Seeds For Future? Venture Conference Produces Few Deals Now

RALEIGH … So much for the Venture 2003 conference being a showcase for new deals … just one seed financing was announced during the two-day event. One can only hope potential investors were impressed with some of the two dozen presentations or that entrepreneurs made the right connections and that future deals were spawned during the conference.

The aforementioned seed deal involved Metabolon Pharmaceuticals, a biotech firm that moved to Research Triangle Park from Boston early this year and is headed by John Ryals, who founded Paradigm Genetics and was its chief executive before being ousted a year ago following a split with the company’s board of directors.

Aurora Funds, which just closed its fourth fund at $85 million and has been fairly active in recent months, put the early money into Metabolon and signed on to lead an initial round that could reach $6 million.

The Metabolon deal is the 26th venture funding for the year in the Carolinas and Georgia, totaling about $165 million. That compares with more than $300 million in 41 deals at this point a year ago.

Here is LTW’s exclusive list, ranked according to the size of the deal, for the Carolinas and Georgia:

Company; Sector; Amount (Round)

1. New South Communications, Greenville, S.C.; Telecommunications; $63.5 million (NA)

Investors: Kohlberg Kravis Roberts, M/C Ventures, Quadrangle Group, Vaxa Corporate Partners and Wachovia Partners

2. TransTech Pharma, High Point, N.C.; Pharmaceutical; $24 million (2nd)

Investors: MacAndrews & Forbes (lead), Cephaton and Novo Nordisk A/S

3. Prenova, Atlanta; IT services; $15.5 million (3rd)

Investors Frontenac (lead) Austin Ventures and River Cities Capital Funds

4. Targacept, Winston-Salem, N.C.; Biotech; $14 million (2nd)

Investors: Nomura International Healthcare Private Equity Group (lead), Bison Capital, Cogene Biotech Ventures, JAFCO, Oxford Bioscience Partners and Rock Castle Ventures

5. STI Knowledge, Atlanta; Software; $14 million (1st)

Investors: Satish Sanan (individual lead) BV-Cornerstone Ventures and Mellon Ventures

6. nuBridges, Atlanta; Software; $11 million (2nd)

Investors: hf Flagship Investments (lead), C&B Capital, GMT Capital, Noro-Moseley, Tycho and Marie Hawle Foundation and individuals

7. Arsenal Digital Solutions, Cary, N.C.; IT services; $10.5 million (4th)

Investors: Covestco, Southeast Interactive Technology Funds and Southern Cross Capital

8. Ephinay, Charlotte; Services; $10 million (1st)

Investors: Chrys Capital

9. StemCo Biomedical, Durham; Biotech; $9.8 million (2nd)

Investors: Aurora Funds (co-lead), Intersouth Partners (co-lead), BD Ventures, Tall Oaks Capital and Trelys Venture Partners

10. OrthoNeuro, Charlotte; Medical; $8.5 million (NA)

Investors: New Enterprise Associates

11. Venetica, Charlotte; Software; $7 million (1st)

Investors: Charles River Ventures and General Catalyst Partners

12. Brickstream, Atlanta; Software; $6.2 million (1st)

Investors: Columbia Capital and Mohr Davidow Ventures

13. Lancope, Atlanta; IT Services; $5 million (2nd)

Investors: HIG Ventures and GMG Capital Partners

13. Oculan, Raleigh; Networking; $5 million (4th)

Investors: Soros Equity Partners

15. USA Staffing, Greensboro; Services; $4 million (NA)

Investors: Argosy Investment Partners II and Venture Capital Partners

16. Q1 Labs, Atlanta; Software; $3.3 million (1st)

Investors: Business Development Bank of Canada and New Brunswick Investment Management

17. Flexlight, Atlanta; Networking; $3 million (2nd)

Investors: Coral Ventures and Concord Ventures

17. Quellan, Atlanta; Hardware; $3 million (2nd)

Investors: Cordova Intellimedia Ventures, Greenspring Ventures, ITU Ventures, National Semiconductor, University Financing Foundation and Yamacraw Seed Capital Fund III

19. Qcept Technologies, Atlanta; Hardware; $2.1 million (NA)

Investors: Pittco Capital Partners (lead), Atlanta Technology Ventures and Bergman & Associates

20. Relativity Technologies, Cary, N.C.; Software; $2 million (4th)

Investors: Noro-Moseley Partners and Wakefield Group

20. AvidXchange, Charlotte; Software; $2 million (2nd)

Investors: Charlotte Angel Partners, Piedmont Angel Network and and individuals

21. RSS Solutions, Greenville, N.C.; Software; $1.6 million (1st)

Investors: EdgeStone Capital Partners

22. LiveWire Logic, Morrisville, N.C.; Software; $1.5 million (3rd)

Investors: Gray Ventures and Research Triangle Ventures

23. Trinity Security, Charlotte; IT services; $1.5 million (1st)

Investors: Venture Capital Solutions