Venture Capital

AFTER A NEARLY four-year slowdown, money is once again beginning to flow into the biotechnology sector. But it's more a trickle than a torrent. During the first six months of this year, initial public offerings raised more than twice what they did all of last year and the most since the technology market peaked in 2000. Biotech companies that are public have been going back into the market with secondary offerings, and promising young start-ups are winning venture capitalists' attention.

Ruxton Pharmaceuticals, a local bioscience start-up focusing chiefly on finding a treatment for Lou Gehrig's disease, has secured $5.2 million in a first round of private funding, including $1.7 million from venture capital giant New Enterprise Associates, Ruxton and NEA announced yesterday. At a time when the Baltimore region is working to build up its biotech sector, executives say yesterday's deal underscore's the area's bioscience strengths: Ruxton will be locally based and has licensed technology developed by a prominent Johns Hopkins researcher, while the Menlo Park, Calif.

Laurance Rockefeller, 94, a conservationist, philanthropist and leading figure in the field of venture capital, died in his sleep yesterday in New York City. The cause was pulmonary fibrosis, a spokesman said. Mr. Rockefeller -- the fourth of six children of John D. Rockefeller Jr. -- was No. 377 on this year's Forbes magazine list of 587 billionaires, with $1.5 billion. But he was perhaps best known for his environmental work: He served under five presidents in several capacities related to conservation and the outdoors.

About six years ago, Scott and John Ferber gave their mother a belated birthday gift - a nearly worthless stock certificate in their newly formed company, Advertising.com Inc. Today, Sandra Ferber - and her sons - are multimillionaires. Yesterday, the little-known Internet advertising company with headquarters in Locust Point agreed to be sold to media giant America Online Inc. for $435 million in cash. "This is a dream come true," said Scott A. Ferber, 35, who beamed and walked down an office hallway with his brother, bantering with employees and shouting, "Rock the Casbah," from a 1980s song by rock band The Clash.

SCOTTSDALE, Ariz. - A full-fledged Windows computer the size of a videocassette. A cure for spam. A device that copies and stores all your DVD movies and music CDs. Technology companies never stop dreaming, even as the Silicon Valley recession drags on, and some of the most interesting ideas made their public debut at the Demo show here. The 14th annual Demo, which ran Feb. 16-17, gave companies a chance to make a very brief pitch from a stage at the Westin Kierland Resort. Most presentations are limited to six minutes, and some are held to just 60 seconds.

THE PARTNERS at New Enterprise Associates, Baltimore's storied $6 billion venture-capital firm, are probably not thrilled that this column will disclose their confidential results from two decades of investing in health care and technology startups. But they seem to understand that times change and that light will pierce the exclusive venture-capital club whether venture capitalists like it or not. It's hard to hide $6 billion. Venture capital, which mints companies from dreams and ignited the technology boom of the 1990s, has become too big, too lucrative and too dependent on government pension money to operate in the shadows.

Sourcefire Inc., the Columbia supplier of network security systems, is expected to announced today that it has raised $15 million in a third round of investment financing, led by Sequoia Capital. Sequoia Capital is a Silicon Valley venture capital firm that has seeded such tech successes as Cisco Systems and Apple Computer. Chief Technology Officer Martin Roesch founded Sourcefire three years ago in his Carroll County living room. He is best known in technology circles as the author of Snort, the most widely used network intrusion detection system in the world.

Biotechnology firms hungering for new capital should find more receptive audiences in 2004 than in recent years. The early-stage companies that make up the bulk of Maryland's biotech sector may still find it difficult to land financing, however. More established biotech ventures will land most of the new capital, through angel investments or initial public offerings of common stock, experts say. "I think it will depend on the IPO market," said Tom Salemi, editor of the Venture Capital Analyst/Healthcare trade journal in Wellesley, Mass.

Baltimore's biotechnology sector has undergone tremendous growth over the past decade, but it won't evolve into a major economic engine unless some key challenges are addressed, industry experts said yesterday. Overcoming those hurdles will be critical to the success of multimillion-dollar biotechnology parks planned for Baltimore's east and west sides, about 350 people attending a Greater Baltimore Committee "business outlook" conference were told. Walter H. Plosila of Batelle, the institute that operates a research center in Harford County, said Maryland is one of the top states in the country when it comes to the biosciences, largely because of the concentrations of companies in Howard and Montgomery counties.

The former head of a Timonium-based venture capital group admitted yesterday to spending hundreds of thousands of dollars in company funds on personal expenses such as nannies and a house rental on Martha's Vineyard, using a scheme authorities say she employed a decade earlier with money from an account at the Johns Hopkins Children's Center. Mary Ann Gray, 48, who served 10 years as executive director of the Mid-Atlantic Venture Association, pleaded guilty to one count of mail fraud in U.S. District Court in Baltimore.