Although former Senator Bob Dole packed the auditorium for his keynote speech at Venture 2004 at the Friday Center on Wednesday, the real action, as usual, went on in the main hall, corridors, exhibition and break away rooms.

The slightly over 800 attendees, including 275 investors, spent a good part of two-days in animated, lively discussions about deals, financing, partnerships, and products.

Again this year, the increasing strength in biotech was evident in the number of biotech startups making formal and informal presentations to investors, the number of biotech investors, and the top rank Biotechnology Center executives who attended.

Thirteen of the 27 presenting companies were biotech startups. Leslie Alexandre, president, Ken Tindall, a vice president, and other Biotech Center representatives worked the event.

VC ‘misconceptions’

One of the more popular events on the program was a morning panel, which included four seasoned equity investors discussing “myths” in the venture capital industry. Like Sen. Dole, the panel had a standing room only crowd.

James Mason, director of Parish Capital Advisors; Rebecca Connolly, managing director, Fairview Capital Partners; Tom Gladden, principal, Adams Street Partners; and Kevin Nee, managing director of Quellos Group, dispelled what they see as misconceptions about venture investing.

They said the myths include the idea that the best technology always wins.

“It’s been my experience,” Connolly said, “that when you have a terrific technology out of a research university, that’s not the technology that wins its space.”

She advised, “Look for venture capital funds that stack the deck in favor of their companies. If you don’t know someone at Johnson & Johnson, say, you can’t get in the door.” The other side of the coin, she noted, is that venture capitalists have to pick deals, but “then they have to work them afterward.”

Mason summed up the discussion saying, “Markets matter as much, if not more than your technology.”

The panel also said “We’re back to old fashioned VC” is a myth.

“Everyone does things differently,” said Mason, “But people still do drive-by due diligence when a deal gets too hot and some are paying high valuations for late stage biotech companies.”

Connolly noted that venture investing “used to be a cottage industry,” but that now its glamorous and many more people want to do it.” The result she said, “Is that it’s much harder to be a venture capitalist today,” because of the competition, which results in “some company sectors remaining overheated.”

Biotech again came up and the panel noted that life sciences companies turned out to be the best investments many venture capitalists made during the boom years.

Outside the panel, Leslie Alexandre commented, “It could be like that for many more years. We’re all getting older.”


Michael R. Slawson, a partner with Atlanta-based Alliance Technology Ventures, which has $250 million under management in three funds, told Local Tech Wire, “I’ve been coming to this event for years.”

Alliance led the Series A round for presenter Ziptronix, a semi-conductor startup. Slawson said he also thought Nitronex, another RTP-based semi-conductor technology startup, and Xintec, which makes carbon nanotubes and other devices, intriguing. “You can see where our interest is,” he said.

Alliance, he pointed out, was also an early investor in Greensboro-based public company RF Micro, which makes radio frequency integrated circuits.

Slawson, like other investors both this year and last, commented on the increasing presence of biotech presenting companies and investors at the conference.

Heard in the halls

David Kaminski, chief executive officer of Triangle-startup Centuro Software, which is developing products in the hot areas anti-spam and Web security, hopes to close a private equity investment next week.

Kaminski told LTW Centuro will looking to hire a marketing person, fulltime sales person and IT help in about three weeks. The company is seeking $500,000 in funding.

John Ryals, CEO of Metabalon, which presented at the event, said he expects the company to be cashflow positive in about ten months.

Startups at work

Polyglot Systems Inc., which enjoyed some buzz during both days, said numerous investors and potential partners stopped by its exhibition booth to discuss opportunities. “We’re having a good conference,” a Polyglot executive said. The company will be featured in an NBC 17 news show featuring its translation device in use at Duke.

Eric Dobson, a founder of Navigational Sciences Inc. (NSI), which tracks shipping containers that can get lost in ports and on ships, said the five-person company plans to locate its data center in Asheville.

The company will employ from three to 15 people there in two years. Dobson said companies at the conference who have to ship hazardous materials and need to know where they are at all times expressed interest in NSI’s tracking system. Dobson said NSI recently received a Small Business Innovative Research Grant from Homeland Security department’s Advanced Research Agency.

Cary Startup Inlet Technologies founded only a year ago, plans to launch its first product in July. Inlet makes a hardware and software product that helps broadcasters shift from standard to high definition more easily. John Bishop, vice president of business development for Inlet, said the eight-person company is working on an $800,000 Series A round from private investors and is half way there.

Atlanta-based Vision Fuel Services Inc., which helps investors do preliminary due diligence or helps startups prepare for due diligence investigation by investors, has opened a two-person Cary office staffed by Brad Lienhart and Samir Hakooz. Kyle Philipp, president of Vision Fuel said the firm plans to expand into South Carolina, Northern Virginia, and Tennessee as well.