It's a good thing there aren't any nameplates on managers' doors at Mercantec Inc.

Since February, when Divine Interventures Inc. bought 40 percent of Naperville-based Mercantec for $23.5 million, four new executives have been installed and at least as many have left.

Divine's team slashed Mercantec's marketing budget and pushed the firm to strengthen its ties with big Internet service providers that can help it sell its electronic-commerce software to small and midsize businesses.

"They are the most active venture capitalists I have ever worked with," says Tom Lewicki, Mercantec's former chief financial officer, who runs a consulting practice in Champaign.

Divine can't afford to be passive.

The year-old company is among the boldest of hundreds of incubators that sprang up around the U.S. during last year's Internet euphoria, when investors snapped up shares of companies with scant financial histories.

Now, with Internet stocks off more than 50 percent since April, Divine is trying to persuade investors that its business model will work, even in a market that is soured on risky start-ups.

That won't be easy.

Only a handful of the 53 companies in which Divine bought stakes are profitable, and two-thirds are expected to continue losing money next year.

Divine is cutting expenses and preparing to let some start-ups fail while pushing more promising ones as quickly as possible toward mergers, sales or public offerings--at higher valuations, it is hoped, than those at which Divine invested.

"We are very realistic in that some of [the companies] will survive and some of them won't," founder and chief executive Andrew "Flip" Filipowski told analysts last week. "It becomes clearer over time which we will focus on and which we won't."

There is little time to waste.

Divine raised a total of $338 million from public investors and big corporations last month--enough to meet its working capital and cash needs for at least 12 months.

But Divine needs to prove quickly that it can produce winning companies in order to build credibility and boost its stock price so that it can return to the market later for more money, people who follow the industry say.

"We believe there's some great companies [in Divine's portfolio]," says local venture capitalist George Garrick, one of Divine's 43 directors and former CEO of Internet marketer Flycast Communications Corp., now part of CMGI Inc.

"But until some of them start going public with multibillion valuations," Garrick adds, "we're not going to know."

So far, investors don't share Garrick's confidence. Divine's stock has trended down to the $7 area since its $9 per-share offering July 12.

That's barely higher than the $6 price (adjusted for a 6-to-1 reverse split at the IPO) paid last year by early private investors--including a high-profile board of Chicago CEOs who backed Filipowski's vision for building a powerful Internet consortium.

Employee option prices range from $4.50 to $13.50, split-adjusted, which means that recruits who were banking on a windfall when Divine went public are sorely disappointed.

Nonetheless, backers such as San Francisco-based brokerage Robertson Stephens, the lead underwriter for Divine's IPO, view the stock as a good long-term investment worth as much as $35 per share, based on the potential market value of Divine's holdings.

Filipowski's team has been working with Divine's companies to revamp their business plans in light of investors' demand that start-ups offer convincing timetables for becoming profitable.

For many firms, that is requiring a big adjustment from last year, when venture capitalists favored spending aggressively to gain advantage in the race to capture customers and grow sales.

"We're concentrating on plans that allow [companies] to break even in the shortest amount of time . . . even if it means sacrificing some on the growth," Filipowski told analysts.

Divine also is looking to combine complementary companies into bigger enterprises that can be profitable faster. One scenario calls for merging Divine's Internet services providers--firms offering Web design, strategy, public relations, real estate and other services--into a single company called Charisma.

The mood at Divine's wide-ranging companies, meanwhile, varies as widely as the companies' prospects.

At Web Design Group in Chicago--one of Divine's profitable companies--the staff has more than doubled, to 60, since January.

"I think everyone is cautious about the stock right now," says Charles Stevenson, chief operating officer, who started the company five years ago in an apartment. "We wish it had done better."

Others are bluntly pragmatic.

"We wanted a couple of things [from Divine]--some cash, to solidify our management team and to move from working with start-ups to mainstream clients," says Nate Weersing, founder and CEO of Westbound Consulting Inc., an integration services firm with programmers here and in India.

"Would it be great if Divine were the greatest thing since sliced bread? Yeah, but we got what we wanted. We made the [partnership] work."

At Mercantec, which reported a slim $1.5 million in sales last year, Divine's revamp left hard feelings.

Several former employees say the company needed better focus, but that they felt bowled over when Divine's recruits took charge.

"A lot of them didn't know a thing about software or the Internet," says a former employee. "They were a little heavy-handed."

Mercantec CEO Andy Parker disagrees. "It's not like [Divine] pushed people down our throats," he said. "The company was a little screwed up and we brought in some people . . . who could help fix it."

At Closerlook Inc., a growing digital strategy and design firm with 1999 sales of $7.4 million, investment bankers are starting to call on founder and CEO David Ormesher--a sign the company may be considered a promising IPO prospect, though Ormesher is in no hurry. Divine invested $17.5 million in February for a 43 percent stake.

Motorola Inc. joined Divine in an $18 million investment in Perceptual Robotics Inc., which offers software that allows Internet users to operate remote cameras. The 4-year-old firm recently moved to Chicago from Evanston with the help of Divine's majority-owned real estate services firm, Dotspot.

Unlike companies such as Mercantec, Perceptual Robotics is gearing up to spend more on marketing.

"We could become profitable relatively easily by cutting back the rate at which we're investing," says CEO Paul Cooper. "For us, it's really a question of how much we want to invest in being the leaders in our market. . . . We plan to invest to grow for at least another 18 months."

As for Divine's overall prospects, insiders say Filipowski's team is convinced the company's portfolio includes at least a few bright stars.

"That's certainly what investors are hoping for, those home-run hits," says Paul Bard, analyst at Renaissance Capital in Connecticut.

Bard's firm declined to invest in Divine's IPO, but he believes incubators as a class have big potential.

Says Bard: "All it takes is a small number of really strong investments in one of these companies' portfolios to really do well."