Good news, Los Angeles. There actually is money available here for tech entrepreneurs, even if Silicon Valley continues to suck in a disproportionate amount of venture capital in California.
This upbeat message comes from the annual Caltech/MIT Enterprise Forum, held Sept. 19 at the Caltech campus. Panelist William Crookston, an associate professor at USC’s Marshall School of Business (who required his students to attend the weekend forum), relayed some of his students’ success stories in finding start-up capital locally. James Crumpton, vice president at Silicon Valley Bank, said the bank’s L.A. office is working with a mushrooming number of local tech companies.
Perhaps the most intriguing advice came from Bobby Kotick, president and chief executive of Santa Monica-based game company Activision Inc.
“Don’t think that you need to rely on traditional venture capitalists,” he told an audience of over 120 fledgling entrepreneurs. “Talk to your friends, your former employers, established companies in your field. Don’t limit yourself. Go talk to whoever has money, and you can find an interested backer.”
Kotick should know. That’s part of the strategy he used to get Activision off the ground.
There was cruel irony in CyberMedia Inc. being named the fastest-growing tech company in Southern California at Deloitte & Touche LLP’s recent “Fast 50” awards banquet. Despite posting revenue growth of 129,354 percent over the last five years, the Santa Monica-based utility software company got so deeply mired in financial problems that it sold out to Santa Clara-based Network Associates this summer.
“It’s pretty sad considering one of the things praised at the dinner was the top ranking companies’ exceptional leadership,” one banquet attendee said.
CyberMedia Chief Executive Unni Warrier and Chief Financial Officer Jeff Beaumont stepped down in March, when the company had to reissue its fourth-quarter results to reflect significantly lower revenues than initially reported.
An executive from one of the companies ranked in the bottom third of the Fast 50 tech companies was even cattier.
“We’re not exactly going around crying ‘poor CyberMedia,’ ” he said. “Now we know that we’ll be at least one position higher in next year’s list.”
CyberMedia reported a net loss of $11.7 million for 1997, and was still in the red when Network Associates announced the acquisition in July. Deloitte & Touche based its rankings on companies’ revenue growth over the five-year period of fiscal 1993-97.
Banks usually don’t operate on the cutting edge of Internet activity, but the First Bank of Beverly Hills stood out amid a slew of software companies at last week’s Internet Commerce Expo.
This bank wants a piece of the action.
Not content with quietly providing merchant accounts and processing transactions for other e-commerce providers, First Bank developed its own e-commerce software essentially cutting out the middleman.
“We are truly a one-stop shop, which other e-commerce companies can’t honestly claim,” said David Lippe of First Bank. “We could have a competitive advantage over the other e-commerce companies that need to partner with banks like us.”
Sara Fisher can be reached via e-mail at [email protected].
