Don't you wish you had invested $106 million in Yahoo! when it went public? Softbank Venture Capital did, and the experience convinced the firm to stick with the Internet. Softbank Venture Capital is a subsidiary of Softbank Corp., a Tokyo-based technology firm that produces and distributes software and hardware and owns 70 percent of tech publisher Ziff-Davis. Founded in 1981 by Masayoshi Son, Softbank Corp. has become a leading provider of infrastructure services to the digital information industry, focusing on personal computer magazine publishing, event marketing, technology, distribution, and network services. In 1995, SBVC was founded to invest in the Internet's potential and the firm has had some big hits. In addition to SBVC's $106 million stake in content provider Yahoo!, the firm also boasts investments in all-stars such as E-Trade and Buy.com. The firm has grown to over $900 million in capital under management.

Investment strategy: big money, less help

SBVC invests exclusively in Internet companies, mostly in the early stages. The firm often muscles out other VC firms, offering two or three times the amount of funding other firms are willing to offer start-ups. This has led to some ruffled feathers in the VC business. One competitor complained to Upside, "The rest of us can't compete against this. What do we tell the entrepreneur? 'Yeah, we're better than they are. Come to us even though they're paying twice as much money.'" According to some industry critics, one downside of SBVC's generous investment is less guidance from the partners of SBVC. Whether this was true or not in the past, it seems to be a remedied situation, as executive managing director Gary Reishel sits on more than 15 boards. In addition, executives at other Softbank subsidiaries are often board members of SBVC investments. Portfolio companies also benefit from discounts on Softbank products and services. As further evidence of the company's ability to nurture entrepreneurs, SBVC launched an incubator, HotBank, in December 1999. HotBank, located in the same building as SBVC's headquarters in Mountain View, California, will incubate as many as 12 companies at once for six months. According to The Boston Globe, HotBank will offer incubated companies up to $2 million in exchange for 25 to 75 percent of the company. SBVC also has the right to provide more funding after the incubation period. SBVC will support these new enterprises with office space, furniture, computers and access to financial, accounting and legal experts. Most importantly, the incubated companies have access to the wisdom of SBVC partners. SBVC plans to franchise HotBank all over the country, and opened a Boston office of the incubator in February 2000.

Portfolio: a five-pointed star

SBVC divides its Internet investments into five categories: enabling technologies, e-commerce, content, business services, and consumer services. Enabling technologies are those that link up fundamental technologies. Portfolio companies include Abuzz, Andromedia, Art Technology Group, eShare Technologies, and VXtreme. On the e-commerce side, the company has invested in Buy.com, toysrus.com and E-Loan among others. In the content sector, Yahoo! is an investment that is certainly worth noting. Other high profile investments include GeoCities and TheStreet.com.

The firm's business services portfolio is comprised of companies providing services directly to Web companies; in this area, SBVC has invested in USWeb, Career Central, and Firefly Network, among others. Finally, consumer services companies include Pointcast, Asia Global Communications, and Freeloader.

Partners: an eclectic mix of MBA and MIT

Gary Rieschel, a Harvard MBA, is the firm's executive managing director. Formerly director of quality assurance at Intel and a member of the Cisco Systems board, Rieschel has been with SBVC since the beginning. The firm's five other managing directors have an interesting mix of business and technology experience. For example, Rex Golding, another Harvard MBA, has experience as a CFO (3DO Company and OnLive! Technologies) and sits on three boards. On the other side of the coin is Brad Feld. Feld holds BS and MS degrees from MIT and has founded four tech firms. He currently serves on over 20 boards, including Interliant, MessageMedia (both his babies) and Broad Daylight.