An incubator refers to a company which serves both as a venture capitalist and a consultant. It offers services including the formation of the new company, staffing, infrastructure build-up, software development support, marketing and public relations of the ventures apart from financing these start-ups. An internet incubator, however, will be involved in developing new firms engaged in internet-related projects.

BIV hopes to help entrepreneurs in conceiving and implementing internet ventures specialising in various areas such as B2C (business to consumer), B2B (business to business), internet-enabled technologies and application service providers.

The B2C portal may include e-tailing (electronic retailing) ventures while those as industrial auctioning and tendering on the Net will fall under B2B portal.Internet-enabled technologies refers to technologies that help in speeding up the processes on the Net and application service providers will include businesses renting out their software/servers for professional services.

The mission of the company, says Sankaran P Raghunathan, chairman of BIV, is to identify, nurture and spin out 100 Indian internet ventures within three years.

BIV, which went operational in September 1999, hopes to raise $100 million for internet incubator from private investors, venture capitalists and the capital market. The company has already received about $2.5 million from a private investor in Chennai. It hopes to go in for an initial public offer issue in the first quarter of 2001.

Outlining the operations of the incubator firm, Raghunathan said BIV will seed the start-up firms by not just investing an initial sum but also by picking up a 50 per cent stake in the company. After the incubation period of nine months, these ventures will be spun off as separate entities. At thispoint of time, the companies, which would have gone operational, will be an attractive proposition for venture capitalists and bigger firms for further investment, he claims.

The incubator set-up, much popular in the US, had taken a cue from the SBDC (small business development centres) model of the US universities, Raghunathan said. With 40 per cent of the US-based internet ventures being either co-founded or headed by Indians, the companies could have well been founded in India if only they were seed funded here, he said.

BIV has already identified three new projects for incubation and is looking for five more within the next six months, he added.