Southern California will be a venture capital force.

While Southern California has traditionally lagged behind other areas of the country in terms of attracting venture capital investments, there is much call for optimism that Southern California is finally coming into its own as a venture capital center.

On the face of it, past investment statistics do not paint a rosy picture for Southern California. During 1996, Northern California led venture investing, raising $2.4 billion in 561 deals. Massachusetts followed with 308 financings for almost $1.1 billion.

By comparison, companies in Southern California, a significantly larger, more-populated area, raised $850 million in 175 financings.

In addition, of the $40 billion in venture capital under professional management in the United States, the majority is controlled by the 120-plus resident venture capitalist firms in Northern California. There are more than 35 venture capital firms in Massachusetts. Southern California is fortunate to have resident venture capital funds such as Kline Hawkes, Media Technology Ventures and Brentwood Venture Capital, but still lags behind, with fewer than 10 active funds in the area.

All of the above indeed presents a grim picture, but it's not the entire picture.

The Internet is shaping communications, and computing convergence is making it possible to deliver dynamic and personalized information immediately. The entertainment industry will play a major role in supplying content such as data, video, audio and graphics.

Recent investments in companies such as City Search and Cloud 9 Interactive show the growing importance of content and an increased understanding of its value. By all indication, this is not an anomaly but a long-awaited wave of investments that the media and entertainment industries have been anticipating.

Successful venture-backed IPOs over the past couple of years have helped to build the infrastructure of labor talent. Companies such as Xylan, ACT Networks, MetaCreations and Xircom will contribute to developing the managers needed to start and help develop credible, investment-worthy new companies in the future. This is evident with the recent creation and funding of companies such as Accelerated Networks in Westlake Village.

The demise of the Cold War and subsequent consolidation of the nation's aerospace and defense industries in Southern California has released talented and experienced engineers into the community. These technologists are skilled in handling the burgeoning multimedia marketplace and further contribute to the development of a recognized, talented pool of high-technology managers in the Southern California area.

Seven Southern California-based research universities are producing technically sophisticated and creative new entrepreneurs helping to fuel the growth.

The velocity in Southern California IPOs over recent years has created wealth among young entrepreneurs that will branch out and fuel the momentum by mentoring and funding start-ups. Local support will attract more venture capitalists to invest, then reside, in Southern California.

Local, sophisticated incubators such as EC2 - The Annenberg Incubator Project and Idea Labs, which are funded by local businesses and supported by local higher-educational institutions, are providing much needed networks for entrepreneurs.

Yes, the future does look bright for Southern California, but it is important to take advantage of this evolution - the merging of telecommunications, computing, software, entertainment, publishing and consumer electronics, and the expansion of the talent pool to build needed momentum.

In today's marketplace, emerging companies face numerous challenges, such as intense competition for knowledge workers, the pressure to go international as quickly as possible and the need to make significant investments in research and development to keep pace with the ever-shortening product life cycles.

In order to keep new products and services in the pipeline, these companies have few options other than venture capital to fund the first few years of operations.

Nurturing from local, successful industry leaders with experience and business savvy plus access to regional funding sources is necessary. Unfortunately, the successful industry leaders can not be produced without developing a plethora of successful venture-backed start-ups that spawn talented and proven management teams. Thus, the vicious cycle.

It's the responsibility of the local industry leaders and resident venture capitalists - in conjunction with local service providers such as accountants, attorneys and entrepreneurial organizations such as the MIT Forum - to invest money, time and wisdom to nurture our local entrepreneurs.

With their help we can break through these cycles, build on the momentum we've been generating recently, and firmly establish Southern California as a major center for venture-backed entrepreneurial activity.

Massoud Entekhabi is managing partner of the high-tech team at Coopers & Lybrand.