Part I of this three-part series covered the co-working concept and what additional resources business incubators can offer. Now in part II, the CED blog will take a deep dive into three of North Carolina’s business incubators, specifically HQ Raleigh, Launch Chapel Hill, and American Underground in Durham.
In 2012, HUB Raleigh opened on Hillsborough Street in a 4,700 SF space, and the response was overwhelming. They rebranded to HQ Raleigh and moved to the warehouse district in 2014. They now occupy over 48,000 SF in Raleigh including their new space, which occupies the top five stories of the Capital Club. When walking into HQ Raleigh, the quickly-expanding business incubator in downtown Raleigh, it is anything but your typical office environment. With its long counter, expresso machines, refrigerators, and beer taps, it looks like a cafe or bar at first glance. There is a large open seating area with games such as ping pong in the back. Beside the stairs is an enormous sculpture by Jonathan Brilliant, comprised of of over 30,000 wooden coffee stir sticks woven in place and held together only by tension.
Another location on Glenwood South in Raleigh is also planned. They have expanded geographically as well, opening HQ Greensboro and HQ Charlotte. Since its inception the demand has always outpaced the supply. Companies must apply, so that HQ Raleigh can maintain the startup culture and ensure all companies align with their core set of values and their calendar is packed with programming. NC State’s Entrepreneurship Clinic, located in the back corner of the building, offers a guided path for students trying to start their own companies. HQ currently helps 150 companies working out of their space, and they have helped over 500 across the state.
Launch Chapel Hill
One year after HUB’s debut, Launch Chapel Hill opened as a partnership between The University of North Carolina, the Town of Chapel Hill, and Orange County in 2013 with a shared mission to support the startup community while engaging entrepreneurial students with real-world experience. There is a tight integration between Launch Chapel Hill and the Kenan-Flagler’s Center for Entrepreneurial Studies. Launch occupies 7,000 SF on Franklin Street in downtown Chapel Hill. Their space is split, with half used for their accelerator program and half for private offices.
Their accelerator program is unique in its process and programming. Launch holds applications twice a year for their “Cohort” which is a small group of 12 startups that go through a rigorous and in-depth program run by business professors, experienced entrepreneurs, and venture capitalists. After the program, companies can rent out unassigned or private offices. 94% of companies from the program are in business one-year out and 46 of the 75 companies that have gone through the program are still in business, showing a very high success rate. It has also sparked a vibrant startup community in Chapel Hill. Companies from the programs have created 1,100 jobs and over 40% of all companies were primary founded by students.
Close by in Durham, American Underground opened in 2010 in the newly revitalized American Tobacco Campus in downtown Durham by Capitol Broadcasting Company. They have grown to four prime downtown spaces (including one in downtown Raleigh) that support 275 companies. The space feels like Google’s campus was shrunken and placed in the middle of Durham. The roof-top deck has beautiful views of downtown Durham, and they boast some unique amenities, such as graphics on the wall from Mario Brothers, a Star Wars themed hide-out spot at the base of a staircase, and a giant indoor slide that leads to an arcade.
American Underground has a partnership with Duke Innovation & Entrepreneurship and specializes in technology startups. They offer tech-specific benefits like fiber internet and discounts on cloud computing resources. Another specialty of American Underground is that 48% of companies are female or minority-led. Last year alone American Underground companies created 600 jobs and raised $39.4M in funding.
Despite the close proximity to each other, once can see the differences between each of these incubators. Most incubators tend to have a very strong culture and purpose. There are business incubators that are very specialized such as the AgTech Accelerator in Durham which focuses on companies in agricultural technology or Blue Ridge Food Ventures in Chandler that helps companies produce and package food items that have to be made in an expensive commercial kitchen. They all help take companies from ideas to thriving businesses.
Keep an eye out for Part III, which will examine the impact of these startups on North Carolina’s economy as well as recent trends.
Robert Smith is a 2018 Master of Business Administration graduate with the Kenan-Flagler Business School at UNC-Chapel Hill. He was also a Community Revitalization Fellow with the Development Finance Initiative during his graduate school career.