BT Brightstar, the corporate incubation unit of British Telecommunications, is the latest incubator to change its business model as its portfolio companies struggle to find follow-on funding from external venture capitalists.

BT launched Brightstar in November 2000, in order to capitalise on its catalogue of patents that are not of immediate interest to its core businesses. Its aim was to incubate between 10 and 15 companies a year, work with them until they had a clear business plan and then bring in external venture capital firms to build the management team and invest cash.