Beginner's Luck

Desperate to seal the deal, he and Burde soon arranged a meeting and drove up to Massachusetts to plead their case to the firm's chief executive. Remembers Butterworth: "The guy told us, 'This deal will be done within a week. If it's not, then I'll bridge you $500,000 to tide you over.' I remember walking out of there and giving Burde a pinky high five."

But when the next week rolled around, the firm backed out of the deal. Butterworth was furious. He was convinced that the collapse of a deal with such an influential firm would doom any future deal that he might try to strike with smaller venture backers. So he swallowed his pride and called his entire team into a conference room to break the bad news: He was pulling the plug on the company. "It was the most emotional experience of my life," he says. "It was like breaking up with 20 girlfriends at once. I never, ever want to repeat that experience again."

Not that he would need to. Although he had poured plenty of his own money into Netcast, he still controlled two potentially lucrative patents that he had won while developing the company's broadcast technology. Meanwhile, his Internet stock-picking prowess, combined with a short but lucrative consulting stint and a TriBeCa apartment that had nearly tripled in value, helped him to rebuild the small fortune that he had amassed during his Lehman Brothers days. "I certainly had enough money and time to live the lifestyle that I wanted," he says of the year and a half spent "pulling arrows out of my back."

Splitting his time among rock climbing, dodging calls from recruiters, and serving on a growing handful of Internet-company boards of directors, he had even entertained the thought of bagging New York City altogether and moving to Colorado to climb and ski. Yet, as he watched others cash in on ideas that he'd once entertained, his longing to leave a mark on the Internet revolution began to gnaw at him -- as did the uncomfortable notion that he would miss out on the event of our times. "I wanted to be able to tell my future kids that I didn't just sit on the sidelines," he says, matter-of-factly comparing the rise of the Internet to the fall of the Bastille. "This is the biggest thing to happen in my lifetime, and I realized that I didn't want to read about it from some mountaintop in Colorado."

The only question was how to get himself back in the game. He knew from recent experience that neither sitting on boards of directors nor consulting would satisfy his yearning to have an impact. And although he had entertained plenty of job offers to run Internet startups, he says, "going into someone else's startup wasn't for me either. Being CEO is a very passionate thing, and I didn't want to assume someone else's passion." Meanwhile, in the wake of Netcast's demise, the very notion of turning his ideas into another company was deeply unnerving. "I wasn't mentally prepared to place all of my bets on one company again," he says. "If I pursued any one idea, then it would consume my life again, and the other 999 ideas would never get done. So I started asking myself, 'How do I avoid getting hitched to a company and yet still get the satisfaction of shaping its destiny?'"

Then, in June 1999, he met Albert Wenger at an industry conference, and the two began talking about the hurdles that they had faced, both as founders of and as consultants to various startups. "We realized that every company faced common problems, so we started brainstorming about how to solve all of them at once," recalls Butterworth. "That's when we came up with the idea for LC39."

The more they brainstormed the idea, the more Butterworth liked it. "This was what I really love to do," he says. "I love putting pen to paper and turning ideas into real companies. But instead of putting 100% of myself into one company, I can put a little bit into building a bunch of companies. And once a company is no longer a startup, we begin working on the next one."

The incubator concept was hardly revolutionary -- which was, in a way, an advantage because it helped LC39 avoid the fate that Netcast had succumbed to. "We're on the leading edge this time, not the bleeding edge," says Butterworth. "And it's a much more rewarding proposition."

Best of all, he still gets the satisfaction of starting a company from scratch, while spreading his financial risk and reducing his dependence on potentially fickle outside investors. "I'm much more in control of my own destiny this time," he says. "I'm back in the game. I've created my perfect job, and -- who knows -- if I play my cards right, I might still have something to tell my kids about."

Alex markels [alexm@email.com], a former Wall Street Journal staff writer, last wrote for Fast Company about Solectron Corp. [November 1999].