Techs seek venture capital

Lawrence,KS (01-23-2001)

From Lawrence Journal World
By Mark Fagan

Lawrence Technology Assn. members asked to join lobbying effort

ITTC, through its director Victor Frost and its executive director for
applied technology, Tim Johnson, was a founding member of the Lawrence
Technology Association, which held its first official meeting on Jan.
22. Former ITTC staff member Scott Woodward, now an owner of Athenix
Solutions, and Marc Epard, with Netopia and a member of ITTC's Industry
Advisory Board, also helped to found the organization. Frost, Johnson, Woodward and Epard all serve on LTA'S Executive Board.

The biggest barrier facing Lawrence's growing high-tech entrepreneurs isn't a lack of qualified employees, adequate office space or intense competition.

It's money.

"Capital oftentimes becomes the biggest obstacle," said Rich Bendis, president and chief executive officer of Kansas Technology Enterprise Corp. in Topeka.

Bendis came to Lawrence on Monday to encourage and empower about 85 people attending the first meeting of the Lawrence Technology Assn., formed to foster growth and success for tech-oriented business and industry in the Lawrence area.

KTEC plans to lobby Kansas legislators on a bill that would create state tax credits for investing in certified venture-capital funds, Bendis said. The bill likely will seek credits of 50 percent. A version seeking 100 percent last year cleared the House but stalled in the Senate.

The Kansas City region, which includes Lawrence, lags up to 50 percent behind many areas of the country in availability of such financing, Bendis said. The tax credits could be expected to generate up to $50 million a year from private sources, which then would be pumped into companies with less than $1 million in revenues and fewer than 50 employees.

He asked association members to contact their legislators.

"We're going to need some help," Bendis said.

His message met a receptive audience during the luncheon.

Listening intently was Rob Harrington, whose DataTeam Services Corp. is among those on the hunt for venture capital.

Powered by an initial investment of more than $500,000 from a handful of area investors, the Lawrence start-up created software that runs electronic-procurement systems for school districts and other organizations. Now it's hungry for more.

The firm's software can route purchase orders for books directly from a teacher to the principal, to the superintendent, and then ahead to a supplier with a few clicks of a computer mouse.

Locating additional finances for business expansion is considerably more complicated. DataTeam Services needs another $3 million to $5 million, he said, but sometimes it's hard getting noticed on the East and West coasts.

"But the more businesses that can be successful and raise money in our area, we'll draw more attention from venture-capital firms from outside our area," he said.

That's part of the reason representatives from high-tech firms in Lawrence Bob LaGarde, of LaGarde Inc.; Marc Ephard, of Netopia; and Bennett Griffin, of Griffin Technologies LLC organized formation of the technology association. The group plans to conduct bimonthly meetings and provide networking and educational opportunities for its members.

For more information, contact ITTC.

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