AC Ventures and SOFTBANK Venture Capital Announce GameChange
Written By: R. Krause
Published On: October 26 2000
AC Ventures and SOFTBANK Venture Capital Announce GameChange
GameChange calls itself the first next generation business incubator,
able to provide market, money, brains and bodies. With only one of the
planned incubators in operation, it remains to be seen if the rollout
and execution will be the success they hope for in the current market
claim to uniqueness as a seed capital and incubator company is in knowing
how to effectively take an idea from presentation slides to an operating
company. AC Ventures, the venture capital unit of Andersen Consulting,
and SOFTBANK Venture Capital believe that startups need five strengths
to survive; somewhat in order of importance they are:
the companies had a hole in their venture support sides in regard to high-risk
initial startups. By combining their money, talents and assets, and by
opening their business portfolios to new startups, they have formed GameChange,
an incubator with potentially ready-made markets for the right entrepreneurial
practices what it calls "customer-driven incubation," involving potential
customers very early in a start-up's life. According to Paul Walker, who
is with AC Ventures and is the interim head of corporate development for
GameChange, the difference is that GameChange prefers to "start with customer
problems and customers rather than end with customers [our] ability to
involve customers very, very early on in the development of a company
is a tremendous advantage. Finding the first customers is often the most
difficult task of all We think we can break that one."
These potential customers are drawn from the extensive portfolio of companies
in the AC Ventures / Andersen Consulting, and SOFTBANK network. GameChange
will be a global network of seed round venture capital and business-creation
centers that will focus on high-growth, enterprise-centric market segments.
Together, the firms have committed $100 million to building GameChange's
$100 million will enable GameChange to provide the physical offices, equipment,
tools, and infrastructure to take a company from an idea to actually supplying
customers. The centers will be located in entrepreneurial hot spots around
the world, and may or may not be close to AC and SOFTBANK offices. The
first center in Palo Alto, California is already up and running. Both
SOFTBANK Venture Capital and AC Ventures will be contributing equally
to making this happen. They anticipate that GameChange will reduce the
time a company spends in the incubator stage from nine months to six months.
the value-added services GameChange will provide through internal capabilities
are alliances are recruiting, marketing, public relations, web design,
prototype development, finance, and accounting. Most important, the GameChange
business creation centers will employ a unique methodology that leverages
Andersen Consulting's and SOFTBANK Venture Capital's proven processes
and tools. These methods have been successfully employed in SOFTBANK's
Hotbank incubators, as well as through Andersen Consulting's work with
more than 350 start-ups.
element of this approach involves tapping into the insights and ideas
of professionals with experience in such diverse areas as venture capital
investing, technology development and implementation, entrepreneurial
business creation, and the design of strategic industry solutions. As
a result, GameChange's portfolio companies will be better able to build
revenue-generating start-ups that become eventual market leaders.
L. Wilson, managing general partner of AC Ventures stated, "There's been
a lot of activity in the incubator space, but Andersen Consulting and
SOFTBANK bring something unique to entrepreneurs. Collectively, we represent
an unmatched global network of brand-name clients and portfolio companies.
As a result, entrepreneurs working with GameChange will benefit from access
to and input from a broad array of potential customers, many of whom are
searching for just the sort of innovative technology solutions and new
business ideas GameChange intends to incubate."
Rieschel, executive managing directory of SOFTBANK added, "Our combined
knowledge, business savvy and experience provide a quicker route to markets,
profits and success. GameChange is unlike any other incubator. We are
excited about its potential to 'change the game' by quickly turning good
business ideas into great companies. GameChange will provide the resources,
talent and connections that will dramatically boost entrepreneurs' chances
for enduring success."
This announcement is important for entrepreneurs as it provides a potential
beeline to the resources of Andersen Consulting and SOFTBANK, without
having to deal with two large-scale organizations on their own, and for
Andersen and SOFTBANK, it is an added sales channel for their services.
For the global market, it is another incubator, but one that potentially
enables the incubating company the chance to prove itself and what it
can deliver. For entrepreneurs looking for seed capital and support, GameChange
offers both capital and access to a large network of potential customers.
fills a gap in Andersen Consulting's movement into the world of entrepreneurs.
AC Ventures is more of(though not exclusively) an accelerator company,
usually providing second round financing - and sometimes first round financing
- and support for established companies with money to pay the bills.
Venture Capital, which claims a track record of bringing companies "from
napkin-drawings to global leadership," will contribute expertise to support
the financial viability aspects of startups, while GameChange personnel
provide the budding company with an infrastructure, management expertise
and resources to get started. Andersen Consulting brings strategic technical
expertise to overcome the technology and operational hurdles new companies
have to clear.
all this expertise available, GameChange will be able to thoroughly vet
business plans and thus populate their incubator with a group of companies
that quickly move from startup to success. Success for GameChange companies
will likely be measured by their ability to move from an incubator to
an accelerator. This is not a small accomplishment.
If you are an experienced entrepreneur with an idea it is certainly worthwhile
to look at what GameChange has to offer. The GameChange business-creation
centers will focus on high-growth, enterprise-centric market segments,
including supply chain management, customer relationship management, financial
management, human resource management, e-commerce management and product
development. This will include e-businesses, software makers, ASPs, and
prepared to pay for the help in equity - as with many VC's, you can expect
35%-40% of the equity stake to be taken by the VC, and this amount can
depend on their perception of the risk/opportunity characteristics of
the proposed enterprise.
This article has been modified from its original form since the original