Articles

November 12, 1997
By Beth Berselli Washington Post Staff Writer

It may sound a bit like Perry Mason meets Walt Disney, but Kenneth J. Lopez thinks his Alexandria company, Animators at Law Inc., is an investor's dream come true.

The 29-year-old lawyer's pitch: His two-year-old company sells the right product -- computer-animated videos that present complex legal material in a compelling way.  It employs the right people -- attorneys and artists with legal expertise.  It targets a specialized audience -- lawyers looking for an affordable, easy-to-use tool in cases ranging from murder to malpractice.

"Computer animation will be to courtrooms of the future what photographs are now," predicted Lopez, a former Justice Department attorney. "Who doesn't like watching movies?"  Alas, all that's stopping Lopez and his partners from realizing their Wall Street dreams is cash -- $4 million, to be exact. The company needs the money to expand its operations; it has more business than it can handle.

Lopez set about finding that money yesterday at the first day of the Mid-Atlantic Venture Fair, a two-day exposition at the Sheraton Premiere at Tysons Corner that brings together entrepreneurs and investors.

He was joined by 95 other companies hoping to score some gold, including 40 from Virginia and 24 from Maryland. They showed off their gadgets and bright ideas to more than 80 venture capital firms from around the country.

The annual fair is a kind of mating ritual between entrepreneurs and investors, but it's conducted in a science fair-type atmosphere instead of a trendy nightclub. There's a lot of schmoozing, a lot of networking and, most important, a lot of salesmanship.

All that can be tiring. "My voice is going to be dead by the end of the day," Lopez said. "It's been nonstop." Nevertheless, he said he's pleased with the results so far. "A guy who just did an IPO for a competitor came by and said, `Hey, I made a lot of money last time, let's do this again,'" Lopez said. "I got his business card."

Companies hawking their goods included high-tech start-ups with barely a business plan and established government contractors that have been in business for a decade or more; CEOs ranged from recent college graduates to telecommunications industry veterans.

"We're seeing more 28-year-old entrepreneurs than ever before," said the event's chairman, Frank A. Adams of Maryland's Grotech Capital Group.

There were companies that sold birth control for termites, online services targeted at women business owners, and electronic hand-held gadgets called "Jerry the Pharmacist" that remind patients when to take their medication. There were companies that run Caribbean-theme restaurants, develop tests to identify prostate cancer cells and allow people to check their e-mail over the phone.

As is usual these days, high-tech companies dominated the day -- 57 of the 95 firms are involved in software, Internet or communications work.

The entrepreneurs share the hope of convincing venture capitalists that they're destined to become the next Yahoo Inc. or UUNet Technologies Inc., a graduate of the fair.

According to organizers, the seven-year-old fair has helped raise more than $1.3 billion for companies in the region.

Of the 95 firms attending, 61 were designated as "presenters," meaning that their executives got to give a 10-minute talk to investors. For the most part, these firms already have received institutional funding, while the remaining companies there were simply "exhibitors" that haven't yet won that kind of backing.

Charles W. Newhall III of New Enterprise Associates, a Baltimore-based venture capital firm, estimated that 60 percent to 70 percent of past presenters received additional funding, and about 15 percent of them eventually went public. The 1995 class of presenters alone raised more than $250 million. Newhall said the robust economy, coupled with a stock market that has been strong so far this year despite recent turbulence, makes this a particularly good time for companies looking for money.

"The venture firms have money," he said. According to Venture Capital Journal, the pool of venture capital in the mid-Atlantic region grew almost four-fold in the last 11 years, from $1.29 billion in 1985 to $4.72 billion last year.

That's music to Ted Hooban's ears. The 26-year-old CEO is looking for $2.5 million in funding for his Arlington company, SuperSonic Boom. The 18-month-old company sells custom-made compact discs over its Internet site.

Another company exhibiting its goods was HT Medical Systems Inc. The 10-year-old Rockville firm says it is expanding its business to make one-of-a-kind virtual reality devices that simulate various types of surgery and thus allow for realistic rehearsal without risk to patients.

"We're trying to create the flight simulator for medicine," said Richard Stacey, vice president of marketing. HT Medical Systems is looking for $3 million to produce the devices' prototypes and get them to market.

The venture capital fair traditionally rotates between Philadelphia and Baltimore. This year marks the first time it has come to Tysons Corner.

Just getting invited is tough, organizers said. It's a "highly selective" process, said Grotech's Adam, with about 600 companies applying this year.