PALO ALTO, Calif. – Backed by corporate and venture capital firms, CenCom V Sourcing Inc. will operate a new incubator for high-technology companies that combine telecommunications, electronic media and computer networking. Larry Schwerin, an executive with 20 years experience at Lucent Technologies Inc., was tapped as the president of the firm, which began operations in April.
“I was drawn by the partnership that had been formulated … because when you put those parties together they have a look at the current world of telecom,” Mr. Schwerin said. “From my standpoint this is a unique opportunity to do real-time experimentation.”
The backers of the new effort include Matsushita Electric Corp. of America, Bell Canada, The Centennial Funds, Vanguard Venture Partners, Paul Allen’s Vulcan Ventures and North River Ventures.
Early-stage companies will pass through several stages in the CenCom process. First, a candidate must prove its technology fills a “critical-enabling interest,” which Mr. Schwerin defined as a technology that fills a particular need within the sector. Second, CenCom will present the company to the backers as an investment candidate. Mr. Schwerin said the firms are not obligated to invest in companies that are presented.
Lastly, the company, after receiving seed capital from the backers, will be loaded into the incubator where the combined experiences of the backers will be brought to bear on the development of the company. In this process, Mr. Schwerin may handle some day-to-day management while additions to the company’s management-level staff are recruited.
“The beauty of this arrangement is that we look toward long-term commitments,” said Ghia Griarte, an associate at Centennial Funds. “The syndicate will also look outside to other partners that will help the company grow.”