NetCatalyst Sees The Writing

NetCatalyst Sees The Writing

Excerpted from Redherring.com, Thursday, June 01, 2000 9:05 PM

NETCATALYST SEES THE WRITING, NAMES 5 TO ADVISORY BOARD

Netcatalyst saw the writing on the wall, says Riggs Eckelberry, the firm's managing director. The company's founders -- Ron Posner and Chris Karkenny -- had their own separate incubators before scrapping their plans to pursue Netcatalyst's "accelerator" model two months ago. "We're going through a consolidation phase," Mr. Eckelberry says of the current abundance of Web-based upstarts. "There are a lot of marginal companies out there and they know it, they want to get acquired."

That's where Netcatalyst comes in. The firm provides three types of services to stalled startups: advisory and investment, consisting of an active board role; a "strike team" of in-house CFOs, CTOs, and CEOs that advise on financing and business development; and mergers and acquisitions counselling. In return, Netcatalyst gets a 10 to 20 percent stake in each company. Netcatalyst also puts up $250,000 to $500,000 from its principals' pockets and those of a network of private and institutional investors that Mr. Posner has cultivated over the last 20 years.

The five appointments that Netcatalyst made to its advisory board yesterday are part of Mr. Posner's network: Santo Politi, former president of Blockbuster New Media; Derek Wyatt, co-founder of the British Parliament's All Party Parliamentary Internet Committee; Gerard Baz, a former executive for Microsoft Europe; Stephen Koffler, an investment banker; and Jennifer Happillon, director and founder of cFour Partners/ITP Worldwide. Each will receive a small stake in Netcatalyst and an advisory role on the board. But the key point is that Mr. Posner "doesn't want to leave them out in the cold," says Mr. Eckelberry. "He's taking his personal network of people...and bringing it to a corporate level."