very well was take risks. I don't think the UK VC market would have taken a risk like Twitter or Facebook. However, things are changing and more UK VC's are starting to get it," he notes. "Rummble.com - where you are and what you like - (London based) just got funded by M8 Capital (London based), I think we will see more of this over the next few years."

Scotland articulates some successes


In Scotland Hilary Singer, (right) the programme coordinator for the Edinburgh Pre-incubator Scheme (EPIS) echoes Jenner that the funding situation is generally considered to be more difficult and competitive than in the US. "As a result, incubators play an even more important role in Scotland and the UK than elsewhere, particularly true in the case of high-tech startups, which are obviously high risk, but also offer the best possibilities for high growth.

"For these companies," she says, "it can be incredibly difficult to get seed funding to get off the ground. Within the incubator,  however these startups have a chance. I'm thinking of companies like Burdica Biomed, a biotech company that came through the Edinburgh Pre-Incubator Scheme and signed a multi-million pound contract with a Chinese distributor earlier this year."

"Ultimately," adds Singer "our goal is to cultivate the sort of environment that generates a Scottish "Twitter" even a Scottish "Google." Though we aren't there yet, we can articulate some real successes. Since 2004, EPIS has supported the formation of 50 high-tech Scottish companies. Some hot companies to watch: Flexspansion, Pufferfish, Interface3."

Interfacing Angels & Incubators
There is another development in this sector and it's coming with a new model for private sector funding. German Serial entrepreneur Lars Hinrichs (founded social networking Xing selling it to Burda Media for an estimated €48.3) is putting his own investing twist on the incubator concept.

Hamburg based Hackfwd is a seed investment company focused on the European software entrepreneur. Similar to standard incubators, equity is offered in exchange for advice and coaching to help speed the start-up. The new take is on a proactive approach to the people being backed.

Hackfwd "puts geeks first' finding software coders who may not even be looking at company start-up. "Coders are the guys with the most innovative ideas, not the guys in the suits. But inspiring people are often employed elsewhere. The idea is to free Europe's best developers from their day jobs."

Hackfwd will locate talented individuals and lure them away with an offer to match their current salary for a year, so they can work on developing their own ideas."

"The venture capital system .... can't support small investments and doesn't have time to give strategic or creative input," says Hinrichs. “We don’t have a single hot European company among the top technology companies in the world, but I am convinced Europe has as many great thinkers as in Silicon Valley."

Simon Jenner concedes "Things are going to be more difficult over the next few years because of the economic conditions." But he urges: "This is when we should be concentrating on supporting businesses with high growth potential. High growth businesses produce more employment and wealth generation than any other type so we need more of them.

"What these types of businesses need is intensive support, easily achieved through an incubator model which can interact and provide support on a minute by minute basis. This is not just desks or office space, this is incubators that actually provide a support matrix for high growth businesses. There are less of these incubators currently, and more that just provide desks."

Hunting for Angel or incubators in Scotland?
Here are some links to get you en route. On the side of UK angels, the six year old British Business Angels Association (BBAA) created with Government backing,  has grown to almost 100 organisations, the vast majority of UK business angel networks, over 20 early stage venture capital funds, and professional service providers and advisers, accountancy, law, corporate finance, banks, regional development agencies, universities and public policy-makers.

But if you examine its Angel Networks  six claim to be national against 18 devoted to regional England and Welsh and the Venture Capital membership  numbers 20

Fo Scotland LINC  claims to be the Scottish Angel Capital Association with input from Scottish Enterprise, the European Regional Developent Fund (ERDF)  and its corporate partners: Anderson Strathern, Blackadders, Burness LLP, Harrison Goddard Foote, DC Consulting,
Henderson Loggie, MacRoberts LLP, MBM Commercial, McClure Naismith, Morisons LLP, Saffery Champness, Scott-Moncrieff, and
Wright Johnston & Mackenzie

Then there's also Angel's Den Scotland  offering Angel funding for great ideas or great local ideas for Angels investment.

For really serious investing
Founded 2009 £34m Panoramic Growth Equity (PGE) business does look at growth funding. Scottish Equity Partners (SEP) Scottish Financial Enterprise (SFE) handle sizeable investments. In 1999 Scotland's deals amounted to an aggregate £262m in 2000 invested in 125 companies, according to the British Venture Capital Association (BVCA) who have a new economist, Colin Ellis (right).

In the north there's Scottish Equity Partners (SEP), the Glasgow-based independent venture capital firm specialised in technology investments, Dunedin Capital Partners  and Penta Capital. Edinburgh-based Standard Life, Europe's largest mutual, is advocating marriage to millionaires has a major presence in the private equity market
Perth headquartered, York and London offices, Braveheart Investment Group  is also a serious player.

For Scottish Innovation Centres
Innovation Centres (Scotland Ltd) comprises:
Alba
Hillington Park Business Incubation
Interactive Scotland
Wellness & Health Innovation
Wireless Innovation

Craigmillar
Dundee incubator
Edinburgh EPIS
Glasgow Business, Biomedical and Technology complex
Strathclyde University Incubator
Stirling University  But ignore the Sure bit, its a Florida-based Incorporation service.
St Andrews University and Santander may have six month incubators spaces for the development of business plans.

Happy hatching!