Hawai'i tech firms making pitches for venture capital
| • | A look at the lineup and what they offer |
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| "That revenue prediction is so unrealistic it's not even funny," Kirk Westbrook, of International Venture Fund, said of one firm's projection for revenues of $4 billion by 2005. | "The reality is that fund raising is hard, and the perception is that it's harder this year than it was last year," said Bradley B. Bertoch, president of the Wayne Brown Institute. |
| Advertiser photos by Bruce Asato | |
By John Duchemin
Advertiser Staff Writer
Greg Murphy is convinced he's got the best thing since Al Gore invented the Internet. His company, 'Aiea-based PixelWorld Networks Inc., has figured out a new way to compile and distribute online video.
Company president Murphy is unseasonably bullish. By 2005, he predicts, PixelWorld's revenues will grow from less than $1 million to more than $4 billion.
That's "b" as in billion.
It's also "u" as in "unrealistic," according to a group of venture capitalists that gathered Tuesday to see PixelWorld and five other Hawai'i companies present business plans and state their cases for getting millions of dollars in venture investments.
"That revenue prediction is so unrealistic it's not even funny," Kirk Westbrook, managing director of International Venture Fund, said after listening to Murphy's pitch. "This sounds too much like a dot-com company pitch from 1998."
The meeting was a practice session for a critical test June 21 on Maui, where the companies will be featured in the 2001 Investors Choice International conference.
At that event, each Hawai'i company gets 10 minutes to introduce itself to dozens of mainland and local venture investors.
A successful pitch could lead to millions in venture funding; a misstep could kill their chances. That's particularly true this year, when slow economic conditions and the collapse of last year's venture-driven bubble have investors treading very cautiously.
Advertiser library photo • March 21, 2001
"The reality is that fund raising is hard, and the perception is that it's harder this year than it was last year," said Bradley B. Bertoch, president of the Wayne Brown Institute, the event's primary sponsor. "Entrepreneurs have to have a good deal, something that's smart and of real value."
David Clements of Hawai'i Biotech works with a dengue protein sample in his lab. The firm is one of six that will be featured in the 2001 Investors Choice International conference on Maui on June 21.
Bertoch said the event should draw about 100 investors this year — down from 150 last year, when the market was far stronger. Still, it could be the companies' best chance to get venture funding, particularly since the overall capital market has gotten extremely tough as the economy slows, Bertoch said.
Bertoch predicted that two or three of the Hawai'i companies at the conference would generate some serious interest by the investors in Maui. In past years, about 60 percent of the presenting companies have gone on to get some form of venture funding, he said.
This year's Hawai'i presenters are a diverse group. Two of the six — Destination Technologies Inc. and Viata Online — are centered on software platforms for the tourism industry. Hawai'i Biotechnology Group is a vaccine developer and research firm. PixelWorld is into online content streaming. OptimEyes Supply Corp. wants to do back-office logistics for the eyewear industry. Maui-based IndaSea is a software developer.
Each received feedback from Westbrook, Bertoch, and venture capitalists Bill Richardson of HMS Hawaii, Randy Havre of Hawaii Venture Group and Debra Guerin of International Venture Fund.
The VCs' comments ranged from delighted to skeptical. The entrepreneurs appreciated the extra coaching, even when the commentary turned grim.
"Thank you very much," said John Hendrickson, co-founder of Destination Technologies, after having his presentation picked apart for being too long, unfocused and unconvincing. "This is truly invaluable to me."
