A handful of northern Nevada businesses
this week will vie for thin slices of the
diminishing venture capital pie.
Advanced Thermal Systems,
AnthenaOnline.com, Ascend Entertainment,
ipAuctions Inc. and modeMD all based in
Reno are making eight-minute presentations
to an audience of potential investors today
at Golden Capital Network's Silver and Gold
Venture Capital Conference in Lake Tahoe.
A total of 52 companies from seven
Western states will pay $595 each to pitch
their business plans to a roomful of venture
capitalists in hopes of raising much-needed
cash to fund their ventures.
"Our role is to identify and showcase
promising entrepreneurs for a network of
venture capitalists and angel investors," said
Jon Gregory, president and CEO of Golden
Capital Network in Chico, Calif.
Companies need all the exposure they
can get in the current capital climate.
Venture capital investments nationwide
plummeted last year to a third of what they
were the previous year. In 2000, total
investments were $93 billion; in 2001
they were $34 billion, according to
VentureOne in San Francisco.
The trend is continuing downward,
albeit not so dramatically. Total investments
were about $10.5 billion in the
first half of this year, according to
VentureOne.
Nevada has historically been near the
bottom of the list in terms of attracting
venture capital. In 1996, the state was
third from the bottom of the 50 states,
ahead of Delaware, Maine and New
Mexico, with $7.46 million in venture
capital raised. Last year, Nevada was
15th from the bottom with $45.2 million.
This year, companies in the state
have so far raised $10.8 million.
"There's a lot of room for improvement
but it is markedly improved from
before we were founded," said Robb
Smith, general partner of Nevada
Ventures LLC in Reno, one of only two
venture capital firms in the state that
was established in the late 1990s. "We're
confident there is going to be a good
turnout of technology companies at the
conference."
Nevada Ventures will be doing its best
to assist and promote locally-based businesses
at the conference, including providing
exhibit space there for the companies,
said Smith.
Those businesses will be trying to up
the ante at the three-day conference.
AthenaOnline.com, for one, is hoping to
raise about $1.5 million, said Jon Peters,
CEO. AnthenaOnline, a seven-year old
spin-off of the Institute for
Management Studies, provides educational
tools for businesses that include
Heineken's, New York Life and UBS
Warburg.
"We deliver short, targeted pieces of
knowledge," said Peters. "We take bestof-
breed faculty and break down their
knowledge on business to three- to fiveminute
answers."
Customers subscribe to the
AnthenaOnline.com service and receive
the material on CD-ROM. The company
also recently tested the service on
Microsoft Corp. Pocket PCs via a wireless
network.
"We've proved that the concept works
and we've proved that there is a need in
the marketplace," said Peters. Now, the
company, which until now has been
financed by a small group of individual
investors including former Intuit executive
Ranson Webster, needs additional
capital for marketing.
Peters is very cautiously optimistic
about attracting capital at this week's
conference. "It is the worst I've ever
seen," said Peters of the venture capital
market. "We haven't tried to raise capital
because nobody in the venture capital
world was interested in funding anything.
It has changed a little but not as
significantly as I'd hope."
"It is absolutely miserable out there,"
said Roy Graham, CEO and president
of modeMD, the University of Nevada
Reno spin-off that makes an electronic
medical records system that runs on
PDAs (see Oct. 7, page 1). "I've been in
high technology for 30 years and this is
the worst I've ever seen it. I've heard that
one in 200 companies gets funding."
modeMD is attending the conference
in preparation for a second round of
financing it hopes to close early next
year. "We're there to get on venture capitalists'
radar screen," said Graham.
Despite the dismal environment,
Graham said he's found raising small
amounts of capital more often is the best
strategy for new businesses.
ipAuctions is taking a page from the
modeMD playbook. The company is
presenting at the conference in an effort
to raise between $200,000 and
$300,000, according to Joseph Popolo,
president. ipAuctions was founded in
December to host online auctions of the
intellectual property of companies that
have filed for bankruptcy. "We provide a
venue under bankruptcy disposal procedures
so creditors can maximize their
return," said Popolo.
The company is hosting its first auction
- of the assets of Reno-based
Hardwarestreet.com - next week.
