The Town of Chapel Hill, once a beacon for anti-business sentiment, is trying a novel approach to attract entrepreneurs. It is becoming an entrepreneur itself.

And like most entrepreneurs it will find starting is easy; surviving is the real challenge.

The town, with help from Orange County’s Economic Development fund, the Downtown Partnership, and UNC’s Kenan-Flagler Business School, is opening a manufacturing business downtown.

What will they build? New businesses.

The venture is called, appropriately, Launch, and sometime in the next month it will house 15 to 20 local start-up companies in a small building on Rosemary Street.

What does Chapel Hill know about building a business? Not much. So, this program smartly leverages the considerable talent and resources of Kenan-Flagler – one of the nation’s top entrepreneurial programs – in addition to a local network of successful entrepreneurs eager to help.

Business incubators have had mixed success over the years, often because they seek to profit directly from the firms they support either through rental income or ownership stakes. Ted Zoller, a professor at Kenan-Flagler and one of the drivers of Launch, describes this new model as a “Venture Lab.” It combines co-working space (first class facilities encouraging collaboration) with accelerator services – custom matched mentoring by proven successful entrepreneurs and cutting edge academics, business building seminars, as well as access to venture capital funding. Government and private contributions subsidize the cost of rent and services.

Launch has already proven a pent-up demand. Applications for the first wave of entrepreneurs oversubscribed available space by three times. An expert selection committee is vetting the prospects, and only the most promising will be accepted. Zoller expects the first class to be evenly split between start-ups coming from university students or faculty and outside entities.

Zoller calls Launch “economic development on steroids” with a single-minded goal: to “build lasting companies.” Given the level of talent, resources and discipline involved, it should have a better than average success rate.

However, Launch’s ability to create companies won’t by itself justify the taxpayer dollars supporting it. Government will only get a return on its investment if these newly birthed companies stay in Chapel Hill.

Jim Kitchen, a local businessman who will be Launch’s entrepreneur in residence, understands that well. “This doesn’t make sense if there’s nowhere for these ventures to go.” He expects the University Square redevelopment to provide much needed downtown office space to help sustain a vibrant entrepreneurial culture in our urban center.

But University Square will take years to complete, and is primarily dedicated to university use. Launch is a great first step, but the town needs to accelerate more re-development downtown. Otherwise, its Venture Lab investment may be squandered by exporting space-starved new companies to Durham or RTP.