L.A. venture funding way down in second quarter.Venture capitalists Venture Capitalist An investor who provides capital to either start-up ventures or support small companies who wish to expand but do not have access to public funding. Notes: Venture capitalists usually expect higher returns for the additional risks taken. , still smitten smit·ten v. A past participle of smite. smitten Verb a past participle of smite Adjective deeply affected by love (for) Adj. 1. with the struggling telecom business, continue to invest in L.A. companies developing wireless services and Internet-related products, even as the level of dealmaking declined. VCs poured $142 million into 15 L.A. companies during the second quarter, according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. venture tracking firm Growthink Inc. Seven in the broadly defined "connectivity" sector raised $74.5 million. The level of activity represents a steep falloff fall·off n. A reduction or decrease: a falloff in car sales. Noun 1. falloff - a noticeable deterioration in performance or quality; "the team went into a slump"; "a gradual slack in from the first quarter, when $266.2 million was invested in 25 companies. First quarter activity represented a 61 percent gain over the previous period. Nationwide, second-quarter deals averaged $10.8 million, according to Growthink, which surveyed more than 600 companies. Los Angeles' average was slightly lower, at $8.6 million. "The decline in L.A. is consistent with the decline experienced by most cities nationwide," says Corey Lavinsky, director of market research at Growthink. "Los Angeles Los Angeles (lôs ăn`jələs, lŏs, ăn`jəlēz'), city (1990 pop. 3,485,398), seat of Los Angeles co., S Calif.; inc. 1850. received minimal funding because it is not home to many health care-related companies." Southern California Southern California, also colloquially known as SoCal, is the southern portion of the U.S. state of California. Centered on the cities of Los Angeles and San Diego, Southern California is home to nearly 24 million people and is the nation's second most populated region, , including Los Angeles, San Diego San Diego (săn dēā`gō), city (1990 pop. 1,110,549), seat of San Diego co., S Calif., on San Diego Bay; inc. 1850. San Diego includes the unincorporated communities of La Jolla and Spring Valley. Coronado is across the bay. , Orange and Santa Barbara Santa Barbara (săn'tə bär`brə, –bərə), city (1990 pop. 85,571), seat of Santa Barbara co., S Calif., on the Pacific Ocean; inc. 1850. counties, attracted $614.2 million in VC money for the second quarter, the fifth-ranked region nationally. Biotech-heavy San Diego received $264.9 million. The relative strength of connectivity, which includes networking, semiconductors and wireless firms, reflects the narrow perspective of VCs, according to Victor Hwang, chief operating officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. of L.A. technology thinic tank Larta. "In addition to investment capacity, VCs require specialization and expertise. It will take a while to shift knowledge away from telecom," Hwang said. "As an industry, there is a herd mentality Herd mentality describes how people are influenced by their peers to adopt certain behaviors, follow trends, and/or purchase items. Examples of the herd mentality include the early adopters of high technology products such as cell phones and iPods, as well as stock market trends, . A lot of new technologies still have not been adopted, so there is an upside." Performance counts Of the 15 deals for which values were reported, the largest was the $24 million second round received by Inphi Corp., a Westlake Village firm developing electro-optical components for telecom industries. "VCs are definitely being more selective," said Tim Semones, its chief financial officer. "It took us six months to raise the money, in 2000 it would have taken us six weeks." Brad Jones This article is about the racing driver. For the football goalkeeper, see Bradley Jones. Bradley Jones also known as Brad (born 2 April 1960) is an Australian racing driver formerly competing in the V8 Supercars. , general partner at Redpoint Ventures, said, "There has to be a unique technology that clearly provides a competitive advantage, otherwise it is impossible to get funding in this marketplace." Jones' Brentwood Venture Capital was among the firms that invested in supply-chain software company Apriso. Based in Long Beach, Apriso received $14 million in a second round. "VCs are looking for Looking for In the context of general equities, this describing a buy interest in which a dealer is asked to offer stock, often involving a capital commitment. Antithesis of in touch with. more seasoned entrepreneurs," said Eric Pulier Eric Pulier is a serial entrepreneur, primarily in technology and media related ventures. He is perhaps best known in Southern California for Digital Evolution, a company that became one of the best known Internet companies in the region in the late 1990s before merging it's , chief executive of Santa Monica-based Digital Evolution, beneficiary of a $15 million round led by Paladin Paladin