| Topic Name: |
Incubator or Start up to VC |
| Message Name: |
not Incubator |
| Date Posted: |
01/07/2001 |
| In Reply To: |
I've been offered 2 jobs. One in the internet incubator arm of a large media company as a business modelling manager. The other as a business development manager at a start-up (Non-Tech Related, but information related.) I'm planning to do my MBA in two years after which I would really like to try Venture Capital.
Off the top of my head, I figure that the incubator job will provide me with more breadth of experience working with start-ups while the Start-up will give me more depth of experience working with a start-up.
I would appreciate any feedback on my situation.
Mike |
| Message: |
Unfortunately, though the Incubator path seems to be the best path to venture capital (since you would already be on the principal side of investments), VCs typically have little respect for Incubators. I make this generalization based on the following:
1) Incubators have yet to prove a track record (whereas if you had worked for an investment bank, at least you learned the tools and skills of a successful industry).
2) Incubators claim to investors, portfolio companies, and anyone else who will listen that their services are integral to the formation of a successful company. Some incubators suggest that they can build successful companies by circumventing the VCs while most just claim to be an important part of the chain. The dirty little secret of the industry is that the "services" that incubators offer are similar to those that any full-service VC would offer (Many VCs will provide or find space, people, services for their portfolio companies if the companies are incapable of it themselves).
3) The end result is that when VCs and incubators compete for deals, the VCs win and the incubators are left to be bottom feeders. That's why Iron Street Labs in New York invested in a company called "treatsforpets.com". If they had been spending only cash, would they have invested at all?
4) The Incubator industry (big boys such as idealab, Safeguard, and CMGi excepted), is populated largely by people who wanted jobs in private equity but couldn't get them. Incubators hire like operating companies while VCs hire (as we've been reading in this thread) rarely, selectively, and even enigmaticaly.
In sum, I would say that working for a blue-chip operating company or somewhere else in Private Equity finance would better serve your goal of ending up at a VC.
IMHO
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