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Pitching for a High-Tech Payoff
By Beth Burkstrand With that self-deprecating quip, MacSwain had accomplished the preliminary goal of every not-yet-public company that presented at the Washington area's second annual Technology Investor Conference yesterday: He had seized the fickle attention of the venture capitalists and analysts in the room. Now all he had to do was keep it during a 30-minute pitch on why his company deserved their money.
Getting the area's tech industry better global exposure has long been a priority for industry leaders here. To that end, they organized the first investor conference last year in a bid to increase the attention Wall Street paid to local companies. This year, they added companies that hope to go public soon, such as SpaceWorks, hoping to stir up more interest. On the first day of the two-day gathering, it often seemed the keys to the hearts of the financial analysts and venture capitalists was their stomaches. With free coupons for Ben & Jerry's ice cream, Microdyne Corp. of Alexandria sought to persuade people to come and "Get the scoop on the new Microdyne." Much of the conference was devoted to presentations by local companies that are already public and want more respect and higher investment ratings from Wall Street analysts. While the small nonpublic companies held forth in the tiny Meridian room, biggies such as information services company BTG Inc. got a ballroom. Other public companies going through the drill included Microstrategy Inc. and Network Solutions Inc. MacSwain said after his presentation yesterday that he had no illusions about a quick payoff. "I haven't had any experience where a conference like this has brought in capital," said the chief executive, one of the few who defied convention and came in light-colored clothing. Rather, he went to the conference, his fifth tech gathering so far this year, for the visibility and what it might bring later. The five-year-old SpaceWorks develops and sells software applications that companies use to process orders from other companies on the World Wide Web. SpaceWorks claims it can reduce "human cost" (i.e., the number of real people needed to log the orders) by up to 80 percent. Its customers include Primus Telecommunications and Sterling Commerce. Owned by Columbia Capital Corp. since 1996, the company is trying to round up another $10 million so it can expand its product line and get into the overseas markets, he said. It plans to go public sometime in the next 12 to 18 months. MacSwain didn't release financial information, citing the company's private status. From all appearances, his presentation went off without a hitch. The room was so packed that one staffer from the Nasdaq Stock Market grumbled he couldn't get in. Audience members asked MacSwain questions, which he answered with confidence. "I was waiting for some hard ones," he said afterward. "Those were softball." People clapped at the close of his presentation. Some lingered afterward (missing their opportunity for that long lunch), to offer business cards and make appointments to visit the company. It was the same place, but a different reception for Neotonus Inc., a biomedical company that despite its Georgia headquarters came to the conference. It has developed technology intended to stimulate nerves and revive atrophied muscles that has received Food and Drug Administration approval as a treatment for incontinence. Just a handful of people showed up for its time in the room, where now the lights were dimmed, and listened to company chief executive Tony Morris talk up the firm in a slow Southern drawl. "We're here to heal and do no harm," said Morris, repeating a company slogan. "And hopefully make a little money." Neotonus will probably have zero operating profits this year, but expects $13 million in 1999, he said in the presentation. An audience member flipped through his schedule. The company plans an initial public offering in about 15 months, Morris said. Somebody stretched. Morris's face turned red from the gentle grilling he received from Diversified Portfolio Strategies President William Galle, before a conference official stepped in to say that the company was out of time. But appearances weren't what they seemed. Galle said afterward that he liked Neotonus's concept and he was heard talking to company representatives about contact information. So, a reporter asked Morris, was the trip from the Peach State worth it? "There's no way to know," he replied. "We didn't come up with any preconceived notions . . . Maybe someone here knows a friend of a friend's brother-in-law who might be able to help us in some way," he said. "I wasn't expecting people to bring their checkbook with them today." As for Galle, at mid-afternoon he already had two hot prospects. He had liked SpaceWorks as well. "I think they are going to be forces to be reckoned with in their respective markets," he said of the two companies. Which was his favorite? He'll never tell. But he will be contacting "industry sources" to further examine them both. So maybe yesterday was a win for two of the little guys. Galle represents potentially big money. He was at the conference identifying potential financing candidates for his clients, which include IBM.
© Copyright 1998 The Washington Post Company |
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