Eleven years ago, four-year-old local computer networking equipment maker Fore Systems Inc. put Pittsburgh on the national map, exploding out of the gate with an initial public offering that made instant millionaires out of its founders and was one of the largest in the country in 1994.

Stacy Innerst, Post-Gazette Click illustration for larger version.

Some five years later, another four-year-old tech start-up, the online auction firm FreeMarkets Inc., did Fore one better -- in its first day of trading after making its debut as a public company, its shares soared nearly 500 percent in price, to $283 from an initial $48, making the company worth nearly $10 billion, about $1 billion ahead of industrial giant USX Marathon Group and just behind PPG Industries.

Of course, time and the bursting of the Internet bubble has done much to refashion regional memories of those heady days. Fore ultimately was sold to British-based Marconi and is a shadow of its former self, its Marshall-based operations having undergone a series of steep cuts. While its share price plunged to earth in the post-dot-com era, FreeMarkets fared better and was purchased last year by Silicon Valley upstart Ariba Inc.

The question for many in the local tech community is, "Who's next?" Are there any hidden gems out there ready to make a similar splash, generating the sort of breakthrough company whose executives, like those at Fore and FreeMarkets, cash out and go on to form even more tech ventures?

The answer, it seems, is no -- and yes. While no one big star appears on the verge of a big breakout, several appear ready to become significant players in the region and possibly nationally, capable of sticking around for years to come and of adding to the growing pool of local tech industry veterans.

"I think in the next three to five years a few companies -- maybe two or three -- will really grow," said Jane Kirkland, a former FreeMarkets executive who now acts as a local tech investor and consultant.

Young companies cited by local tech insiders as being well on their way to becoming stars include Renal Solutions Inc., of Marshall, Akustica Inc., LogicLibrary Inc. and Precision Therapeutics Inc., all of the South Side, Plextronics Inc., of Harmarville, Downtown's TimeSys Corp. and Apangea Learning Inc., of Indiana, Pa.

About the only common bonds among these firms -- some of which are a few years old, while others survived the early decade's crash -- are that they are small and desperate for more funding, and all fall into the broad high-tech arena.

Five-year-old Renal Solutions, which employs 50, makes home-based dialysis equipment, the demand for which is growing along with the nation's waistlines. Three-year-old Akustica, which employs 40, is generating buzz with super-tiny microelectro-mechanical-systems speaker and microphone chips whose use could dovetail with the growing demand for smaller but more powerful electronic devices such as handheld computers and cell phones.

And nanotechnology firm Plextronics, which employs 20, designs electricity-carrying polymers that can serve as the backbone of such futuristic devices as computer screens that roll up like yoga mats to lighting that can be painted on a wall -- devices that experts say are coming but may be years away from mass use.

This is the first time since the heyday of the late '90s that there's so much "group momentum" among local up-and-comers, said Matt Fleckenstein, who works with companies at the state-supported tech start-up generator Innovation Works. Many local firms, slowed down by the dot.bust, are just now proving that their ideas and technology are actually marketable, he said.

They also are starting to find money after a long tech winter that prompted investors to tighten their purse strings if not exit the industry altogether -- slowing progress among these and other tech firms across the country. "So many of these companies are two to three years behind where they thought they'd be," said Kirkland.

Indeed, even though Renal Solutions and Akustica landed $17.1 million and $15 million, respectively, from investors this year, both have yet to mass-market their products. The customers are there, but in Renal's case, it is awaiting Food and Drug Administration approval, while Akustica doesn't plan to ship its first product until later this year. For Plextronics, the issue is even more complex -- its product isn't quite ready and the market for it is still very young.

The other up-and-comers are a little further along -- all have products ready for sale commercially. TimeSys employs 45 and makes software and Web tools for Linux developers, 40-employee LogicLibrary makes software for software developers, Apangea employs 15 and makes Web-based education tools, and Precision Therapeutics provides cancer diagnostic assistance to physicians.

Veteran entrepreneur Sean McDonald joined what was then six-year-old Precision Therapeutics in 2001, bringing with him a successful track record as an entrepreneur and the ability to raise money -- he has secured some $30 million in funds for the company so far. He previously had founded Automated Healthcare, which developed a robotic dispensing system for hospital pharmacies and, since being sold to San Francisco-based McKesson Corp. in 1996, has grown to 1,000 employees with estimated annual sales in the $80 million to $100 million range.

As promising as some of these tech ventures appear, observers doubt any are likely to burst onto the scene with a huge IPO the way Fore Systems and FreeMarkets did. Pittsburgh -- and the country, for that matter -- probably won't see anything along the lines of those two former superstars again, a realization that the overvalued tech firms of the '90s was a fluke.

"I knew then it would never last," said Mars-based marketing and public relations consultant Karen Kovatch, a FreeMarkets veteran who rode the bubble up with her former firm and weathered the slump when it burst. "And anyone who did was stupid."

Stricter regulations and a market that doesn't value technology the way it once did -- when just the promise of revenue, never mind the ability to make a profit, was enough to lure investors -- make blockbuster IPOs the exception, not the rule, for tech firms these days, she said.

Internet search engine star Google may have made a blast with its IPO nine months ago -- its shares have tripled in price since then, nearing nearly $300 in recent it days. But the Silicon Valley star brought something to the table that a lot of busted tech IPOs didn't: profits as well as actual sales. It earned $704 million on sales of $3.8 billion last year.

Venture funding is tight, too. The flow of venture capital into the region remains slow, with only four firms receiving initial funding last year, vs. 18 in 2000, according to Innovation Works, the tech-assistance firm.

Instead of turning to the public markets or venture capitalists to raise money, many promising companies may follow the lead of O'Hara's Spinnaker Networks Inc. and Robinson's Laurel Networks and seek buyers instead. Data storage firm Spinnaker was sold for $300 million in 2003 to Sunnyvale, Calif., giant Network Appliance Corp., and telecommunications equipment maker Laurel was bought last month for $88 million by Israel's ECI Telecom Ltd.

While money, management talent and more money appear to top the list of what entrepreneurs find lacking most in Pittsburgh, Kirkland, the tech consultant and former FreeMarkets executive, doesn't think the situation is so dire or discouraging.

The passing of the days of easy money is a good -- not a bad -- thing because it forces entrepreneurs to prove themselves and their ideas before investors are willing to step forward, she said. It is a lesson learned the hard way by many when the go-go '90s went, taking the investments with it.

"In any healthy market, it's difficult to attract capital and it should be difficult," Kirkland said. "The bar should be very high."

The beauty for the firms that are able to prove their mettle and make a go of it in this tough environment is that they will be led by a management team and employees with the know-how to make a company work. "People are everything," said Dave Becker, a former FreeMarkets executive who now runs his own Sewickley-based private equity firm.