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The Inc. Network

Reader-to-reader advice.

State Capital
I'm looking for venture-capital firms that invest specifically in companies relocating to their region. What's available, on either a state or a local level? How do I get in touch?

Rod Davis

President

Boca Raton Medical Wellness Center

Boca Raton, Fla.

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Venture capitalists do specialize in industries, hoping to gain a competitive advantage when scouting for new investment opportunities. But focusing on relocating companies isn't a popular niche. Such businesses tend to be somewhat mature, so they're already beyond the early high-risk/high-reward stage that appeals to most of the VC crowd, says Bill Wetzel, director of the Center for Venture Research at the University of New Hampshire, in Durham.

Recently, however, some venture capitalists have begun focusing on regional start-ups, preferring those within a few hours' drive. For example, Tom Smith's Edison Venture Fund, in Lawrenceville, N.J., zeros in on investments in the Mid-Atlantic region. Smith likes local companies because investors can spend more time with them. And Edison's area contacts keep it abreast of new investment opportunities. The Woodlands Venture Partners, in the Woodlands, Tex., and Primus Venture Partners, in Cleveland, invest locally. For names of other regional venture-capital networks, see "Matchmaking by Computer," Banking & Capital, October 1991, [Article link].

After three years of exploring financing options and eventually securing funds through government grants, venture-capital groups, and a public offering, Paul Frison, CEO of LifeCell, a Houston biotechnology company, concludes that local venture funding is generally the easiest to get. "They can come by and kick the tires," he says.

For an overview of the entire U.S. venture-capital community, study Pratt's Guide to Venture Capital Sources (SDC Publishing, available in libraries). You'll find some 800 firms listed by state; each entry includes contact names, affiliated funds, investment preferences, and endowment. The book also contains financing guidelines and tips on choosing and approaching fund managers. Pratt's and other venture-capital listings are available on diskette, so see "Venture Directories on Diskette," Banking & Capital, January 1992, [Article link], for three more sources.

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Carded in Canada
We're frustrated because we can't cater to our Canadian customers, so we hope that setting up a merchant credit account will make it easier for them to buy our products. Can you set up such an account directly with a Canadian bank? Is that a wise move?

Sid Schwartz

Sales Manager

American Sports Marketing

Goldsboro, Pa.

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Answer number one: Sure you can. The best way to locate branches convenient to your Canadian business associates is to call the Canadian Imperial Bank of Commerce at 416-784-7288.

Answer number two: Maybe. If you go that route, you'll have to open a new account with a Canadian bank, and finding one with the right mix of services will take some effort. Assuming you find a decent match, you'll still be dealing with bankers who aren't familiar with your company's track record and its changing fiscal needs. That's why Dale Kicker, CEO of Bending Branches, a Minneapolis hockey-stick maker, decided that setting up an account with a Canadian bank wasn't a wise move.

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