Drawing from social capital theory, the authors examine the relationship between family capital characteristics and new venture start-up rates in the United States. The results of this study improve the understanding of (a) how families matter in an entrepreneur’s decision to start a business, (b) how wealth and health care considerations affect the start-up decision, and (c) whether and how these effects differ among the largest ethnic groups in the United States.

The purpose of this study is to construct and to test a model that illustrates the incubation process and project business incubation outcomes. Following a discussion of the nature and function of business incubators, real options theory is used to develop a theory of business incubation. A model of this real options-driven theory of business incubation is presented, along with three hypotheses generated by the model. Taken together, the hypotheses suggest that business incubation performance is positively related to selection performance, the intensity of the incubator's monitoring and business assistance efforts, and resource munificence. Data from a 2004-2005 survey of 53 incubator managers are used to test the model. Analysis of these data does not support the hypotheses suggested by the model. The implications of the model's failure to predict incubation outcomes are explored.

Due to a lack of valid and reliable scales, few studies have sought to describe and measure the business incubation process. After rigorously developing and pre-testing scales intended to measure the incubation process (Study A), we collected data from 53 incubators operating in the US in order to (a) systematically examine the incubation process, and (b) validate the scales. Accordingly, this study offers (1) new, validated scales for measuring the process of incubating new ventures, (2) empirically-based refinements to a theoretical model of the incubation process, and (3) data on business incubation outcomes that are very useful for incubator planning and benchmarking purposes.

This article employs real options-theoretic reasoning to develop a theory of business incubation. This theory seeks to predict and explain how business incubators and the process of business incubation increase the likelihood that new ventures will survive the early stages of development. It conceptualizes the incubator as an entrepreneurial firm that sources and macro-manages the innovation process within emerging organizations, infusing these organizations with resources at various developmental stage-gates while containing the cost of their potential failure. The incubator is the unit of analysis while incubation outcomes—measured in terms of incubatee growth and financial performance at the time of incubator exit—provide indicators of success. Our model of the incubation process and specification of the range of possible incubation outcomes offer implications for managerial practice and policy-making vis-à-vis incubator management and good entrepreneurial failure.

This article systematically reviews the literature on business incubators and business incubation. Focusing on the primary research orientations—i.e. studies centering on incubator development, incubator configurations, incubatee development, incubator-incubation impacts, and theorizing about incubators-incubation—problems with extant research are analyzed and opportunities for future research are identified. From our review, it is clear that research has just begun to scratch the surface of the incubator-incubation phenomenon. While much attention has been devoted to the description of incubator facilities, less attention has been focused on the incubatees, the innovations they seek to diffuse, and the incubation outcomes that have been achieved. As interest in the incubator-incubation concept continues to grow, new research efforts should focus not only on these under-researched units of analysis, but also on the incubation process itself.