
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: THURSDAY, July 26, 1990                   TAG: 9007260283
SECTION: BUSINESS                    PAGE: A-11   EDITION: METRO 
SOURCE: GEORGE KEGLEY BUSINESS EDITOR
DATELINE:                                 LENGTH: Medium

VIRGINIA CAPITAL FOUND LACKING IN VA.

Virginia is losing new companies to other states because the state lacks sources of venture capital, according to a group of Virginia Tech officials trying to bring professors' inventions to the commercial marketplace.

"We found a great void in the early stages of companies growing out of the university," said Ray Smoot, Tech vice president for business affairs. "Virginia is a very inactive area for capital investment."

He and other university officials spoke Wednesday to a small group of Roanoke business leaders about programs to market new Tech-related inventions.

Smoot said several Tech officials had visited a university alumnus who had taken his company from Virginia to Maryland because he couldn't find the capital to expand here. Although the state has "an excellent community college system and three large research universities, it is not a part of the country where capital is readily accessible," he said.

Under Virginia Tech Intellectual Properties Inc., a 5-year-old company, about 220 inventions have been proposed and about 15 percent of them are generating revenue, said Justice McCormick, its business manager.

John Saunders, a partner in Jefferson Business Group of Roanoke, said that if one out of 10 investments in venture capital pays off, "you are successful."

The university company was created as a vehicle to market inventions of the Virginia Tech research faculty, a relatively new concept at major research centers, McCormick said.

The inventions often are byproducts of research and the university, as owner, shares the revenue with the inventor, said Gary Hooper, vice provost for research at Tech.

Virginia has less than 4 percent of the $2.5 billion of venture capital under management by Maryland, Pennsylvania, the District of Columbia, North Carolina and this state, according to Judy Corse of Vienna, a general partner in Venture America.

The states surrounding Virginia are becoming much more aggressive in raising capital, Saunders said. He said one Blacksburg company has had three tax-incentive offers to move to North Carolina and one to Massachusetts. The intellectual properties company is in the Virginia Tech Corporate Research Center, which has $15 million in assets and 510 employees.

by CNB