Financing an Incubator

One of the main issues when establishing a game incubator is financing. This is even more relevant when developing and running it in the long term. Staff (mentors, administration, etc.), office space, laboratories with soft- and hardware, participation in external events, external experts, fundraising, and so on, all comes with a price, and not necessarily a small one. Therefore, deciding on the incubator’s main funding source is essential before starting. Equally important is to strategically plan ahead.

To be able to do this, you must calculate what kind of costs you are facing at which point in the development of your incubator. One fundamental decision should preferably be made as early as possible: Should the game incubator be publicly funded? Should the incubator be privately funded? Or should the incubator rely on income from selling services directly to start-ups? Naturally, a mix of all three or of two of these options is most often the case. The most important thing is to plan for an intelligent and effective mix that is robust and sustainable through backup funding or income plans.

Most incubators operate like start-ups themselves. They need to make ends meet and therefore will make decisions that are for “survival”. This has implications for resource planning, just like the incubator’s goals and basic setup.

Revenue Streams – Incubator Examples

Game Hub Denmark (DK) – public funds (regional and local authorities), universities, through projects (e.g. EU grants)

The Game Incubator (SE) – public funds (regional authority, local municipality, tech park owned by universities and municipalities), private funds (Science Park Skövde – ownership association), through projects (e.g. EU grants)

Living Game Intelligence Network (formerly known as Farm League; FI) – public funds (regional and local authorities), private funds (game enterprises), through projects (e.g. EU grants)

Digital Dragons Incubator (PL) – public funds (tech park owned by public authorities, regional and central authorities), private funds, through projects (e.g. EU grants)

Carbon Incubator (RO) – incubator takes revenue share of games launched by participating companies

STING (SE) – equity model (start-ups give STING a certain stock percentage), through projects (e.g. EU grants)