June Lavelle is thinking twice about taking free money. After running her nonprofit Chicago incubator for 10 years, this "mother of invention" (see "Mother of Invention," October 1989, [Article link]) insists that pinning regimented nonprofit funds to ever-changing start-ups was like "trying to fit a round peg in a square hole."
So Lavelle has turned her attention to incubators for profit and recently opened her first one. She explains her reversal by lamenting the strings attached to free money. "Grant money comes all in one clump," she says. "The sum can be too much for the start-up or too little -- but that's it, there's no flexibility." Lavelle also contends that most start-ups need at least $20,000 worth of consulting time, but public funds allow only $5,000 and often less. "I've come to believe that to make this work it's got to be private money . . . otherwise it's too hit or miss."
-- Elizabeth Conlin