Incubator space way to keep emerging firms in the city

STARTING UP: Alan H. Litwin says the incubator space could attract life sciences, technology, renewable energy or medical device firms. / COURTESY KLR
STARTING UP: Alan H. Litwin says the incubator space could attract life sciences, technology, renewable energy or medical device firms. / COURTESY KLR

The largest accounting firm in Rhode Island, Kahn, Litwin, Renza & Co., has made connecting with the next generation of New England entrepreneurs part of its growth strategy. Longtime participants in the Rhode Island Business Plan competition, KLR is now launching an Emerging Business Center incubator space in its offices on North Main Street in Providence.
The idea of hosting shared office space for startups has become popular in Rhode Island recently, with at least four other operations, all with their own specialties, either open or planning to open within the year.
KLR Managing Director Alan Litwin discusses the Emerging Business Center.

PBN: What inspired you to open a business incubator in Providence?
LITWIN: We have been doing a lot of work with emerging businesses both in Providence and Boston, and working with them, we felt we needed to be where they are. Nine months ago we opened an office in the Cambridge Innovation Center in Kendal Square. It’s a six-story building with shared office space. … There are [more than] 1,000 companies in the CIC and everything is month to month with no long-term commitment. We had clients in there and wanted to be close to them and have the opportunity to find new clients there. … As we did some research, we saw there are some [similar] things in downtown Providence, but nothing even close to this. … Our goal is to provide service to help these companies grow and be successful. We want to provide space, and we have great space, but also accounting, tax, technology and recruiting expertise.

PBN: The most prominent incubator space in Providence right now is probably Founders League. Are you going to be similar to Founders League? LITWIN: We think we’ll be very complementary to them but we don’t think it will be exactly what they do. … Their target is to have a lot more companies – I think 40 or 50 companies. We are going to be much smaller and much more strategic. We are looking at 10 to 12 companies max. They are mostly shared work space and we are looking to provide much more than space.

PBN: What kind of companies are you looking for, any specific sectors?
LITWIN: It could be life sciences, technology, renewable energy, medical device, any of those four and not restricted to a particular field.

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PBN: What’s your pitch to startups?
LITWIN: The pitches will be coming from the applicants on why we should choose them. We think we could sell this out tomorrow if we wanted to, but our goal is to get the right mix of companies, and we will be very selective in who we take in. It has to be companies we are confident will be successful.

PBN: Please run through all of the benefits they’ll get.
LITWIN: Accounting, tax, which is very important even though these companies may be preprofitable, technology, recruiting – as they start to scale they have a desperate need for talent – and marketing; we will help them with their marketing plans.

PBN: How big is the shared space going to be and what kind of facilities does it have?
LITWIN: We have somewhere between 5,000 and 6,000 square feet. We have filled out the space with furniture. We have a conference room, full media center, Wi-Fi, kitchenette and copy machine.

PBN: When will the first companies be moving in? LITWIN: We have set up the space for use and are evaluating a couple of prospects that want to move in and will be entertaining applications. We’re not in a rush. If we don’t find the right company, we are not going to let them in right away. The real opportunity is that they are in the same building with their service providers and have ready access to help.

PBN: So in some you’ll take equity for rent?
LITWIN: Yes. We’ve taken equity in lieu of fees and will continue to do that.
We think this is a great economic-development driver for the city, a huge opportunity to have some of these companies stick around. What we have seen is that some of the companies that Betaspring has done a great job of bringing into the city have no reason to stay. Before, with the Innovation Investment Program, they were getting money from the city. Now they look at it and say we could go to the Founders League, but frankly we could go anywhere. We should go where we can get help, whether that is talent or resources.

PBN: KLR continues to grow – you had a merger earlier this year. What’s the broader outlook for KLR?
LITWIN: We have had extremely healthy growth over the last year. We merged with Fay Associates … and have had substantial growth. We have budgeted in 2013 to grow by about 30 percent and are tracking right there.

PBN: Any particular areas you are looking to expand in?
LITWIN: The emerging businesses are a big part of it. We do a lot of business with private-equity firms and venture-capital firms. We have a large hospitality niche, large nonprofit group, health care group and we are seeing growth in all those areas. •

INTERVIEW
Alan H. Litwin
Position: Managing director, Kahn, Litwin, Renza & Co. Ltd.
Background: A Providence native, Litwin studied accounting and started his career in the field with Peat, Marwick, Mitchell and Co. in 1980. Three years later, he co-founded KLR with Lawrence I. Kahn and has worked to grow KLR ever since.
Education: Bachelor’s in economics from Lafayette College, 1979; MBA with concentration in accounting from Rutgers University, 1980; master’s in science and taxation from Bryant College, 1987
First Job: delivery boy for drug store
Residence: Providence
Age: 55

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1 COMMENT

  1. What if the first few floor of the Superman building were put to this type of incubator use? Seems more useful than keeping the building vacant. The city or local businesses or colleges might subsidize it, and each incubator company would pay some some reduced fee to be in the building.