In lean economy, Columbia firm helps fatten companies

Wooten Ventures provides funding, management help

Small business

August 05, 2002|By TaNoah Morgan | TaNoah Morgan,SUN STAFF

Clarence Wooten is making a business of making businesses.

His 1-year-old Wooten Ventures, a technology investment firm in Columbia, is offering itself as an angel investor and start-up partner with seed capital that will fill in management gaps, help the company find other investors, share office space and map out a detailed plan for getting acquired.

It also is licensing technologies from European companies and building infrastructure that would allow the foreign firms to launch their products in the United States.

Wooten Ventures - a kind of business incubator - has invested $150,000 in two companies in its first year, and is studying the business plans of several others. Wooten said he gets about two applications each week, and the firm is diligently looking into three European companies that he hopes will net a partnership within a few months.

The companies Wooten Ventures has backed so far appear to be doing well. Wirespan Communications Inc., which installs communications products for wireless home networks, phone systems and home theaters, is anticipating moving from Wooten Ventures' office in Columbia to its own space by the fall. KeyVision LLC, which is creating a novelty product targeting baby boomers, also expects to be on the market by fall.

"We're adept at creating and refining business models," Wooten said. "I wanted to partner with the entrepreneur who has a strong domain expertise, whether that's strong engineering talent or particular expertise they've gained by working for a private company."

Wooten Ventures is a welcome entity during a time of bear markets, terrorist threats and business accounting scandals. Those conditions, which have affected the national economy, have caused venture capitalists across the country to think twice before pouring money into the next big idea, according to a MoneyTree survey by PricewaterhouseCoopers, Venture Economics and National Venture Capital Association.

Venture capital funding continued to fall in the second quarter of this year, and stands at its lowest level since 1998, according to the survey.

That may make the job of finding the next investor a little more difficult for Wooten Ventures, but Steve Dubin, an investor who manages the Chesapeake Emerging Opportunities angel fund, said opportunities abound.

"I think the nice thing about angel capital and venture funding is there are a lot of things that will work," Dubin said. "If you have money and implementation skills and you can match up with some of the creative skills, it could be a good marriage. They're cutting themselves a little niche. I can see how that makes sense."

Wooten Ventures, which consists of Wooten, partner Jens Bogh, an information technology consultant and office administrator, has about $1 million available to invest in companies that develop enterprising software applications or data communications products, such as Internet software or Web services products.

It will invest up to $100,000 in seed money - enough to help a company begin generating revenue or move research and development enough along to obtain venture capital funds. Wooten and Bogh will also fill in management gaps for a company, and develop a detailed planning process for helping a company get acquired, Wooten said. The goal is to get the company merged or acquired within three years, Wooten said.

"We roll up our sleeves alongside the entrepreneur," he said. "Because our model requires us to be so hands-on, we can only do 3 1/2 to four companies at a time. Wooten Ventures doesn't see money until companies are acquired."

The firm also is concentrating on building U.S. entities for European companies that have technology they want to sell in the United States.

Wooten said he and Bogh bring a global network of firms and contacts to the companies they support. But they've also developed an acquirement planning process the firm calls "reverse liquidity" that is aimed at helping a company get acquired.

The process, which targets potential buyers and plans the company's progress and development around the buyers' business operations, grew out of the partners' entrepreneurial experiences. Bogh successfully raised money from banks in Europe, and Wooten founded and sold Imagecafe.com to Network Solutions in 1999 for $23 million, seven months after it was launched.

The business, Wooten said, allows him to go back to doing what he enjoys most: building companies.

"I've always been just an entrepreneur," he said.

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