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CMA Final · Entrepreneurship and Startup · The Entrepreneurial Ecosystem

Which of the following is the primary role of a business incubator in an entrepreneurial ecosystem?

A business incubator's main role is to nurture early-stage ventures by offering shared workspace, mentoring, training and networking access. It increases survival chances of young startups, unlike investors seeking control, regulators fixing prices, or underwriters handling public issues.

  1. AProviding nurturing support such as workspace, mentoring and networking to early-stage venturesCorrect
  2. BPurchasing controlling stakes in listed companies for portfolio returns
  3. CRegulating the pricing of products sold by startups
  4. DUnderwriting the public issue of shares of large corporations

Explanation

Incubators help ideas and very young ventures develop through shared space, mentoring, training and access to networks, often for a fee or small equity. Buying controlling stakes, price regulation and underwriting are functions of other institutions.

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