When the New Jersey Business Incubation Network lost incubator seed grants and $1.2 million in annual public-sector funding — funneled through the now-defunct state Commission on Science and Technology — in 2010, President Suzanne Zammit had to be resourceful to fill a crucial financing gap and get the incubator sponsored by Rutgers University's Camden campus back to a self-sustaining model.
"At one time, this was going to be a two-tier incubator, with a high-tech center on the second floor and a wet lab on the fifth floor," said Zammit, who is also the director of Rutgers Camden Technology Campus Inc. "But then the recession hit and we lost our funding, and it kicked off a lot of struggles. We had to restructure the entire focus of this incubator and reduce its size. We used to be on the entire second floor, but now we only have half that office space."
Small Business Week: Rollout Racquetball
Complete NJBIZ Small Business Week coverage
According to Zammit, 19 companies have graduated since the incubator's inception on the Rutgers-Camden campus in 2002, and 16 have located within the region, generating $56 million in revenues. Twenty-four early-stage companies currently call the incubator home, and in the last year and a half, the incubator has graduated five companies — four have stayed in Camden, and two of those are renting space within the building from the state Economic Development Authority. Zammit said two office spaces are currently available, but she just leased one and received an application for the other.
"Some companies stay here up to four years, and we can do another year if they need it, but after that, the rent goes up to the market rate," Zammit said. "When they're ready to graduate, we don't have to sell them on staying here. Businesses that come in here are excited about our mission for economic development for the city of Camden, and they want to stay in the Camden community after they leave here. But finding the space to move into that they would be happy with is challenging."
In the three years since the network's 12 incubators throughout the state lost public-sector funding, the Rutgers-Camden incubator has relied on a number of partnerships with accountants, lawyers, consultants, angel investors, venture capitalists and established entrepreneurs in the area to provide financing, coaching and client services free of charge, Zammit said.
"Before the state funding went away, we used to be able to provide vital subsidies for things like equipment and sending companies to trade shows," Zammit said. "Now, we have to be well networked in the community, and we sponsor different kinds of events to help these businesses grow."
The most in-demand events within the incubator are Lunch and Learn group sessions, where representatives from local firms talk about what they can offer startup companies to get them off the ground — with the hopes of one day serving them as clients, Zammit said. At a Lunch and Learn event last week, PFI Financial LLC introduced an alternative to venture capital for early-stage companies that sell products, where the firm provides a same-day invoicing service to give businesses cash up front, then collects from their customers on the back end.
But Zammit said the Rutgers-Camden campus supplies the most invaluable resources, as it offers full-time staff, a steady flow of interns and a graduate course in business consulting each spring that pairs students with the early-stage companies to complete specific projects, like deploying a marketing strategy.
"Rutgers-Camden knows the incubator is not a profit center. They do provide funding, and they try to match what the commission was giving us," Zammit said. "I don't know what will happen with the merger, but I think the campus would still sponsor the incubator. It's not going to go anywhere."