Recently, someone asked me, “How do you make a training center for entrepreneurs to be self-sustaining and not just dependent on investors?”
And I nearly threw a stapler.
Not because the question isn’t valid, because it is, but because we’ve been answering it for decades. The model exists. It’s tested. It’s been done over and over. It’s called an incubator. Not an accelerator (learn the difference), not a coworking space with startup murals and $5 coffee, but a bona fide startup incubator. And by the way, not a venture or startup studio, which I just covered here. All of these organizations were designed to be self-sustaining. And yet here we are in 2025, still asking how to build something we already know how to build –> because most people have either never seen one that works, or they’ve turned it into a parody of itself, sustained by pitch competitions and hopeful grant applications instead of actual economic purpose.
But let me give credit where it’s due. The way the question was phrased is telling: “for entrepreneurs to be self-sustaining.” I know what was meant (how can the center be self-sustaining) but let’s not ignore the Freudian slip. Because the reality is, we’ve created entire ecosystems where entrepreneurs themselves aren’t self-sustaining, and no amount of “training” is going to fix that. Why? Because you can’t train someone to become an entrepreneur. You either are or you aren’t. You can teach finance. You can teach marketing. Heck, you can teach HOW startups work; you can’t teach someone to be a capable founder. You can even teach how a cap table works. You cannot teach the mindset required to risk everything for an unproven idea.
So, let’s pretend the question was: how do we build a place that helps those who already are entrepreneurs survive, thrive, and do so without being leashed to investors? And let’s answer it the way it should be answered: by recognizing that the founders aren’t the ones who should be paying.
First, let’s kill the myth: “dependent on investors.” That’s not how incubators survive, nor should they. Investor support? Absolutely. But dependency? That’s a crutch. If the investors in your region aren’t sponsoring your incubator, stop giving them deal flow. Let them feel the consequences of freeloading off the system they claim to support.
Because here’s the thing, every rookie makes the same mistake: they try to make the incubator profitable by charging the startups. Rent, equity, program fees, like these founders aren’t already mortgaging their futures on the hope of product-market fit. Startups are broke by design. If your revenue model depends on extracting money from founders, congratulations; you’ve built a school for dropouts that can’t pay tuition and won’t graduate.
A real incubator is built like a refinery. The crude oil? Entrepreneurial ambition. The output? Investable businesses, licensable IP, validated markets, trained teams. The monetization? Upstream, from those who benefit: governments, universities, corporations, banks, foundations, economic development arms, and yes, investors. And if those people aren’t paying? They’re leeches, not partners.
Build the model the way it’s meant to be built and known to work.
Article Highlights
The Incubator Business Model
1. Anchor with Public Benefit Capital
You want self-sustaining? You want impact? Then act like infrastructure. City and state governments will fund job creation, workforce readiness, and innovation hubs, if you prove you’re not another entrepreneurial Disneyland with a foosball table, some interns, and a mural. Offer verifiable economic value: certifications issued, teams formed, revenue generated, jobs created. Think JETI agreements ((Jobs, Energy, Technology & Innovation) with actual teeth.
2. Bundle With Real Estate (the Smart Way)
The best incubators never paid for space. Why? Because their presence adds value to the property. And in cities that “don’t get it,” property owners expect incubators to pay for space like any other tenant, missing the point entirely. You subsidize the space with the ecosystem itself. University labs, service providers, corporate teams, and conference programming all want access. You give them that, and they help pay the rent. Not the startups. Ever.
3. Develop IP and Commercialization Services
If you’re not helping founders commercialize IP, you’re not an incubator—you’re a meetup group. Real programs provide SBIR grant support, IP counsel, tech transfer navigation, and licensing frameworks. That’s what corporate sponsors should pay for: early insight and early access—not ownership. Proximity, not extraction.
4. Create a Flywheel That Pays Dividends
Not a metaphor. I mean a real financial engine. Launch a community-funded SPV. Get your law firms, angels, and philanthropic backers to fund services (like accounting, legal, GTM) and in return, you get a slice of equity in-kind. Do that across dozens of startups, and within 5–7 years, you’ve built a real portfolio. One that creates long-term sustainability, without charging founders. Curious how and why that works? Here’s how funding flywheel.
5. Understand and Expect the Right Sponsors
Stop begging for scraps. The banks, law firms, software development firms, marketing agencies, and VC firms who claim to support entrepreneurship? They owe you. Full stop. They benefit from better founders, from more startups, from talent development, and they have the capital to fund it. If they’re not sponsoring your program, they are exploiting your community. Call them out or cut them out. Either way, your program doesn’t exist to feed them free deals.
If you’re building a startup development organization and treating the founder as the customer, you’ve misunderstood who’s hungry, and you’re charging the only people in the system doing all the work. Founders have time, not money. Everyone else (governments, corporates, universities, investors) has money but no time (or know how).
So, sell them time. Sell them outcomes. Sell them access.
Access to trained talent. To validated IP. To fundable ventures.
That’s what makes your training center sustainable.
So, how do you build a training center for entrepreneurs that’s self-sustaining and not dependent on investors?
You don’t charge the entrepreneurs.
You charge everyone else for the privilege of benefiting from what those entrepreneurs become.
If you’re still asking this question, stop reinventing startup development organizations. We already know how to do this. The problem isn’t the model, it’s that too many people are still trying to profit from founders instead of backing them. Flip the entire script if you really want to make a difference.