archetypal gunman who leaves a calling card. [TV: Have Gun, Will Travel in Terrace, I, 341] See : Wild West Capital Partners Fund. Digital Evolution, which develops secure Web-based management software, is the latest incarnation of a firm Pulier founded as a Web development company in 1993. "As companies become more enterprising en·ter·pris·ing adj. Showing initiative and willingness to undertake new projects: The enterprising children opened a lemonade stand. , the gaps in security become more significant," Pulier said. "That's why a Web services (1) Loosely, any online service delivered over the Web. Such usage appears in articles from non-technical sources, but not in IT-oriented publications, because definition #2 below describes the correct use of the term. company (like Digital Evolution) would get funding in a down market." Market uncertainty played a factor in the amount of money young firms were able to raise. Companies "that can get more are asking for more than you've seen in the past," says Semones. "Because there is so much uncertainty about when the market is going to tick back up." Some speculate the next round of VC funding in Los Angeles will lean towards defense-related companies. "There are a lot of defense companies that have remade re·made v. Past tense and past participle of remake. themselves, that don't get talked about," said George Pavlov, general partner at Tallwood Venture Capital, which participated in the funding of Inphi. Only one Los Angeles company, Ceres Inc. fell under the broad bio-tech banner. The Malibu-based company, works with genes that improve seed size and yield and are which are more resistant to herbicides and pesticides, received an unspecified amount from Monsanto Co. and Questmark Partners. "Here, it's the heart of the entertainment and media industry," said Lavinsky. "When business-to-consumer related companies, streaming video A one-way video transmission over a data network. It is widely used on the Web as well as company networks to play video clips and video broadcasts. Computers in home networks stream video to digital media hubs connected to a home theater. and other media technologies were hot, LA was doing quite well. But right now, San Diego, New England New England, name applied to the region comprising six states of the NE United States—Maine, New Hampshire, Vermont, Massachusetts, Rhode Island, and Connecticut. The region is thought to have been so named by Capt. and other areas with health and pharmaceutical companies have received more funding than L.A."
Fifteen Get Funding
The majority of venture capital once again went to wireless services and
Internet companies.
Firm/City Description
Inphi, Westlake Village Optical communications
Fulcrum Microsystems, Semiconductors for high-speed
Calabasas Hills wireless.
Aspen Education Group, Cerritos Educational programs
Digital Evolution, Santa Monica Secure Web services software
Apriso, Long Beach Supply chain software
Sierra Monolithics, Redondo Beach Integrated circuits for
communications
Intertainer, Culver City On-demand entertainment
SageMetrics, North Hollywood Online and offline data integration
Sabeus Photonics, Chatsworth Optical components
Motia, Pasadena Wireless systems
ProcessClaims, Redondo Beach Internet-based claims
processing
OptiNetrics, Torrance Optic components
GTRAN Wireless, Westlake Village Products for wireless
Internet applications
Auxora, Baldwin Park Fiber optics
Affinity, West Hills Fraud prevention services
Funding
Firm/City (in millions)
Inphi, Westlake Village $24
Fulcrum Microsystems, 16
Calabasas Hills
Aspen Education Group, Cerritos 15
Digital Evolution, Santa Monica 15
Apriso, Long Beach 14
Sierra Monolithics, Redondo Beach 13
Intertainer, Culver City 9.5
SageMetrics, North Hollywood 6
Sabeus Photonics, Chatsworth 5
Motia, Pasadena 5
ProcessClaims, Redondo Beach 5
OptiNetrics, Torrance 4.7
GTRAN Wireless, Westlake Village 3.8
Auxora, Baldwin Park 3
Affinity, West Hills 3
Firm/City Investors (partial list)
Inphi, Westlake Village Walden International, Dali Hook
Partners, Tallwood Venture
Capital, Mayfield
Fulcrum Microsystems, Undisclosed investors
Calabasas Hills
Aspen Education Group, Cerritos Warburg Pincus
Digital Evolution, Santa Monica Paladin Capital Partners Fund
Apriso, Long Beach 75 Wall Street Technology Partners,
Dresdner Kleinwort Capital, CMEA
Ventures, LogiSpring, Brentwood
Venture Capital
Sierra Monolithics, Redondo Beach Storm Ventures, U.S. Venture Partners
Intertainer, Culver City Freedomland
SageMetrics, North Hollywood Ascend Venture Group, J.P. Morgan
Partners
Sabeus Photonics, Chatsworth Lexington Ventures
Motia, Pasadena Kodiak Venture Partners, Axiom
Venture Partners, Carrot Capital
ProcessClaims, Redondo Beach Vector Capital, meVC
OptiNetrics, Torrance DynaFund Ventures, Smart Technology
Ventures, Individual Investors
GTRAN Wireless, Westlake Village Redwood Venture Partners, Qualcomm
Auxora, Baldwin Park Rustic Canyon Ventures, Intel
Capital, Individual investors
Affinity, West Hills FBR Technology Venture Partners,
Individual investors
Source: Growthink Inc.
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