VENTURE CAPITAL SCARCE CONFERENCE HIGHLIGHTS DIFFICULTIES IN SEARCHING FOR FUNDS.

Byline: Evan Pondel Staff Writer

BEVERLY HILLS - Venture capital is still available for those companies in need. But a compelling pitch, replete with revenues and a sound business plan, is mandatory.

At a conference here Thursday, venture capitalists agreed the days of haphazard investing are long gone. And if a company is already public and generates a hefty net income, they're a stronger candidate for funding.

``These are the times we're in right now,'' said Greg Yurkovich, a venture capitalist with Forrest Binkley & Brown in Irvine. ``Some of us have even invested in larger companies because it simply averts risk.''

Yurkovich was among a group of venture capitalists and fledgling companies commingling at The Venture Forum 2003 in Beverly Hills. Unlike previous years, the cuff links were left at home and the sleeves were rolled up. Few people wore ties, except for those chief executives who were trying to convince a group of weathered investors to fund their companies.

``I now know within five minutes whether or not a venture capitalist is interested in investing,'' said Nathan Fox, president and chief executive officer of Atomic-Scale Design in Westlake Village.

Fox was wearing a red tie. He was also toting a leather briefcase filled with information about his company.

``I've done this before. I've helped companies in the past. But things are certainly difficult these days,'' he said. ``It's all about not giving up.''

So far, Atomic-Scale has requested $5 million in funding. It is also in search of a chief financial officer and has a projected 2003 revenue of $160,000.

Yurkovich said a company needs to generate revenues before he even considers investing.

Fox isn't surprised.

``Yeah, a lot of venture capitalist want revenues. And that's something we don't have just yet,'' he said.

Northrop Grumman does.

But to draw a comparison between Atomic-Scale and the defense contractor would be unfair, even though ``people thought our industry wasn't going anywhere a decade ago,'' said Albert Myers, corporate vice president of strategy and technology for the Century City-based company.

Myers said a company's success is often measured by how much money people are willing to invest. But that is not necessarily true if a smaller company can formulate a relationship with a larger company.

``There is an important role to be played by these smaller companies, especially as the Department of Defense expects to spend $380 billion next year,'' Myers said.

Capitalizing on that trend is Ascendent Telecommunications.

The Encino-based company manufactures voice communications systems that provide backup during a disaster. Ascendent has found a niche in helping government agencies track down workers in the event of an emergency.

The 4-year-old company has inked deals with the Department of Defense, Nextel, DaimlerChrysler, FedEx, Motorola and Caterpillar.

``We do sell direct, but teaming up with some of these companies is certainly a significant portion of our business,'' said Stephen Forte, Ascendent's chairman and chief executive officer.

Forte defines Ascendent, which barely exceeds 20 employees, as a ``software company'' that is already churning revenue. In 2002, the company did $1.5 million in sales, with projected revenues of $8 million in 2003. Forte said he also expects Ascendent to generate earnings by year's end.

``The biggest obstacle we have right now is time. When something slows us down, we're obviously going to be in need of more time,'' Forte said.

Gregory Akeslrud, a partner with Encino-based law firm Stubbs Alderton & Markiles, understands the importance of time. He provides general counsel for startups that are in need of funding.

``It's among the factors you have to consider when doing business with a company. But I would say good management and having a strong place in the market are far more imperative right now,'' Akeslrud said.