Interview Questions for Internet / Technology Analyst

Time: Approximately 30 minutes

Important: When answering, please try not to have later questions influence your answers to previous questions.

1.     What do you think of incubators in general? Do they provide value beyond what a top-tier, or non-top-tier VC provides? Can VCs and incubators work together?

2.     If you see or don't see value in general incubators, how about vertically specialized ones that have deeper domain expertise in a certain area? Would you be worried about cannibalization within the incubator?

3.     What about VCs and incubators? Are they the same, different, and can they work together?

4.     If you don't see value in current forms of incubators, is there an ideal form that you think might work in today’s market place?

5.     Have you ever covered a company that was incubated? What did you think of it? Do you think it had an advantage over one that might not have been? Do you feel it’s valuation was affected in any way?

6.     Assuming the incubator itself a separate entity (e.g. it can go public?), as opposed to a concept with services (e.g. an portfolio investment fund only), when do you think such an entity should IPO (e.g. after taking one or two incubated companies public? Would you be concerned about the incentive structure of building the incubated company to “last” or building to “flip”?

7.     In your view, what type of investor invests in publicly traded incubator stocks? Assuming equal transaction costs, would a large investor invest in a publicly traded incubator stock or are there benefits to invest privately, like an angel investor, or in a VC fund (assuming the VC fund would take their money), where there are preferred shares and liquidation rights for some downside protection?

8.     Say for instance that Darwinian Theory applies to capital deployment and that the smart entrepreneurs with great ideas find smart capital (e.g. a top-tier VC firm with a big rolodex – question: is this smart capital?). This then means by the process of elimination that the next-level down of ideas/entrepreneurs go to the incubators. Or, perhaps the market is big enough that the incubators will have some successes as well.

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