This was the year that some of Pittsburgh's most promising tech firms turned out to be fish food for bigger tech sharks.

But that's not necessarily a bad thing for the likes of telecommunications firms CoManage in Marshall and Laurel Networks in Robinson and South Side-based software firm Maya Viz, all of which were sold to out-of-town corporate giants that could choose to grow the local operations or capture their technology and run.

While more mergers and acquisitions are likely on the horizon, tech insiders are expecting 2006 to be a bit different as Pittsburgh finally may be reaping the bounty of its labor.

Expect to see even more start-ups peppering the local landscape while existing firms raise money to hire staff, boost their sales and marketing efforts and bring their products to market.

Now that the local universities -- bolstered by nearly $1 billion in research dollars -- are starting to see success in creating local tech start-ups, tech-focused economic developers are thinking about how to make the industry "sustainable."

That translates to research and technology that consistently create companies that in turn bring more money and talent to the Pittsburgh area.

"The baby is moving towards adolescence," said Doros Platika, president and chief executive officer of the Hazelwood-based tech engine the Pittsburgh Life Sciences Greenhouse, referring to the local tech industry.

With a pipeline of technology ready to be spun out into the marketplace, the challenge for the region, he added, is to continue building support and services for these companies that will enable them to grow. For life sciences firms that means access to cost-effective labs and a network of partners to aid with research and development. At information technology firms, it's a string of companies that can serve as trial or "beta" customers to help them fine-tune their products.

Hopes especially are high in the life sciences sector, where in 2004 the University of Pittsburgh churned out 10 start-ups from technology it cultivated, seven of which, university officials say, remain in the region. Carnegie Mellon University with its strength in the software, robotics and other material engineering sectors, also made strides, spawning four firms in 2004.

The local IT sector is not to be dismissed, despite the fact that it hasn't managed to spawn as many firms, said Don Smith Jr., vice president of economic development at Pitt and CMU. The region's strong presence in IT-focused software and engineering firms continues as demonstrated by the troika of Silicon Valley tech titans that recently set up research and development shops in this region -- Apple Computer Inc., Google Inc. and Intel -- not to mention disc drive maker Seagate Technology, which has been here since 2002.

Pittsburgh's tiny tech triumphs pale in comparison to booming areas such as Boston and the Silicon Valley where gargantuan companies and research institutions create, in some cases, double the technology and young firms. But in this reformed steel town that is trying to etch out its future in technology, baby steps matter. "We're approaching a turning point." Dr. Smith said. Pittsburgh is steadily becoming known as a place to snag cutting-edge research talent in a "cost effective environment."

Companies are "starting to position themselves for real growth," said attorney David Smith, a partner at Downtown-firm Pepper Hamilton who specializes in the life sciences industry. Several local upstarts, he added, will move from being merely a "company on paper" to a full-fledged firm with employees, facilities and a soon-to-be-marketable product.

Another sign of growth, said Dr. Smith, is that the life sciences scene, like the IT sector before it, is beginning to spawn second-generation entrepreneurs who've left one bio-tech venture and are being "recycled" into a leadership role in a new start-up.

While money for these ventures still won't be easy to come by, the fund-raising climate, once dismal, has turned a corner.

"We saw the low point in 2004 in venture funding," said Matt Harbaugh, who works with both companies and investors at the tech-based economic development group Innovation Works. "We have every reason to believe we're going to continue an upward trend."

In 2005, the region saw five tech start-ups land their first infusion of cash from venture capital firms, up from three firms in 2004 and only two during the height of the tech downturn in 2003. While a handful of young companies raising money to grow may be a blip on the radar screen, it's a sign that Pittsburgh is slowly, yet steadily, building a critical mass of technologies, entrepreneurial talent and firms.

Overall, 10 local companies -- including Marshall-based medical device firm Renal Solutions Inc., Robinson-based robotics firm Aethon Inc. and South Side-based audio chipmaker Akustica Inc. -- landed a total of $70 million in venture capital in 2005 and tech watchers say they expect 2006 to yield more.

"The market may shift some of its attention away from mergers and acquisitions to investing or funding start-up or growth companies," said Dr. Smith.

Now that tech's nuclear winter has melted, investors who once were conservative with their dollars may be more inclined to invest in young technologies and firms.

Dr. Smith and Innovation Works officials even hinted that a new venture capital fund could emerge -- although they offered no details. Dr. Smith said, "I get a sense that senior leadership in the region across a variety of industries is really gaining an appreciation for this region's potential for technology growth."