4 Md. venture funds rated among top 100

TEDCO is most active early-stage investor in survey for magazine

July 12, 2005|By William Patalon III | William Patalon III,SUN STAFF

With the 15 investments it made last year, the Maryland Technology Development Corp., a quasi-public organization that promotes technology transfer, was the most active early stage investor of the country's top 100 venture-capital funds, according to a new survey.

Three other Maryland organizations also made the list, which appears in the July issue of Entrepreneur magazine.

New Enterprise Associates of Baltimore and Novak Biddle Venture Partners of Bethesda each did six deals during 2004, while the Maryland Department of Business and Economic Development's venture fund was involved in four deals, according to the survey.

The "5th Annual VC 100" list was developed from an analysis of the MoneyTree survey of venture funding. The list was prepared for the magazine by PricewaterhouseCoopers, Thomson Venture Economics and the National Venture Capital Association, the partners on the quarterly MoneyTree reports.

This was the second straight year the state-financed TEDCO topped the list. It led last year's survey because of the 15 deals it did in 2003. The state Department of Business and Economic Development came in a close second nationally in last year's survey, thanks to the dozen financing deals it did in 2003, the survey's organizers said.

The strong showings of Maryland public- and private-sector venture capital funds in early-stage financing bodes well for the state's economic vitality, said Mark G. Heesen, president of the National Venture Capital Association.

Md. `very competitive'

"Maryland is very competitive in this space, in growing emerging companies," Heesen said yesterday. "This shows that there are some very good things being done in Maryland that aren't being done in other parts of the country."

During a period in which private-sector venture capital funds nationally have been largely reluctant to invest in startups, Maryland has benefited from TEDCO and the Department of Economic Development filling some of the void, experts said.

"We're talking about investments that, at the very earliest, aren't going to come to fruition for three, five or seven years," said Kirk Walden, national director of venture-capital research for PricewaterhouseCoopers. "But it takes this kind of investment to get things going" in biotechnology, telecommunications and information-technology.

Helped 608 firms

The 110 venture capital funds that made the Entrepreneur magazine list provided $2.68 billion in first-round financing to 608 companies, all either startups or early stage enterprises, according to the survey. Maryland venture capital funds were responsible for 31 deals.

While seed financing and early stage investments are the riskiest category of venture financing, TEDCO employs one of its major mandates-promoting the transfer of promising technology from universities or government labs into the private sector-to help lessen that risk, according to Phillip A. Singerman, the organization's executive director.

Before TEDCO will invest in a company that firm must have in place a formal licensing deal or technology-transfer agreement, Singerman said.

TEDCO's deals

The 15 companies TEDCO made early stage investments in during 2004:

Company name/Location

Expression Pathology Inc., Gaithersburg

Chesapeake Perl Inc., College Park

Atlantic Biomass Conversion Inc., Frederick

AriaVax Inc., Gaithersburg

Innovative Biosensors Inc., College Park

Real User Inc., Annapolis

DVIP Multimedia Inc., Rockville

Diagnosoft Inc., Baltimore

Akonni Biosystems Inc., New Market

AlphaTrek Inc., College Park

Salar Inc., Baltimore

Alba Therapeutics Inc., Baltimore

Aurora Analytics LLC, Catonsville

RetroTherapy LLC, Bethesda

Squarespace Inc., College Park

Gentag Inc., Potomac

Source: Maryland Technology Development Corp.

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