Policies & Procedures

MCED makes a substantial investment of time and resources in its entrepreneurial companies. As an organization that solicits private funds, MCED must be conscientious in the due diligence process before admitting a company into the program. In addition, limited resources mean that only a limited number of spaces are available in the incubator program.

MCED staff analyzes a company’s technology, available resources, entrepreneurial experience and need for MCED services, in order to determine its growth potential and probability of success.

Possible admission decisions include: 1) rejection of the application, 2) acceptance for immediate admission to the program, or 3) conditional acceptance. Companies accepted conditionally are admitted on a 90 day conditional basis. During that time, the company will work to develop the areas identified and discussed during the admissions process.

Definitions

The terms listed below have the following meanings: 

• “On-site” means a company admitted to, and residing on the premises of MCED.
• “Affiliate” means a company admitted to, but residing off the premises of MCED.
• “Graduate” means a company graduated from MCED.
• “Graduation” means the completion of the exit and graduation criteria outlined below by a company admitted to MCED so that the company is a successful, independent business. 

Company’s Responsibilities

Participation in the incubator program is strictly voluntary. MCED staff and volunteers function solely as advisors to client companies. Entrepreneurs are free to accept or reject the advice given.

In return, MCED requires client companies to: 

• Operate their business in a legal and ethical manner, including establishing necessary legal actions including company formation and protection of intellectual property.
• Establish an appropriate accounting and bookkeeping system and report financial data to MCED quarterly.
• Pay invoices promptly.
• Establish an Advisory Board to advise and assist in expanding and growing the business. The Advisory Board will review the company business plan, meet at least quarterly and review quarterly financial reports of the business.
• Meet with the MCED Director at a minimum monthly. 

Orientation (first three months in the program)

Perform a strategic diagnosis of the company to:

a. Jointly set short term objectives for company performance with staff and advisory board

b. Develop a written company action work plan

Semi-Annual Review

Two formal performance reviews of each client company are required each year. Staff and advisory board gauge the progress of a company against its objectives, and evaluate the quality and impact of the business assistance.

Termination of Participation in the Program

MCED reserves the right to rescind a company’s rights to participate in the program. For conduct deemed illegal or detrimental to the program as a whole, termination is effective immediately. For unsatisfactory performance or nonpayment of MCED invoices, a company will receive written notice of intent to terminate, including potential probationary periods and remediation. Decisions to terminate may be appealed to the MCED Board of Directors as the final arbitrator.

Exit and Graduation Criteria

MCED provides temporary assistance and space to new and developing technology based businesses. After an On-site or Affiliate company has become a successful independent business that no longer needs the assistance of MCED, the company will graduate from On-site or Affiliate to Graduate status. MCED has the right to modify the occupancy period and determine exit and graduation criteria for admitted companies. Companies admitted to the incubator must use their best efforts to meet these exit and graduation criteria.

I. Exit Criteria

MCED has the following rights to determine Successful and Unsuccessful Exit criteria for MCED companies. MCED has the right to:

1. Require On-site companies to vacate the premises and terminate all ties with MCED at any time. (Unsuccessful Exit)

2. Reserve final approval for Successful Exit from the premises of MCED and for change from On-site to Affiliate or Graduate status.

3. Periodically review On-site companies and modify occupancy period based on the following Successful Exit guidelines: 

• Company’s past compliance with terms of Service Agreement.
• Company’s future performance potential in terms of employment generation and general success.
• Company’s preparation and presentation of an operating plan and cash flow projection to chart future objectives and performance targets.
• Demand for space and the Company’s potential compared to competing demands and availability.
• Company’s need for and use of services provided by MCED.
• Company’s ability to stand on its own in a commercial facility.
• Company’s relationship with other businesses located in the incubator. 

II. Graduation Criteria

In addition to meeting the exit criteria as outlined above, companies admitted to MCED will use their best efforts to meet graduation criteria established by the company management and the MCED director. Whether an On-site company or an Affiliate company, MCED graduation criteria are outlined below. Periodically each company will be reviewed by the company management and the MCED director. The intent of this review is to analyze the company’s past performance and predict the company’s future needs and growth potential in terms of the following characteristics: 

• A balanced and experienced management team.
• Funding to carry company through 6-12 months of operations and financial stability as demonstrated vis-à-vis a significant outside investment or a long term investor commitment to the company.
• Significant product sales and backlog indicating a customer need.
• Need for and use of the services provided by MCED.
• A well thought out operating plan.