County develops business incubator

Rachit Shukla had run out of options in Orange County.

After Shukla, CEO of the start-up Two Toasters, moved to Carrboro from Raleigh in May 2009, he soon found that his small company that builds iPhone and Android applications had outgrown its location.

“There wasn’t a space in Chapel Hill,” Shukla said. “Given the close proximity to UNC, I think it would be a great place to start things off.”

Now, the Orange County Board of Commissioners is working to prevent more stories like Shukla’s from happening again.

The county is in the early stages of developing a business incubator, said county Economic Development Director Gary Shope.

County officials hope to use an existing commercial space, possibly in Chapel Hill because of its proximity to the University, he said.

“We’re developing these great minds to make these great companies and then we’re letting them leave,” Shope said.

In March, Shukla moved his company to American Underground, a space Durham supported to attract companies by providing a flexible office space.

Durham has supported other programs to give new businesses a home, like the Bull City Start Up Stampede, a program that will award about 15 start-up companies with free office space.

“When we were moving to American Underground, someone actually reached out to me and wanted to sit down and talk to us about our business,” Shukla said. “The fact that they have done this has had a positive impact on folks.

“Certainly, had they created (an innovation space) in Chapel Hill there would have been no reason for us to move.”

County officials said they think an incubator would keep young entrepreneurial companies, and their capital, in the area.

“UNC is a leading research university, and people who do research at UNC need a place to capitalize,” said Commissioner Barry Jacobs.

The project would be funded in part by a quarter-cent tax increase if voters approve a referendum on the Nov. 8 ballot. Voters rejected the increase on the November 2010 ballot by 51 percent to 49 percent.

Chapel Hill has already implemented programs like the Small Art Business Loan Program to help small businesses get started, said Town Economic Development Officer Dwight Bassett.

The program provides $40,000 to target art-related businesses that can act as small economic engines in driving additional traffic to downtown.

Chapel Hill awarded the first loan to Franklin Street’s FRANK art gallery in 2009, which helped them to open months later.

But with its successful programs, Chapel Hill still lacks a home to host the businesses. Bassett said while there is interest for such a space, the demand is unknown.

This year, Chancellor Holden Thorp has worked to make innovation his lasting legacy with the Innovate@Carolina initiative.

Programs to house innovation are important because space for entrepreneurship is limited, said Judith Cone, special assistant to the chancellor for innovation and entrepreneurship.

“Any place with 28,000 students and 3,000 faculty is a good place for start-ups,” she said.

“What happens to (companies) is when they get born here, they find nooks and crannies here and there. You don’t get any synergy when you disperse.”

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