The start-up for start-ups is going public.

Garage.com

, which helps early-stage companies develop their businesses and attract financing in exchange for equity, is set to go public with the backing of

Goldman Sachs

,

Credit Suisse First Boston

and

Robertson Stephens

. The deal, which is in registration but not yet on the IPO calendar, is expected to raise an estimated $68 million.

The IPO has been highly anticipated, in part because of Garage.com's unusual business plan and its charismatic CEO Guy Kawasaki. But the road to success for Garage.com won't necessarily be smooth. Though it's built up a reputation for picking promising young companies, and its regular

Bootcamps for Start-ups

conferences have been largely successful, it faces the challenges of expanding without losing its boutique appeal.

What It Isn't

Some have lumped Garage.com in with Internet incubators

Internet Capital Group

(ICGE)

and

CMGI

(CMGI)

, but Garage.com isn't another Internet holding company.

Founded in 1997 by former

Apple Computer

(AAPL) - Get Report

evangelist Kawasaki, Garage.com acts as a placement agent for companies looking to raise between a half-million dollars and $5 million -- amounts generally too small for venture capital firms to spend time on. Garage.com trains preventure capital companies and matches them with angel investors, or individual investors, and venture capitalists. In exchange, it collects equity stakes and cash placement fees.

Garage is looking out for fledgling companies with scarcely more than a Power Point presentation and a business plan. Last year, it assisted 28 companies in raising some $90 million, and received an average of 4% of the companies' outstanding capital stock.

"These guys are what I would call the farm club for the venture capital world," says Michael Rolnick, general partner with venture capital firm

ComVentures

. "Garage.com takes companies that probably wouldn't find their way into the traditional VC world and works with them and coaches them a bit to dress them up so in the next round they will get financing from a significant venture capital firm. They've picked a bunch of companies and said 'I'll help you out,' but not with capital but with sweat equity." Companies that Garage.com has helped out include

DrDrew.com

,

Inforocket

and

Startups.com

.

The company is actually profitable -- surprising for a recently hatched dot-com -- reporting net income of $694,000 on $5.9 million in revenue for the year ended Dec. 31, 1999. Some $2.4 million of its revenue is from its Bootcamps for Start-ups, and another $2.5 million is from cash placement fees.

The Challenge

The venture capital world generally praises Garage.com for creating an outlet for companies that are too small to make it onto the radar screen of venture capitalists. But it has its detractors.

"The bottom line is I think it's a great idea, but it's a management challenge for them to scale and grow," says Hadar Pedhazur, founder of the

Verticality Investment Group

. "There's some sense of exclusivity today at Garage.com. But once they go public, they're never going to want to share that image. The public's going to want more and more revenue and keep on bringing more and more trainers, where the quality may suffer because it's not the same as having Guy Kawasaki standing up there."

But watchers of the company have no doubt that Kawasaki will be able to attract the personnel Garage.com needs to expand its popular Bootcamps. Garage.com already has opened offices in Israel and London, and ComVenture's Rolnick says Kawasaki will be able to continue to spread the Garage.com gospel. "He definitely knows how to evangelize," Rolnick says. "Once you get this thing set up in eight countries, there's no reason he couldn't visit those countries once or twice a year."

But scalable or not, Rolnick points to another downside of Garage.com's general ethic, one that rubs against the bull market frenzy that's led to the formation of more and more start-ups. "The negative side to this is that everybody wants to be a millionaire. Everyone wants to be an entrepreneur. We're developing a breed of people who really shouldn't be entrepreneurs and are motivated by the wrong things. Some of these people don't have an entrepreneurial bone in their body." Leave that to Garage.com to decide.