Who Wants To Be A Millionaire?

Hanging with the money crowd at the Florida Venture Capital Conference.

THE ROOM IS DARK EXCEPT FOR A SOLE SPOTLIGHT ON A wide stage. Philip Ruggieri is standing calmly in front of about 300 people, any one of whom could, with a single check, change the course of his company and his life.

Clicking through PowerPoint slides, Ruggieri exudes the confidence of a winning high school football coach. His pond is small, but he's a pretty big fish in it. His 20-employee company, West Palm Beach-based IntelliSwitch, is doing fine and, despite the market meltdown, somebody here will give him the cash he needs to move forward.

Sitting in the audience, Carlos Romero is quietly going nuts.

Romero, 35, is Ruggieri's adviser from Deutsche Banc Alex. Brown. He's a kind of special teams coach, helping Ruggieri connect to people with money to invest. Romero perches in the front row to give his client moral support, but it's obvious he's heard this pitch a million times. He takes notes rapidly in the near dark, but his mind is on the hallway outside. Deals are being done, and he's in here. Torture.

Ruggieri wraps up, and Romero shake his hand and offers warm words of encouragement. We bolt for the hallway.

"What I'm hoping is that they get hit by the money truck," says Romero, roaming the hallways as bankers and investors do their mating dance in the luxurious caverns of the Boca Raton Resort & Club. "That way, when they cash out of the company, they'll come to me for money management."

Romero stops to check his e-mail at a terminal in the main exhibit area and takes a moment to peruse one of the many Web sites dedicated to financial world chatter. "I got no sleep last night," he laments, eyeballs glued to the screen as rumors and bits of stories clipped from the financial press scroll by. "You're on your feet for 14 hours, talking, talking, talking."

The Florida Venture Capital Conference, begun in 1984, is the granddaddy of Florida's venture capital affairs. Its first presenter that year, William Dambrackas, was in attendance, looking to sow some of the gains from the recent sale of his Sunrise, Florida-based company, Equinox Systems, back into new ventures. "It's a record crowd," he says. Never mind what you hear about dot-bombs, money is moving toward tech just the same, and perhaps in a healthier way.

Just the facts. Investors, says Dambrackas, got burned by the dot-com run-up, but that's mostly their fault. Venture capitalists should be more like Dragnet's Sgt. Joe Friday: cold, dry and after the facts, and just the facts, ma'am. Apparently, Dambrackas says, tech investors are trying hard, with some success these days, to contain their enthusiasm. "It's back to more boring stuff, but real stuff," he says.

Notably absent from the busy hallways: Latin American dot-coms. Instead, companies and start-ups were telling stories mostly about efficiency or lower cost. One firm, Terion, plans to give trucking a high-tech nervous system with satellite communications and "smart trucks" that know how full they are and update central computers on the fly. Another company is pitching a computer server, about the size and width of a magazine, that boasts a low failure rate and cheap replacement cost. "It was unbelievable," says Romero, referring to last year's dot-com rush. "Everything was online, online, online. Now it's phwit!" He makes a motion as if slitting his own throat.

Jester Digital, a maker of 3D virtual rooms on the Internet for the likes of rock band Metallica, is the closest thing to a real dot-com. Chief Technical Officer Scooter Willis is happy to show off a wide screen TV with realistic game images of skateboarders that can be controlled by fans from their PCs. The next day, Jester Digital would be on the covers of the local papers' business sections, in part because nearly every other company's product was square, metal or still on the drawing board. Buzz matters, perhaps now more than ever. "Reporters have priority, unless you're writing a check," jokes Willis to a colleague.

In the pitch room, one exhibitor is explaining his Web site, a suite of office services run over the Internet. The young CEO ends his informal speech by telling everyone who wants a copy of the presentation to check under their chairs. Simultaneously, 300 people duck and reach, and the resulting collective rip of Velcro provokes a rippling laugh from the crowd. Someone--probably the CEO himself--had stuck CD-ROM disks of the presentation under every single seat.

Brilliant, but will this one fly? Romero shakes his head firmly. "No, but if he can get a CRM [customer relationship management] standard built around this ... shoom!" he says, pointing skyward. People come and go during the talk, and Romero keeps his eye on the door. "Come on, we gotta go," he whispers, and we're off, down the hall again.

Food chain. Soon we begin to rub shoulders with consultants. "These guys are the group I call the arms merchants," Romero says with a laugh. "They go in and tell the companies, 'You know what you need? You need these IBM servers." Next on the food chain are the brokers, the Wall Streeters who told start-ups to make revenues, but forgot--it seems--to mention profitability. It had to come crashing down sooner or later, says Romero. Simple physics. "They didn't build companies. Then, if the economy goes a little bit sour, things slow down," Romero explains. "The guys at the top see the writing on the wall and bolt." Not that everyone lost, mind you. "I have a friend who built up a company and sold it for $125 million--cash," Romero says, rolling his eyes.

We stop for a moment while Romero introduces a prospective client to a banker. A conversation ensues, and Romero slips away to play honeybee to some other lonely blossoms. "I introduced them. They're talking. Boom, boom, boom," he says. "That's what I do."

As the exhibitors pack up, Romero chats with Ruggieri again, making plans for future contact and an upcoming European road show. Ruggieri's company has a wildly entertaining presentation, complete with a techno-music soundtrack and computerized images of the product spinning and dancing like an extra in The Matrix. But it's pretty much a telephone switching device built to take advantage of the Internet. Not that sexy, but maybe a good business.

No dot-com. Still, it's been hard digging out. "The reaction we got [from investors] was 'Why should we believe you?"' says Ruggieri. "Our challenge was to convince people we aren't a dot-com." Ruggieri's goal is to raise US$10 million in 90 days, in part to fund expansion into Latin American markets.

Minutes after lunch, the display booths are halfway disassembled and most of the money men, and money hopefuls, have handed off valet tickets and are waiting, blinking in the strong sun of a Florida winter, as a line of prestige cars churns through the hotel breezeway. Romero reappears and shakes hands all around before heading back to Palm Beach, surely to begin rounds of follow-up phone calls. A matchmaker's work is never done.

                   Private Equity and Venture Capital
                 Investments in Latin American Internet
                       1999    2000
                       $701M  $2,577M
Incubator/Accelerator   --      $338M
Logistics/Services      --      $281M
B2B                      $6M    $362M
Infrastructure         $161M    $377M
Auction                 $31M     $82M
e-Finance               $86M    $220M
B2C                     $90M    $338M
ISP                    $100M    $275M
Portals                $227M    $304M
SOURCE: Bain & Company Research.
Note: Table made from bar graph