THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Monday, February 20, 1995 TAG: 9502180621
SECTION: BUSINESS WEEKLY PAGE: 06 EDITION: FINAL
TYPE: Opinion
SOURCE: BY RAYMOND K. WHITE, SPECIAL TO BUSINESS WEEKLY
LENGTH: Medium: 78 lines
Eastern Virginia has never been known as an area where there was a great deal of activity in the venture capital marketplace.
Northern Virginia and metropolitan Richmond both lead Hampton Roads in venture capital activities.
However, Hampton Roads is quickly becoming a player in the market.
Currently, three groups are trying to establish a Small Business Investment Corporation (SBIC) in the area:
The Eastern Virginia SBIC, based in Virginia Beach, looks to be investing in companies by May.
David King, former president of Sovran Funding Corp., is ComVest SBIC's point man in Tidewater. ComVest is based in Richmond.
The fledgling Virginia Capital L.P. is also striving to become a licensed SBIC.
It's led by David Wilhelm, former vice president and investment officer of NationsBanc Capital Corp.
Several other groups play a role in helping companies to consumate funding deals for local businesses.
AT&T Capital Corp. is a certified non-bank lender for the SBA. Richmond-based Matrix Capital Markets Group Inc. has an office in Virginia Beach headed by Donald Beard. The Venture Group is also established.
Tying the venture capital marketplace together in the region has been a difficult task, said Dennis Ackerman, director of Old Dominion University's Entrepenurial Center.
Ackerman started a database of potential business investors in the region five years ago.
Currently, he has approximately 150 investors in his system. Ackerman calls the region's efforts in bringing together funding sources for potential business investments ``disorganized and chaotic.''
Many business financing deals are performed through an informal network of private investors. Efforts to match investors with fund-seekers is spearheaded by various attorneys and accountants in the region. The identity of these matchmakers generally are unknown in the wider business community .
According to Ackerman, there are between 300 and 500 private investors between Williamsburg and Virginia Beach willing to invest in local businesses. These wealthy individuals are called angels as opposed to straightforward venture capitalists.
Helping to match these investors with business owners are several dozen brokers, based in eastern Virginia, who make a living finding money for businesses.
William Holloran, executive director of the Small Business Development Center of Hampton Roads Inc., paints a different picture of the venture capital community.
He feels that venture capital funds within 150 miles of the region are happy to consider investment opportunities in area businesses.
This includes funds based in Richmond, Washington and Raleigh-Durham.
With the three potential new SBICs and other private investors, Hollaran feels there are adequate business funding sources willing to invest in area businesses.
He recently started the Hampton Roads Private Investor Network, a database which incorporates Ackerman's list with potential investors researched by his staff and area chambers of commerce.
The emergence of national and international investor funds and matchmaking services is starting to play a key role in the funding industry. Several dozen of these brokers have emerged over the past several years.
With a population of approximately 1.5 million in eastern Virginia, there are numerous emerging companies looking for funding sources.
The Hampton Roads alternative funding marketplace has grown from just a handful of participants several years ago to a viable industry.
However, regionally based efforts still trail organized activities in Richmond, Northern Virginia, and Raleigh-Durham. MEMO: Raymond White is president of Raymond White and Associates, a Virginia
Beach management consulting firm that specializes in new business
development. by CNB