Taking care of business

A venture-capital firm invests in Hub students

by Loren King

YOUNG ENTREPRENEURS WANTED for this 21st-century office space with a 19th-century flair.

At the corner of comm and mass Aves in the Back Bay, the historic Oliver Ames Mansion is being outfitted for the 21st century. Amid rambling rooms, marble fireplaces, hand-painted friezes, and oak-beamed ceilings, three floors totaling 15,000 square feet are being turned into offices for fledgling techno-entrepreneurs fresh from area universities such as MIT and Harvard. The top two floors will be used as a residence for Stephen Roy, half of the brother-and-sister investment team behind this unusual corporate "incubator."

Roy and his sister, Ellen Roy, are banking on Boston's future as a high-tech mecca for the new millennium. The Newton natives and venture capitalists have the credentials to back up their vision: Stephen graduated from MIT's school of business in 1968, and Ellen graduated from Harvard Business School in 1987. Children of an entrepreneurial family that made its wealth in the Intercontinental Energy Corporation, an independent electric-power company, the Roy siblings have been investing in Internet companies and technology since the late '80s. In the '90s they joined with Softbank Corporation, which provided the fuel that launched Yahoo! and E*Trade, to create their current venture-capital group, I-Group Hotbank.

Stephen Roy bought the Ames mansion from Emerson College three years ago, and he was renovating it to use as his residence. But as the group scouted out locations for its entrepreneurial incubator and think tank, he soon realized that the ornate 1883 building, designed by Karl Fehmer, was the perfect spot for the offices. No industrial office park on Route 128 could duplicate the features of the Ames mansion, which the former governor of Massachusetts built to show off the fortune he'd made in the Union Pacific Railroad. The house was exactly what the Roys were seeking for their company: a building with historical (not to mention entrepreneurial) significance, in a downtown location close to the area colleges and universities from which they plan to recruit top students and recent graduates.

"The idea is to build a center where we have a business investment in people, and a meeting place where events happen," says Ellen Roy. "There [has been] no outlet for Internet start-ups until now. There's a lot of venture capital out there, but no incubators. And there are a lot of young entrepreneurs with no money and no business plan."

With the building undergoing final renovations, I-Group has already signed two tenants -- one a recent Harvard Business School grad, the other an Internet financier -- who will start work within a week or so. The center will house 10 to 15 companies at a time, or a total of about 100 people. Terms of the leases will vary depending on the tenants' needs, but the average tenancy is expected to be about a year; once the companies find capital and hatch business plans, they will be ready to strike out on their own. While the fledgling firms are at the Ames mansion, I-Group will provide administrative support, access to investors and information, strategic-management skills, and work space that includes such modern amenities as a gym and an espresso bar in a common area (complete with marble fireplace) where tenants can network and socialize. In return, I-Group gets a percentage ownership in each company.

"We want to create an atmosphere where good Internet ideas are developed," says Jennifer Chrisler, I-Group's director of operations. "This is an important step for Boston in thinking about how to keep high-tech entrepreneurs here instead of losing them to the Silicon Valley. We have unbelievable résumés here. We want to keep them long enough to be nurtured, to fall in love with Boston, and for the best and the brightest to stay here and fuel our own economy."