Venture Capital

Mary Ann Gray, the former high-profile business executive and socialite who admitted in 2003 to stealing thousands of dollars from her venture capital group, was sentenced yesterday to serve two years in prison. "The embezzlement in this case was not one of a crime of opportunity," U.S. District Judge Benson E. Legg said. It was in fact, Legg said, a well-thought-out scheme that lasted years before Gray was criminally charged. The sentence handed down yesterday also called for Gray to spend 30 months on supervised release after her prison term and pay $402,000 in restitution.

Of all the beneficiaries of last week's $2 billion deal for MFS Communications Co. to take over Internet access provider Uunet Technologies Inc., one of the biggest will be a Baltimore venture capital firm that stands to make $189 million on a $4 million investment.New Enterprise Associates controlled 10.1 percent of Fairfax, Va.-based Uunet, having paid $3.9 million for the stake in 1994. NEA endured a wild roller-coaster ride in Uunet's stock price after the company went public last May, and stands to make a killing for its clients when the merger goes through.

Although the Alex. Brown & Sons name has officially disappeared from the Baltimore scene, such legacies as the locally based ABS Capital Partners venture capital group should help guarantee the once-venerable investment bank is never forgotten. Started in 1990 within Alex. Brown, ABS Capital became a separate company in November 1995. The firm has made a mark by investing in good companies, generating double-digit returns for investors and making sure its venture companies are on solid footing when they are sent on their way, ABS officials and its partners say. "If you invest in great companies, and help them become even greater companies, they will continue to do well over a long period of time," said Timothy T. Weglicki, who co-founded the firm with Donald B. Hebb Jr. (ABS Capital Partners, at 400 E. Pratt St., shouldn't be confused with ABS Ventures, a group still associated with Deutsche Bank, the owner of what was once Alex.

When Scott Stouffer and Robert Troutman asked state officials in 1994 to make a $250,000 investment in their young computer networking company, Visual Networks Inc., the venture wasn't exactly a riveting success story.The Rockville company had no sales and its key product -- a computerized system to track and manage the vast bits of data that move rapidly across wide-area networks, like the Internet -- was still in development.But state economic development officials were confident the investment would be well-placed, and gave the promising high-tech start-up a boost at a critical juncture.

The Baltimore-Washington corridor is an economic powerhouse in many areas -- federal contracting, anyone? -- but it may soon become known as the nexus of another, growing industry: online education. The $400 million purchase of a local education technology startup by a British company this fall is the latest sign that the region is successfully producing firms that develop cutting-edge technologies for schools or seek to transform them entirely. The purchase of Connections Education Inc. by Pearson PLC, a London-based education publishing conglomerate and owner of the Financial Times newspaper, was also among the biggest acquisitions of a Baltimore company in years.

Emerging from the University of Pennsylvania in the heady late 1960s, Charles W. "Chuck" Newhall III briefly fancied himself the next Ernest Hemingway.To jump-start the fire and romance of a literary career, Newhall enlisted in the U.S. Army where he received the Silver Star, Purple Heart and other awards for his service in the Vietnam War. But in short order he found his writing skills to be, well, unremarkable.Suddenly, his father's career as a professional investor -- a successful one at that -- in start-up businesses didn't look so bad. After all, he had made his own mark on history, financially backing ventures in what is now the commercial rocket industry.

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.

Venture capital stake in Sylvan pays off bigSt. Paul Fire & Marine Insurance Co.'s venture capital investment in Columbia-based Sylvan Learning Systems Inc. is paying off big time.The Minnesota-based Sylvan shareholder filed documents with the Securities and Exchange Commission last week saying that it plans to sell much of the 3.36 percent stake it held in the Maryland company at the end of last year. Its potential profits on the 365,000 shares it filed to sell can conservatively be estimated at more than $12 million.

In a handful of hotel meeting rooms in Baltimore this week, 50 of the mid-Atlantic area's smartest young companies will be tossed to the mercies of 250 of the nation's biggest venture capital checkbooks. And the organizers of Venture Fair 91, which opens tomorrow at Stouffer's Inner Harbor hotel, are waiting as anxiously as a matchmaker from "Fiddler on the Roof.""The purpose of the fair is to have 50 venture-capital-backed companies present their business plan, and the hope is to draw venture investment from all over the country into the mid-Atlantic region," said James T. Caulfield, a Venture Fair organizer who is also a partner at the accounting firm of Coopers & Lybrand in Baltimore.

The Federal Home Loan Bank of Atlanta is scheduled to announce today a $250,000 grant to the College Park-based New Markets Growth Fund, part of a new national program to provide $20 million in venture capital and technical assistance to small businesses in low-income areas. "This is the first cash commitment for technical assistance," said Mark Grovic, fund managing director. Including service grants, the fund has received more than $600,000 toward technical assistance. The fund, sponsored by the Smith School of Business' Dingman Center for Entrepreneurship at the University of Maryland, College Park, is one of seven proposals chosen by the Small Business Administration to make use of federal money for investment in economically distressed areas.