The new firm, Berkeley Ventures, specializes in technology-related start-ups in fields such as web applications, renewable energy and gaming, officials at the firm said.
Like other venture capital firms, Berkeley Ventures will mentor startup companies and provide funding in exchange for a stake in their ownership.
The firm offers brand-new start-ups $5,000 to $10,000 in "seed money" and free rent for the first three to six months in its 8,400 square-foot facility, said Julio Ramirez, director of business development at the firm.
Ramirez said that the company has an extensive network of Bay Area investors and emphasizes professional mentorship.
One of the firm's high-profile advisors is Jeff Braun, former CEO of Maxis, the company famous for creating the "Sims" gaming franchise.
"A lot of the benefits we provide are the advice, the mentorship and the strategic connections," Ramirez said. "A lot of companies just say, 'we need $500,000 and we'll make it big.' That's not what we do."
While established competitor firms�-such as the Mountain View-based Y Combinator-provide comparable services for three-month periods, Ramirez said Berkeley Ventures is aiming to distinguish itself with a new two-year support model.
"We don't just provide a summer program," he said. "We're here for people that want to run their business full-time. We cater to a more serious entrepreneur."
But Paul Graham, a founding partner at Y Combinator, said his company has been known to provide consultation to start-ups four years after they initially received funding.
"Everyone who starts a (Y Combinator) clone gets asked the same question: 'How are you different from Y Combinator?' It is for most an awkward question," he said in an e-mail. "Often they make up some kind of fake difference. That's what seems to be happening here."
Berkeley Ventures' first four clients are Illinois-based Power2Switch, creator of an online marketplace where consumers can choose from competing energy providers; Virtual Labs, which aims to use cloud computing to improve corporate research methods; FI InfoNet, an Internet application company that caters to community building in the financial sector; and WAPIS, which is conducting confidential research to reduce the cost of renewable energy.
Godwin Wong, a visiting Associate Professor of Entrepreneurship in the Haas School of Business, said that companies like Berkeley Ventures can play a vital role in young entrepreneurial development.
"I think that kind of model is a good starting point. For a young entrepreneur that's never done this before, this incubator would open them up to the possibilities that exist out there," he said.