Brightspark Incubator Hopes to Hatch Internet Firms
By Susan Taylor
TORONTO (Reuters) - A trio of Canadian high-tech alumni will launch Brightspark Inc. on
Friday, an Internet ''incubator'' aimed at hatching high-risk, but high-reward online
businesses.
The idea of nurturing fledgling firms isn't new. What's unique about Toronto-based
Brightspark, said co-founder Mark Skapinker, is the firm's combination of equity and
experience.
Skapinker is best known for co-founding fax software developer Delrina Corp., sold for
$415 million in 1995 to Symantec Corp. (NasdaqNM:SYMC - news)
Partner Tony Davis, who developed WinFax software, has also launched a string of firms,
most recently co-founding Delano Technology Corp. which develops Internet e-mail
programs.
Brightspark's third partner, Richard Nathan, specialized his legal practice with technology
firms and advised securities regulators and financial institutions on using the Internet.
Incubators typically invest in ''two-man-and-a-plan'' firms, which are too small for venture
capitalists, but in desperate need of money and management support. The start ups receive
everything from office space to funding in exchange for a cut of their profits.
''The marketplace is growing very quickly. You can't afford to get it wrong the first time and
you have to do this very fast,'' said Skapinker.
''If you've thought of a good idea -- if it's a good idea -- 20 other people have thought of
that same idea. So the only way you're going to win is if you implement really well and really
fast from the first day.''
Brightspark, which has set a six-month target for firms to have a product move out the door,
is already supporting one start up which should be in business by February.
The firm's founders, who have put up C$5 million for first-rounding financing with a
C$400,000 cap per company, plans to hold a 50 percent stake in the young firms.
Brightspark (http://www.bspark.com) is also at work securing a C$60 million pool of funds
from venture capital partners to invest in later financing rounds.
''We'll partner with whoever we need to, to make sure that we're successful,'' Skapinker
said. Brightspark has struck relationships with Mosaic Venture Partners and Ernst & Young,
for example.
To be successful, Brightspark needs to hit 3 winners out of every nine firms it supports.
The concept of corporate foster parents for Internet firms, known for their blistering speed
to market, was pioneered by Pasadena, Ca.-based Idealab! Inc. in 1996. It has spawned
such recent successes as eToys Inc. (NasdaqNM:ETYS - news) and PayMyBills.com.
The incubator initiative has since rippled through the U.S. market, though Canadian offerings
have been substantially more modest.
It mirrors the patchy population of successful on-line Canadian firms that include E+Trade
Canada, Bid.Com International Inc. (Toronto:BII.TO - news) and retailers such as
Chapters Online Inc. (Toronto:COL.TO - news) and Indigo Books & Music.
Toronto firms creating Internet start ups include Exclamation Inc., EcomPark and Mosaic
Venture Partners Inc., while Vancouver, B.C. is home to IdeaPark Inc.
Brightspark presently has just nine staff in its massive downtown office, which can easily
become home to a dozen start-ups. It plans to expand to 20 or 30 people -- specialists in
such disciplines such as finances or product development -- who can be loaned to the start
ups until they are ready to flex their wings in cyberspace.
''As opposed to many people who are cynically starting to believe that the Internet is
beginning to reach its climax, I think it's just starting,'' said Skapinker.
|
