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Wednesday, April 10, 2002

By Donald I. Hammonds, Post-Gazette Staff Writer

Many Pittsburgh entrepreneurs will tell you that getting the money to fund their businesses is no easy task these days.

In spite of a recent string of good news, the economy is still struggling. And with the recent crash of so many promising dot.coms and start-ups still fresh, it's no wonder that people with the money to fund new ventures have gone queasy at the thought of parting with their capital.

But the Three Rivers Venture Fair, which got under way yesterday at Heinz Field, hopes to unclog the monetary pipeline by matching entrepreneurs and their start-ups with investors and their pocketbooks.

Top investment bankers, venture capitalists and angel investors from throughout the Northeast will size up local companies, and fair officials hope that most, if not all, of the nascent businesses eventually will get the investment capital they need.

Investors from New York City; Philadelphia; Boston; Baltimore; Washington, D.C.; Columbus, Ohio; Cleveland and northern West Virginia will hear 31 local companies pitch their business plans. The 31, whittled down from about 90 applicants by a local panel, include 10 software companies, seven hardware firms and 14 working in the life sciences field. Companies not making presentations will be hosting exhibits at the event.

The fair also will include panel discussions with experts in the life sciences and information technology industries who will review the investment climate, pinpoint the hottest areas and discuss what they are looking for when considering investment opportunities.

Along with helping start-ups, the fair will promote Pittsburgh as a terrific region in which to work, invest and live. It's particularly hoped that those unfamiliar with the region's investment potential will be attracted by what they hear and see.

Not that Pittsburgh's doing badly when it comes to drawing investment capital. In fact, momentum for investing here is quite strong.

For instance, in 1996, only $19 million in venture capital was invested in this region's technology companies, vs. $1.1 billion invested in just the last 24 months, according to Gary Glausser, a partner at investment firm Birchmere Ventures and the fair's steering committee chairman.

Why is Pittsburgh on the upswing? Credit some fast-growing stars in the technological firmament, such as Lycos, which has since moved on to Massachusetts; FreeMarkets; and others. But just as important, the region has much to offer in work force qualities and other factors.

"One of the things that has been very attractive to us is the excellent labor pool we have been able to draw from here, and we will be sure to mention that in our presentation. It's a very good place to build a business, with nice availability of management talent, infrastructure and facilities," said Brian Ahlborn, vice president of Axicon Technologies.

To help get the message across, Mayor Tom Murphy and Gov. Mark Schweiker will address the group today. Some 30 venture capitalists also will be taken to tonight's Pirates game against the Reds, Glausser said.

Axicon, the Pittsburgh-based maker of mechanical power transmission applications and drive- train systems including those being used in the ballyhooed Segway human transporter, is one of the companies making presentations at the fair.

"We're a little bit less typical than the other companies which will be making presentations," Ahlborn said. "We're in a business that is experiencing rapid growth, and there is a chance that we may want to expand very quickly. The venture capital fair is a good way for doing that."

To entice investors, he added, "We'll be discussing aggressive growth plans, ways we would like to seize growth opportunities and how we will be doing that."

Interestingly, the kind of relationship that is worked out between the investor and the venture capitalist -- and the speed with which they get a response from the investor -- depends upon the nature of the product or technology and demand for it.

Some companies, as a result, may have a number of investors courting them and will be more concerned about whether that particular investor is a "good fit" for them. Others may be happy to get just one bite from an investor.

But a good many likely will embark on relationships that will be more like courtships, with both sides getting to know one another, massaging their partnership over a period of months.

"For most young companies getting started, this fair represents an invaluable opportunity," Ahlborn said.