idea - 2 : incubator v2

this is not so much of a new idea. Just a thought on doing the seed funding and start up management better. What does a start up require? Money, concretization of idea, recruitment support and infrastructure at low cost.
Is there a way of creating an incubator (over and above the b-school or IIT ones) which is professionally run by a light administration and which helps start-ups build businesses.

This incubator can take either the form of the sourcing mechanism for one large VC or a general place run by third party which is not into funding businesses itself. Considering VC firms tend to prefer lean organizations, the latter seems more likely. The business model is to get money from the funded startups, get fees from them for using the infrastructure, taking equity into them for the support.

If such an incubator is stationed in an Andheri business centre with 5000 sq ft place it will cost Rs. 5 lakh per month to run. Then there is some admin staff which is paid Rs. 10 lakh a year between the 3-4 of them (secy-cum-receptionist, general office infra manager, office boys etc). On top of all this there is a team of 2-3 in-house principals who oversee the entire work. They are paid cash salaries of 20 lakh a year and given equity into the firms supported by them (or in main firm; whichever).

These principals are very well networked people. They bring in advisors on part time or favor basis from time to time for the start-ups. They themselves have consulting, VC background and hence add value in their own regard as well.

In house the place can support nearly 8-10 early start-ups (3-4 people teams). If the start-ups pay a fee of Rs. 50,000 a month, the rent can be recovered from this. In addition, they will pay in equity between 2 to 5% till the first round of funding. Assume 1 of 10 start-ups succeeds and is valued at 100 Cr in year 3, it will generate Rs. 2 - 5 Cr for the first year effort. On an annual basis, this can become a Rs. 5 Cr income enterprise from year 3 onwards. Subsequently, it can start advising and supporting more than 10 start-ups beyond its own base. With each principal, 10 more start ups can be handled. thus Each principal has a revenue potential of 2-5 Cr in steady state. Not bad for a professional of that qualification and experience.