Technology business incubation has come to Hong Kong, that much is clear. That it means different things to different people is also clear. In the past three weeks, many businesses have made it widely known that they are in the incubation business - AsiAlliance, Incubasia and iMerchants. This is in addition to the companies that were already making moves in the area, such as local tech venture-capital firm techpacific, the Hong Kong Industrial Technology Centre and Pacific Century CyberWorks. Though specifics vary - and in some cases are still shrouded in mystery - the basic concept is the same: the incubators help Internet or tech startups get off the ground in return for taking a cut in the company, either shares or fees, or both. Conceivably, a would-be entrepreneur can win the backing of an incubator on the strength of just one very good idea. The incubator could then help with everything, from shaping the business plan and building a management team, to introducing the new company to funders who will keep the venture alive until a profitable exit appears, either a buyout by a bigger party, or an initial public stock offering. In some cases, the incubator will provide housing for the young business and/or invest its own money in the businesses. A role model cited by some of these incubators is Garage.com, a profitable Silicon Valley company that has matched startups with more than US$60 million of venture capital financing this year alone. Garage.com runs 'boot camp' seminars which startups pay fees to attend, as well as offering Internet listings of startups which potential investors can view. Another is Massachusetts-based CMGI, widely admired for its success with its own brand of startup incubation. With the Hong Kong incubators, advice and guidance comes in a number of forms and not necessarily cheaply. Incubasia plans to provide housing and give seed funding of up to $500,000 per company, taking equity stakes of up to 30 per cent in return. AsiAlliance plans to provide management consulting, fee-based access to its Web information and fund-matching for a flat five per cent cut of the first $2.5 million raised. Meanwhile, techpacific provides space and in-house business services in return for stakes of between five and 100 per cent, depending on variables such as whether the business actually exists or is still just an idea on paper. Through separate fund-matching and investment banking services, techpacific also charges a fee for capital found through its network of angel investors. HKITC, in partnership with its property developer partners, take a combined 20 per cent equity stake and a percentage of money raised. Though it could not be reached for comment on details of its incubation plans that were due to be announced today, iMerchants up-to-now has focused on selling electronic commerce packages and consulting to existing companies. Pacific Century Cyberworks, which may partner CMGI in some capacity, has also not released details of its incubation scheme, though it is likely there will be room in its Cyberport project for a few investor companies. Some question why a Hong Kong-based technology startup would go to an incubator in the first place, given that commercial rents in fully wired buildings are now as low as HK$7 per square foot and there does not seem to be any shortage of venture capital investors in Hong Kong, of both the individual and fund varieties. After all, did not some of the most successful US-based Internet companies start on a shoestring, with little help from power-suited lawyers and investors? For one thing, said Robert Kenny, co-founder of Incubasia, some startups were just too small to attract the interest of venture capital funds, which usually did not look at deals involving less than US$1 million. But it was still possible to 'self-provide'. 'It is not impossible to do it bootstrap, maxing out credit cards, going to loan sharks or whatever, but this is increasingly not a bootstrap business. Even though others had the luxury of building slowly, that time has passed,' Mr Kenny said. Then there is the expertise that the incubators promise to deliver - technological, legal and accounting. Also, being part of a cluster of companies can be useful for sharing physical and human resources, some observers say. Regulars at seminars aimed at potential startups have heard cautionary tales on how important accountants and lawyers are, especially if companies think they may eventually want to list shares. Also important, say the incubators, is their ability to shape business plans, making the companies more attractive to potential funders. William Lo, head of consumer banking services at Citibank Hong Kong, said the crucial factor was whether the incubators had people who knew how to nurture startups and had done so successfully in the past. Both AsiAlliance and Incubasia, while looking to recruit staff, said they have plenty of expertise in-house or on retainer. AsiAlliance founders include former bond trader Charles O'Flaherty and software engineer Alex Viggio. Incubasia founders include Jonathan Cheng, a former Peregrine fund manager and an investor in Internet startups, and Mr Kenny, formerly an electronic commerce executive with Cable & Wireless HKT. Those with banking or finance backgrounds may have a head start when it comes to being able to tap into a network of potential investors. A former investment banker, Ilyas Khan of techpacific said his team of eight has raised more than US$20 million for about 12 Asian technology companies since starting operations in January. At last count, techpacific had five businesses nesting in-house and was making plans to move to bigger offices in order to accommodate more. Incubasia and AsiAlliance founders say they also have investors lined up. 'Right now there's more money than good investees,' said Mr Kenny of Incubasia. 'You can pick and choose and get investors who will make a difference. I've seen a good investor make a difference.' In Silicon Valley, weekend brunches where wealthy technophiles hear presentations by startup entrepreneurs and potential investees are common. Companies such as techpacific are trying to bring those meetings to Asia, on the Net if necessary.