Yet another incubator joined the fray Wednesday.
doesn't see itself as just another of the 300 incubators that opened their doors in the U.S. the past two years. And with $100 million in funding from its two big backers,
, the venture capital arm of
Softbank Venture Capital
, GameChange does have some obvious assets. For instance, Andersen can use its contacts to find markets and customers for the start-ups.
The successfully incubated companies will then be ripe for financing, with AC Ventures and Softbank Venture Capital well placed to fund them.
"Andersen Consulting can participate in the complete venture life cycle of a company, from the idea to incubation to venture financing," said Scott Killips, a GameChange board member and an AC Ventures general partner. "We can carve out a leadership role in the New Economy."
GameChange will focus on businesses with the "complex and messy problems in the enterprise space," said Rex Golding, another board member and a Softbank Venture Capital principal managing director. Specifically, it wants to help enterprises interact with either their customers or suppliers via the Internet.
The incubator -- which offers money and services to companies at the risky start-up stage -- set up its first office in Palo Alto, Calif., and plans to build a global network of 10 centers around the world. GameChange intends to house 10 to 20 start-ups a year in each office, providing each of them with $2 million in seed funding, as well as services including recruiting, marketing, public relations, Web design, accounting and legal advice. The incubation time will be six months, as opposed to the industry average of nine months.
The global strategy isn't a new one. "It is much more common now to see management opening more locations worldwide," says JoAnn Rollins, director of membership for the
National Business Incubator Association
. "The reverse is true, too, with international incubators opening offices in the U.S."
Par Arvidsson, a managing director of GameChange Palo Alto, says GameChange is prepared for the inevitable dilution of its stakes in start-up companies after subsequent rounds of financing. "We will get involved with seed investing and then help the company get the next round of financing, and then we're done," he explained. It's anticipated that the $100 million will last for two years.
The new entrant to the incubation stakes isn't fazing the existing players either. "It continues to validate the space, that we are providing some powerful and very real value to the economy," says Jed Freifeld, a partner at 1-year-old
Iron Street Labs
, which is incubating four companies.
That validation is important, as incubators have received a good deal of flak of late, with many venture capitalists characterizing them only as providers of real estate and technical support in return for disproportionately large stakes in the start-up companies. Others are dismissive of entrepreneurs who use incubators. "As time-consuming and attention-draining as
administrative matters are, it's in fact good for an entrepreneur to go through it," said one. "An incubator may be sheltering entrepreneurial teams that may not make it."