Charles Hadley and Hal Broderson hold executive positions in each of the eight new companies their firm, Rock Hill Ventures in West Conshohocken, Pa., has helped start up; they build the management structure while the scientists work out the product design. "Part of the advantage is you don't have a lot of infrastructure baggage," Broderson says. "When problems happen, you can turn the burn rate on and off like a spigot." The "burn rate," or the amount of cash a company spends during the development stage, is something venture capitalists watch closely. The more business Hadley and Broderson take on, the less money the start-ups have to spend and the further Rock Hill's invested capital stretches. If a buyer offers a nice price for the business early on, no executive egos will get in the way of a deal.
Other venture firms are catching on to the idea, including two ...
