There could be a lot of money changing hands after today.
Capital Connection 2001, a fair that links venture capitalists from around the country with growing technology companies looking for money, returns to Baltimore today after a six-year absence.
"There's been dramatic growth in venture capital going into technology companies in the Baltimore County, Baltimore City area," said Frank A. Adams, managing partner and founder of Grotech Capital Group. "Likewise, there's been tremendous growth in the amount of venture capital firms."
Venture capitalists invested $472.9 million in 13 Baltimore companies in 2000, compared with just one investment of $2 million in a single company in 1995, according to the Mid-Atlantic Venture Association, which runs the fair.
In Baltimore County, venture capitalists invested $137.8 million in eight companies last year, compared with an investment of $13 million in four companies in 1995, according to MAVA.
Charles McMillion, chief economist for MBG Information Services, a Washington consulting and forecasting firm, said that between 1995 and early 2000, there were many new start-ups in Baltimore and around the country and that venture capital was booming.
But this year has been much harder as the economy and the technology sector, in particular, struggle.
Venture capital investments in the United States fell to $11.7 billion in the first quarter of this year, compared with $26.7 billion in the corresponding quarter last year, according to Venture Economics and the National Venture Capital Association.
"Over the past year, it has, along with the Nasdaq and tech sector generally, it's really been hammered and we're all hoping for a comeback," McMillion said. "But venture capitalists are desperate to find deals that have promise right now, and on the other hand, companies are having a much, much harder time finding funds than they had a couple of years ago."
The Capital Connection fair started in Baltimore in 1986, said Adams, who is also chairman and founder of MAVA.
For years, it was held each year either here or in Philadelphia. But after 1995, the fair was either in Philadelphia or Northern Virginia. "There was simply not enough critical mass to keep the process going," Adams said.
But Adams said strong growth in venture capital financing for local technology companies has helped pull the fair back to Baltimore this year, a plan he said initially met with some resistance.
"I just had to do a significant amount of arm-twisting to get the MAVA board to re-look at Baltimore and bring the fair back here," he said. "It was not until I was able to demonstrate with the quality of the companies that we had that the end result would be that our reputation ... would not suffer."
The fair begins today and continues tomorrow at the Baltimore Marriott Waterfront Hotel. About 250 companies applied to come. Of those, only 50 were selected to make pitches to venture capitalists at the fair - 23 of them from Maryland, Adams said.
MAVA is expecting about 1,200 attendees at the fair, about half of whom will be venture capitalists from around the country. The venture capitalists at the fair will represent about 200 firms with an estimated $100 billion under management, Adams said.
Two years ago, Adams said, the companies presenting at the fair were mostly entrepreneurs with MBAs and interesting business plans. This year, many of the presenters have doctorates and serious technologies to show off.
"These are serious people with serious ideas," he said.