Tuesday, September 19, 2000

Venture capital exceeds $1 billion

Local funds nearly doubled since last year

By Cliff Peale
The Cincinnati Enquirer

        Cincinnati venture-capital funds now manage more than $1 billion, most of it available to finance startupsand expansions by local entrepreneurs.

        Officials will announce today that the three largest local venture funds already have invested $425 million of that money in 165 companies, more than a third of them in Greater Cincinnati.

        The venture funds have allowed companies like HomesThatClick.com, the online residential real-estate agent, to increase local employment, recruit more high-tech workers and provide new high-tech services.

        “We think it's working out well for us,” said Vince Broerman, chairman of HomesThatClick.com, which got $1 million in venture funding from Cincinnati's Walnut Capital Fund in May.

        HomesThatClick.com now employs more than two dozen workers in four markets, compared with two early this year.

        In exchange for a cash investment, venture-capital funds generally get an equity stake in the company and have a say in its operations.

        In 1990, Greater Cincinnati was the largest metropolitan area in the country with no local venture-capital funds. It now is the fastest-growing in the country, said Jack Wyant, president of Blue Chip Capital Co., the largest of three mainline funds.

        The $1.02 billion under management by those three funds — Blue Chip, Walnut and River Cities Capital — is nearly double last year's $570 million.

        The growth is being driven by the fourth version of the Blue Chip fund, which should close next month at about $300 million. Early next year, River Cities will roll out $150 million in the third version of its fund, said Glen Mayfield, co-managing director.

        All eight local companies receiving investments this year are high-tech. They include Internet or software companies such as Planet Feedback, Spotlight Solutions, Bluespring Software and Atomic Dog Publishing.

        Together, the three local firms invested about $20 million in those eight companies, drawing about $50 million from out-of-town venture funds They now employ close to 370 local workers.


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