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Walker Ventures succumbs to bad economy

Founder Steve Walker has been called
Founder Steve Walker has been called "godfather" of Washington area tech start-ups. (Michael Lutzky/the Washington Post)

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By Mike Musgrove
Washington Post Staff Writer
Wednesday, December 16, 2009

Walker Ventures, a pioneering Howard County venture-capital firm, said this week that it plans to close its doors, a casualty of tough economic times that have left investors leery of technology start-ups.

"The conditions are just too difficult these days," said founder Steve Walker, who recently decided not to pitch investors on launching a new fund. "I'm going to continue to do angel investing, but I'm not going to try and raise another fund."

It will likely be a year or more before Glenwood-based Walker Ventures officially shuts down, he said, but the firm will not be making any new investments.

Over the years, Walker, 66, has been described in news accounts as a "rock star" and "godfather" of the Washington and Baltimore areas' tech start-up communities. Early this decade, during brisker economic times, the entrepreneur tried to launch a helicopter service for deep-pocketed executives wanting to travel quickly between Washington and New York.

Walker Ventures' most recent fund has invested in a handful of tech companies, including FortiusOne, an Arlington firm that develops software used by businesses to identify geographic trends in their markets. Another firm Walker has invested in, Naviscan, builds an imaging device to help detect cancer. Originally based in Rockville, Naviscan moved to California.

After 20 years working as an electrical engineer at the National Security Agency and the Defense Department, Walker left in the early 1980s to start his own network security company called Trusted Information Systems. In 1998, he took that company public and sold it to Network Associates, receiving a large chunk of the firm's $350 million selling price.

Together with some of his former associates from TIS, Walker launched his first investment fund in 1998 with $5.3 million. A second fund, with nearly $40 million, quickly followed.

In the beginning, Walker Ventures invested only in Washington-area start-ups, though many left the region after they matured, he said. The firm typically awarded young companies their first round of investment in amounts of $250,000 to $500,000.

"It was a wonderful time in the early days," Walker said. "In the early 2000 period, Washington had a pretty vibrant thing going here. I think that we've lost a lot of that."

Sean Roddy, chief operating officer of accounting firm Watkins Meegan, said that Walker has been one of the local tech industry's major forces.

"When people ask you about who's an angel that's active in the area, Steve's name is always at the top of the list," said Roddy, who knows Walker from serving on the the Howard Technology Council's advisory board.

Walker Ventures' investments in recent years have included Brainbench, a Chantilly-based employment-testing firm. Brainbench was acquired by a larger player in that market in 2006.

Walker will be "sorely missed" by the Washington area technology start-up community, Mike Littman, co-founder of Brainbench, said in an e-mail.

"His importance to the tech boom of the late nineties and early 2000's as well as the leadership experience and prudent guidance he provided to his venture fund companies will not be soon forgotten."


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