Ron Palmeri, a longtime Silicon Valley executive, is among a growing group of professed company builders who are parlaying past successes - along with their own capital - into operating companies and venture funds that work on multiple companies at the same time.

"There's a group of us who are serial entrepreneurs who know a lot about building something and scaling it," said Mr. Palmeri, who previously worked with Halsey Minor, the founder of CNET, a technology news Web site, at Minor Ventures. Minor Ventures used this model to build companies like GrandCentral, now Google Voice, and OpenDNS, a software firm.

In 2010, Mr. Palmeri started his own operating company, MkII Ventures, with Allison Rhodes Messner, formerly of OpenDNS. The company is working on four ideas.

The concept - often referred to as parallel entrepreneurship - is not entirely new. Back in the dot-com days there was the holding company CMGI, which once had a market value of more than $40 billion before it faded.

What is new is the number of entrepreneurs and investors who are going this route rather than staking their fortunes on single follow-up acts.

"Venture doesn't allow us to explore, only to accept and deny," said Michael Jones of Science, a builder platform in Santa Monica, California. He and a longtime entrepreneur, Peter Pham, started Science in 2011 with $10 million in venture backing.

Most of these investors-cum-inventors are motivated by personal passion to create companies. Entrepreneurs often tap their own networks and wallets to finance their ideas.

"I don't have any hobbies," said Max Levchin, a co-founder and former chief technology officer of PayPal. "This

is what I do."

His first version of this model, MRL Ventures, helped start the mobile business-rating platform Yelp and created Slide, a personal-media sharing service that Google bought for a reported $182 million but has since shut down. His new project, called Hard, Valuable, Fun, or HVF, will focus on a few big ideas with longer time frames.

Company builders say they provide a missing link in the life cycle of start-ups and do so more effectively than incubators.

Hunter Walk, a former director of product management at Google, said, "What's often needed at the early stages isn't more capital in a vacuum, but people with operational experience who can give their full attention to these companies."

Once an idea gains momentum builders typically turn to venture capital firms for financing while gradually giving individual teams more autonomy. "It's like raising children," Mr. Palmeri said. "There's a point where they eventually need their own space."

This approach resembles product development at large companies, like Apple or Google, only on a smaller scale. "The cycle of entrepreneurship can be pretty slow, so why not work on several ideas at one time?" said John Borthwick, chief executive of Betaworks, which was founded in early 2008 and is based in New York. (The New York Times Company is an investor.)

Though some of the large venture capital firms have invested in ideas hatched by company builders, the concept has its skeptics.

"It's very difficult to manufacture innovation," said Andy Rachleff, a lecturer at the Stanford Graduate School of Business, former general partner at Benchmark Capital and chief executive of Wealthfront, an online financial advisory firm.

Proponents of parallel entrepreneurship argue that they improve their odds.

Venture partners can regard company builders as "a monstrous insurance policy," Mr. Jones said. "If something goes wrong with one of our portfolio companies, we can quickly dive back in and make things work."

The New York Times

(China Daily 06/09/2013 page10)