A Dec. 4 Business article incorrectly identified an investor in Optinel Systems Inc. The name of the venture capital firm is OCG Ventures, not OCG Group. (Published 12/6/02)

When Sandeep T. Vohra raised his last round of venture capital two years ago, $8 million in cash for his brand-new company, Optinel Systems Inc., it only took a couple of months. Raising a second round of funding, however, was a decidedly different experience.

"I lost more hair doing this than I did raising children," said Vohra, Optinel's president.

After eight months of searching for funding, Optinel plans to announce today the close of a $22.4 million round of venture capital from a group of new and previous investors. The round should fully fund the company's business plan as it ramps up sales of its optical-networking hardware.

When he started out, Vohra was well aware the investing climate had drastically changed. Venture capital activity in the Washington area peaked in spring of 2000. That fall, when Optinel was founded, venture firms were investing at a furious pace. Deals were taking as little as 90 days to close. Now investors are more deliberate about their spending.

"Meetings take longer and [venture capitalists] are looking at fewer deals," said Optinel chief executive Jim Faust. "Nothing is happening as fast it was three years ago."

The money will be used to expand Optinel's workforce, mostly in sales, marketing and technical support, which will boost the company's total employment to about 50 by early next year. The company has already begun field trials with cable companies that are looking to increase network capacity for such products as video on demand and high-speed Internet capability.

With the help of OCG Group, a Columbia-based investor in the company's first round, Optinel added seven venture firms to its stable of investors, which included Novak Biddle Venture Partners of Bethesda. Having more investors also means more advice.

"I always think a strong board with lots of smart people is better than one smart person, in terms of giving guidance," said Stephanie Rogers, a partner with OCG. "I found it very valuable to be able to work with new investors."

Faust and Vohra said this round should be the last. "Our plan is absolutely to avoid this ordeal," said Faust.