Local companies pitching for pennies

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.