And Softbank doesn't plan to stop with Silicon Valley. Gary Reischel, Softbank Venture Capital's executive managing director, wants to help support a nationwide network of incubators that will be funded by others but carry the HotBank brand. A Boston affiliate is slated to open in November, and a total of six are expected by the end of the year. The venture firm's parent has an enviable track record in backing new technologies. The new incubators are attracting entrepreneurs from Silicon Valley, southern California, Atlanta and elsewhere and have already produced some notable hits.
Incubators are particularly useful now that Internet businesses are forming and changing so fast.
New enterprises need constant consultation with their investors, something that is much easier if venture partners have offices in the same building as the companies they fund. Another factor driving the new incubators is a desire by venture capitalists to build relationships with entrepreneurs early in the life cycles of their companies, says Mike Roberts, executive director of entrepreneurial studies at Harvard University's Graduate School of Business. One potential pitfall of incubators is that venture capitalists may not have the time to closely monitor these very early-stage companies, even if they are in the same location. Presumably these people were busy before they started the incubator. He says ideaLab's facilities were extremely helpful in launching his company, which operates a Web site that consolidates information about stocks from analysts, chat rooms and other sources.