Absolutely! Thanks for saying it.
There is such a wide range of incubators… the free programs, in my experience, have poor outcomes. The ones that charge, even a nominal fee, have good outcomes.
In my own incubator, we’ve had free people and paid. Nearly all the free people dropped out and never pursued their business. They did not have grit, nor did they value excellent advice because it was free.
Sometimes, you get what you pay for…
Mercedes Bankston charge an enrollment fee or something? Yes. But charging the entrepreneur treats it like a school, it’s not a school, it’s an engine that develops better founders and startups – the entrepreneur is putting in the labor; the investor, lawyer, local government, etc. benefit <- they're the customer.
NO program should be free. Incubators should be charging customers; entrepreneurs aren't the customers.
Better part of why the so-called free programs suffer is because they aren't discerning about who can participate, who can advise, and who gets to help. Which is where we agree – that yes, when those "customers" are able to participate for free, they peddle their junk at the expense of the people putting in the work.
Demand that customers (investors, corporate ventures, lawyers, marketing firms) PAY to be involved, and they''ll hold the quality of a program to a higher standard.
This.
Hey! Next time I’m in Arizona, let’s touch base. That’s home in many respects.
Excellent advice Paul O’Brien Check it out Ivana Stephen Charlie Jo Brodie
Alex Bertram would seem like I should do another deep dive on Australia
https://seobrien.com/aerospace-adelaide
Alex Bertram Thanks mate! A great read. validating!
Great advice, thanks for sharing!
Jeff Mustin, J.D., M.B.A. What I was getting at but wasn’t able to articulate as well!
The current model is broken. Has been for decades. When 95% of businesses coming out of the 4300+ incubators/accelerators globally don’t exist 2 years later, take the hint. That’s why we created my previous business (in 2014) that proved that our idea was sound. And, why we created OrlandoPreneur in 2022: to offer REAL assistance to startups and small businesses, to teach them what others don’t (which obviously hasn’t worked for them, but is creating massive impact for our members), and will eventually – as we build – offer true value and benefit for all startup ecosystem members in our area. That’s the start. Thanks for bringing this issue into perspective.
Paul O’Brien brilliant article and points made. Awesome spending time with the Space Workforce Incubator for Texas (SWIFT) crew, Glenn Hamer – Texas Association of Business, Gilbert Zavala – Opportunity Austin, my New Space Hub teammates, Space Force Association, space thought leaders & you at our monthly #Texas #EcosystemSpace Leadership gathering on Thursday.
Love this! ‘Charge everyone except the entrepreneur’… That flipped my perspective. Building around founders instead of squeezing them dry just makes sense. Curious, what’s one overlooked way to bring in public benefit capital?
Do you offer consulting services for start ups, and per this on-point article, your expertise for a piece of the future?
We have a big idea and it is well along the way to success, but could use some help!
Thanks
I do Sam, that’s all I do; though, not usually for startups if that’s what we’re talking here, I’m usually engaged by governments, VCs, and other ecosystem stakeholders. Message me what you’re working on.
thanks. Do I do it through LinkedIn or another is there a better way? thanks
LinkedIn is best. Here even, unless you want to just share it in the comments
upgraded to the 30 day free trial on LinkedIn and sent you a wordy project Overview. Fun way to pass a Saturday!
Dude, love your writing. Thanks for just being real
Thank you
I started years ago, and learned in time that what keeps me going is writing for myself, it’s how I think.
How others respond is feedback, it’s input, but it’s not why, for me.
I’m processing my world.
Means a lot that it matters to some.
Paul O’Brien , would love that.
Mercedes Bankston valuable insight. Jay Cooper
Paul O’Brien The problem with corporations is they actually are not that interested … I’ve watched the accelerators who lived off these special programs and know the corporate people showed up to one or two accelerator meetings. They are not invested.
Corporations are happy to help sponsor and pay, but they send less experienced people to look at innovation.
Mercedes Bankston for sure, which is why placing them properly, as what they are, given what they want, is critical.
Corporate Startup support is actually a PR play (branding) for the sake of HR.
They want to appear to be more innovative because it helps the brand seem so.
They’re also only looking for the threats or deal flow, not to help (besides, their help is corporate, not entrepreneurial). All the need is a Jr. community oriented rep to show up, someone who probably just says how great they care.
Take their money. Put in their logo and get some PR for them. Write up and promote their cool stuff. Put the rep in the corner.
Speaking from experience, corporate startup programs live and die by the person at the head of the initiative.
Once that leader leaves moves on to a new opportunity—via a promotion or new job—that program tends to die on the vine, and the funding for startup programs dies with it.
It’s hard to forecast the financial viabilty of your accelerator or incubator on the whims of someone else’s career. I’ve yet to see a corporate program last a year after the figurehead checks out.
Martín Martinez so disturbingly true when we KNOW that startup success requires tenacity, grit, passion, and perseverance — why the hell do all the people who abandon things for a job, get pulled into these roles? Focus on the person who is determined to serve startups.
Agreed. From my experience it would nice to see accelarators incentivized to focus on PMF and helping nascent startups find new customers while also preparing new Founders to become investment ready.
Martez Knox yep. Define lanes, stay close to them, and deliver value, not just workspace, meetings, and events.