Tech Talk—Party Atmosphere Gone, Serious Deals Get Attention

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Sober up.

That’s what local investors and entrepreneurs alike did at last week’s Sixth annual Southern California Technology Venture Forum.

Yes, there was a cocktail party at Mayor Riordan’s Getty House on Monday night as part of the annual get together, but the gathering of VCs and fundraising entrepreneurs at the Century Plaza Hotel on April 17 was marked by a seriousness that was missing at last year’s event.

“There’s an earnestness in the community compared to last year,” said Victor Hwang, COO of the L.A. Regional Technology Alliance, which organized the event with the L.A. Economic Development Corp.

A sea of tailored blue suits listened to presentations from entrepreneurs, a stark contrast to the event last year, when fierce deal-defending and deal-making in the casually dressed crowd made for a raucous event.

“What we’re seeing is real businesses with real revenues and a stronger focus on technology,” said Joseph Marks, managing member of L.A.-based Smart Technology Ventures.

And what kind of tech startup is Marks after?

Digital signal processor providers. DSP technology translates light, sound and other signals into digital computer language.

Overall, Marks said he and his colleagues are looking for “visibility to revenues so much visibility that it’s there.”

The 16 presenting startups at last week’s forum, selected by a group of business leaders from a list of 100 as the most likely to secure funding, provided that visibility.

Consider Voiceboard Corp. The Oxnard company, a provider of embedded software and hardware for the telecommunications industry, is already profitable and reported revenues for fiscal 2000 of $3.8 million, up from $800,000 in the previous year. It already has customers like Motorola Inc. and Boeing Co. Its patented technology was commercialized in 1998 from previous U.S. military applications. CEO Greg Peacock, an experienced engineer and founder of two other startups, is looking for $10 million to ramp us his company’s sales and marketing efforts.

Minutes after his presentation, Peacock was approached by Dana Warren, principal with law firm Riordan & McKinzie, who had nothing but praise for Voiceboard.

EHow Inc.’s CEO Edo Segal also won accolades from members of the audience. In his presentation, Segal conceded that his company didn’t have any revenue in 2000, but he is projecting revenue for 2001 to be $2.5 million. While the company’s name harkens back to halcyon dot-com days, eHow has a serious core technology that searches, accesses, indexes and redistributes tens of thousands of content sites in real time. For instance, a user can type in a key word and find up-to-the-second audio, video and print media that mention the word. The tech-savvy U.S. military has already developed this technology, but does not license it to the private sector. Segal, who said the eHow technology came from Israeli R & D;, is seeking $10 million to take his product to market.

Chances are, he’ll get it.

“They have much greater odds than the masses of business plans that come over the transom, because they’ve gone through the screening and coaching process (of the Venture Forum),” said Jeffrey Starr, general partner with San Diego-based Mission Ventures.

Starr seemed impressed after hearing presentations from Voiceboard, eHow, and others like encryption and content protection provider Vidius Inc. and cancer detection device maker Medical Tactile Imaging LLC.

“It shows you that, despite the doom and gloom, there is an undercurrent and fervent of entrepreneurial activity in L.A.,” Starr said. “The business plans have much more focus on hard-core technology, some sort of competitive advantage and a higher degree of attention on getting to profitability.”

And, he added, there are “still plenty of investors mandated to put money to work.”


Interactive Branding

A high-tech, theme park approach to branding has enabled Edwards Technologies to skirt the ongoing advertising slowdown.

The El Segundo company designs and installs interactive, multimedia displays that companies like Universal Studios, Warner Bros., Disney, Volkswagen AG and others use to attract consumers.

Edwards’ founder and CEO, Brian Edwards, has an approach to branding that is apparently captivating to corporations and consumers alike.

“Going digital is no longer just a half-assed effort to be hip,” Edwards said. “It’s about branding and entertaining.”

The company specializes in designing software that operates in multiple media formats, blending audio, video and computer technology.

Volkswagen’s Autostadt (Auto City) in Wolfsburg, Germany, which opened last summer, is a case in point. The attraction/factory is like a mini-Epcot Center, except that countries of the world have been replaced by the brands of VW: Lamborghini, Bugatti, Bentley, Audi and VW. Visitors can watch an assembly line at work, operate a car simulator and custom-design a new car for VW.

Edwards would not disclose the revenues that his firm generated from its work on that project, and also declined to reveal the company’s year-end financials.

Next month, Edwards plans to unveil a project for the city of Dayton, Ohio called “Riverscape A Five Rivers Fountain,” which includes a sound, laser and light show on the banks of the Great Miami River.

Other current projects include a performance theater for the new Tiger Woods Center at the Nike headquarters in Beaverton, Ore., and a multimedia performance space for Vans Inc. in Orlando, Fla.

“We used to be focused on providing technology for solving a perceived question or problem,” Edwards said. “Now, we’re focused on providing technology for the telling of a story.”

That electronic storytelling is especially effective for companies trying to reach younger audiences.

“People still talk about the MTV generation and its short attention span, but we’ve gone way beyond that now,” Edwards said. “Kids get bombarded by media messages all the time, and they can suck it all in. Their ability to process information has increased in relationship to the speed of computers.”

Therefore, Edwards argues, branding must keep up to speed, and the best way to do that is by creating “immersive experiences.” The idea, he said, is to “propel the participant into a multi-sensory world of sound and light.”

Staff reporter Hans Ibold can be reached by phone at (323) 549-5225 ext. 230 or [email protected].

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