I originally started my angel fund as an incubator (The Hit Forge). I quickly moved away because of Adverse Selection - the best entrepreneurs are insanely committed to themselves and their ideas, and rationally or irrationally, don't want to diversify. Since then, I've invested in a lot of companies, including Twitter and Disqus and Heyzap, and am glad that I did so. The Incubator model works as a "search" model (MRL Ventures, Obvious Labs, Ooga) where the Incubator "finds" a company that the principals join, but not as an "investment" model where the incubator survives and keeps spinning out companies. This is true because you can't create or replace entrepreneurs - you can only discover them or be them, but you can't create them.

The other problem with this proposal is that the Internet is extremely competitive. You can't do anything great part-time over the long term. A funded team working full-time has a huge advantage on you.

Of course, giving up control sucks. "Valuation is temporary, control is forever." And a business controlled by VCs too early can't innovate easily. So, either raise money from angels, or learn how to negotiate with Venture capitalists. Check out Nivi and my writings (sorry, shameless plug) at http://www.venturehacks.com.

If you do have a good product with traction and are out raising VC money, ping me and I'd be happy to help you keep control (free!)

This sounds like you've read the 4 hour work week and then went to an MLM recruitment meeting.=D

This not meant to be derogatory in any way, I do feel that you've put much thought into this. That is just my impression of the concept.

I think in theory, this is great. However it seems to me like rather than one person starting one business, you have "a team" starting multiple businesses on top of managing their partnerships. I'm all for collaboration, but it seems to me like more work is being added, then taken out.

This would work if you can find the people to make it work, consulting isn't really a "new" route to starting a startup and neither is using consulting income to support it instead of outside money.

The real question is how do you find these "entrepreneurial" people and convince them to join together with you for lower cash and higher risk than they would have if they were working by themselves

I like your creative approach. My biggest concern is that any business you'd start would probably be service business. I suspect what you really want is a product business. You'd have to find a way to convert your service business into a product business to scale. Good luck. That part won't be easy.

Sounds sorta like obvious corp, except they didn't need to consult due to being comfortable already. Get smart people together, build some cashflows, and work on cool side ideas. See what sticks and what doesn't.

Also reminds me of Virgance.

midVentures are a bunch of University of Chicago and Northwestern alums who have joined together to do almost exactly what you describe: http://midventures.com/

I'm currently working independently as a consultant, but I think it could be neat to band together with other freelancers. Getting projects and establishing a "brand" would be easier with more people and more project volume, and we could match up projects to team-members according to their availability and skillset.

I also don't think it needs to be tied to bootstrapping a startup.

it seems that it ends up being a lot about finding the right combination of consultants. i already do the 50/50 split between my consulting and work on my vision project. and have been actively looking out for the right kinds of collaborations. be nice if there was a web service that spoke directly to this kind of linking "the 50/50 club" .. or maybe there is?