Originally created 09/26/96

Business for firm is capital



AIKEN - Start-up companies won't have much success squeezing money out of newly formed Charles Towne Ventures.

But existing firms in need of growth capital could score as Charles Towne settles in the Aiken-Augusta area, Jim Griffin, vice president of Lepercq Capital Management Inc., told a venture capital symposium Wednesday.

"You don't have to be profitable, and you don't have to have been in it for a long time, but you have to prove to us you're in a high-growth market," he said. "We're equity investors, but we're also typically taking a risk. We're not your rich aunt - we expect performance."

Lepercq, a New York-based venture capitalist firm, recently teamed up with Magnolia Capital Strategies Inc. of Charleston to form Charles Towne. The venture capital fund, which is expected to raise at least $15 million, was assisted by a $2 million federal grant through the Savannah River Regional Diversification Initiative.

The idea behind the fund is to create financing for struggling local companies that don't qualify for bank loans. By investing in a company, the venture capitalist becomes a stockholder for a limited period.

And by teaming up with Charles Towne, SRRDI hopes to create new jobs in an area hard-hit by Savannah River Site downsizing. Some 9,000 jobs have been lost at the plant near Aiken since the federal government began to scale back its nuclear weapons program after the Cold War.

Charles Towne has already received preliminary proposals from several environmental technology firms in the five-county, two-state region SRRDI serves, Mr. Griffin said.

Thomas Widmer, president of Thermo Technology Ventures Inc., had some advice for companies that do business with people like himself.

"If you're an entrepreneur, you really want to make your investors your partners and keep them informed, especially when there's bad news," he said. "Be conservative in managing your expectations: Surprises are not well-received. And raise more money than you think you're going to need.

"A typical failing we see many times with (new) companies is that they make a lot of money quickly and think they're rich, then they start acting like that. That's not good, because you're going to need the money down the line."

Between the grants SRRDI provides local start-up companies, the venture capital money, and technology spin-off opportunities from SRS, an entrepreneur willing to invest in the Aiken-Augusta area has a rather attractive package, SRRDI Executive Director Lewis Attardo said.

The counties surrounding SRS lag behind nearby regions in economic development because of their 50-year reliance on SRS, Mr. Griffin said.

"But they seem to be in the process of catching up quickly," he added.

Some 35 business owners and economic development leaders attended the Aiken symposium.