A column in yesterday's Business section incorrectly reported how much Phil Gross has invested in the electronic commerce company iKimbo. Gross has given iKimbo a $10,000 bridge loan. (Published 10/15/1999)
Jamey Harvey got his latest idea from a venture-capital deal that didn't happen.
Venture capitalists--in general, and certainly in Washington--still shy away from companies that create content. Especially Internet game companies.
Harvey had been shopping his gaming company, Digital Addiction, around to venture capitalists. He found they all had one thing in common: Solomon-like, they suggested he split his baby in two, separating the games part from other Internet projects.
So last week, at Harvey's urging, the board of Digital Addiction agreed to create iKimbo, an e-commerce company that seeks to develop online communities.
The original company, Digital Addiction, will remain for now in its space in the Phase 1 incubator of Laurel. And iKimbo has moved into the Wheaton basement of one of the company's programmers, sharing space with five cats. Harvey has given up the top job at Digital Addiction to become iKimbo's chief executive.
Reston venture firm Draper Atlantic was working with Harvey and got close enough to say it would invest if he divided the firm. But as Harvey was going through the process, Draper pulled out.
Harvey continued anyway, seeing that the singular focus of the game company was holding back the online community project. "It was as if we invented the wheel, and we could only think of Ferris wheels," he says.
He self-analyzes, "It's a typical mistake for a first-time CEO to do too many things at once."
A spring launch is planned for iKimbo, which is trying to claim a bit of the space already filled by many companies trying to build virtual communities. The idea is to have multitudes of sites where groups as small as a local soccer team or large as Pontiac fanatics would have a place to share information and buy products.
Harvey is hoping to make money in an eBay-style; iKimbo will take percentages from consumers' auction sales and from those made by vendors who sign up with the sites. Community members would get group discounts for purchases. For example, a site focused on small business could arrange to have 100 Palm organizers sold for a discount if all were bought.
The company's technology will let people drag pictures of something they'd like to sell--a boat, say--from their desktop directly onto a site.
Harvey is back out shopping for capital. He's got a little under a million to get iKimbo started, all from Phil Gross, an "angel" investor and former America Online Inc. executive.
Speaking of Laurel's Phase 1: It's about to become an empty nest for Doug Humphrey and Lisa Losito.
Two years ago, the former Digexers--husband and wife--founded the high-tech hothouse, where start-up tech companies were nurtured and advised in exchange for an equity stake.
The plan all along was for everyone to move out into the real world in two years. And it looks as though, come December, the first group will have all graduated, in some sense, although most of the awkward transitional periods are going on right now. Losito says they haven't had to kick anyone out. "They seem to be figuring out what to do themselves," she says.
As noted above, Digital Addiction will stay while its split into two companies is finalized, but it will be out by the end of the year, Losito says. A company called iAtlas, which makes a search engine, has been sold to a large, publicly held firm. The Sync, which produces and Webcasts shows such as "Snack Boy" and "Geeks in Space," seems close to some kind of deal, possibly an acquisition. "They've had a lot of interesting discussions going on," Losito says.
Privacy-software company Loligo will get an extension. The company has been officially on hiatus as its chief executive has been busy in his day job. "He got a spectacular offer in California," says Losito. She expects him back this winter: "We're keeping his room warm."
Humphrey and Losito have been meeting with other companies to move into Phase 1 and are discussing whether to look for a larger building.
Regardless, it won't be a complete empty nest. The couple are expecting their first child this spring.
C. Everett Koop got tech religion. So did Lou Dobbs. And Bob Dole has joined the board of Vienna-based Internet access provider OneMain.com. So it only makes sense that other veterans of the political and media worlds are looking in on the excitement and potential rewards of technology start-ups.
Now we hear from Silicon Valley venture capitalists that Newt Gingrich has been on a tour of West Coast tech firms. It's unclear what may come of the visits: Gingrich could be considering advising or joining a board, or he may just be out to learn more about the new economy.
The fact-finding mission should help the former speaker of the House in one of his newest endeavors, creation of the Gingrich Group in Atlanta, a corporate consulting firm.
Gingrich spokesman Michael Shields reminded us that Gingrich is a "visionary-type thinker" and that he became a visiting fellow at the Hoover Institute this summer to study technology and society.
"He wants to learn how things are done in Silicon Valley," says Shields. And now that he's a private citizen, he's free to get into business deals. "It's one of the wonderful things about not being speaker anymore," says Shields.
Gingrich has recently visited the offices of health care Web site Healtheon; Kana.com, which produces customer service software; Web page builder Homestead.com; and Everdream.com, which provides computer support to small businesses.
Less than a year after putting down Washington roots, Draper Atlantic, the East Coast franchise of the Silicon Valley venture firm Draper Fisher Jurvetson, has become one of the best-capitalized early-stage funds in the area.
Draper has now "closed" its first fund, meaning it is no longer accepting investments from university endowments, insurance companies and individuals. It's got $70 million to invest, and has already funded six Washington-area companies, two in North Carolina and one in Boston.
There's no shortage of big ideas. John Backus, managing partner of Draper Atlantic, says several hundred business plans flood into his Reston office every month.
Send tips and tales of the digital capital's local people, deals and events to Shannon Henry at email@example.com.
CAPTION: IKimbo's team, from left: Eric Wimer, president; Jamey Harvey, CEO; Rob Deker, project coordinator; and Andy Fregly, chief technology officer.