ITFlorida - New fund sees promise in the very young

The first-quarter Money Tree survey by PricewaterhouseCoopers/Venture Economics/National Venture Capital Association found that established companies were collecting their fourth, fifth, even sixth round of venture financing.

But a new fund, set up to invest solely in barely hatched companies, has opened its first office in Gainesville. Inflexion also plans to establish outposts in Orlando, Tampa and Jacksonville in the next few months. The fund hopes to invest in 15 emerging companies in the next three to four years.

Inflexion is headed by four partners with plenty of Silicon Valley experience among them and an eye for the research coming out of Florida's universities.

''We are sitting on a gold mine in Florida if we can harness the capital and talent to turn big ideas into big companies,'' says Dan Rua, the North Florida managing partner for Inflexion.

What's missing, says Rua and Charles Resnick, another partner at Inflexion, are venture capitalists with national company-building experience.

Inflexion will raise its capital from individual investors, but will also reach out to private pension funds and institutional investors.

Rua and Resnick say SEC rules bar them from commenting on exactly how much money Inflexion hopes to raise, since it's being done through a private placement.

Resnick says many of these larger investors are also excited about what they see happening in Florida. But they would prefer to invest along with state-based VC firms.

''They can partner with us,'' Resnick says.

Despite the drop in the technology sector since the Internet blowout in 2000, not all institutional investors have soured on tech stocks. ''The time to buy is when everyone else is selling,'' Resnick says.

Inflexion is associated with Village Ventures, a family of funds designed to invest in specific regions of the country where there is a gap between the amount of intellectual property and the amount of venture capital needed to fund emerging companies.

Village Ventures also represents big-time venture capital. It's backed by Bain Capital, Sandler Capital, Highland Capital and Janus Capital. These four firms have committed a total of $100 million to Village Ventures, which, in turn, does the research to identify regions where they see the greatest potential for venture investment returns.

Why Florida now?

Because there has been a major shift at the university level to assist the technology transfer process. And there's a concerted effort to partner university-based researchers and companies with industry talents and money based in the state, so the investment profit and the economic impact are enjoyed here, says Resnick and other venture capital specialists.

That movement is already evident in several other states such as Georgia, Alabama, Texas, New Jersey and Oklahoma.

As part of its investment strategy, Inflexion likes to take a board seat and work closely with the management of the companies where it invests. ''We like to grow companies. We want to be in constant contact with our companies,'' Rua says.

That's why locating in several cities in the state is crucial.

And while Silicon Valley may still be the center for all things high tech, quality of life isn't one of its best attributes. The region is overcrowded, with massive traffic jams, high-priced real estate and an intense work culture.

Florida is a sweeter investment in the quality of life department, say several of the partners at Inflexion.

For example, Rua moved to Gainesville from Northern Virginia in January with his wife and two daughters.

The partners at Inflexion will be bringing investment know-how as well as industry skills to their Florida investments:

* Rua, a graduate of the University of Florida, was previously based in Reston, Va., where he worked for Draper Atlantic, the east coast fund of Silicon Valley's Draper Fisher Jurvetson. From Gainesville, he'll keep on eye on emerging firms in the North Florida area, including Jacksonville and Tallahassee.

* Resnick has a management background in technology, banking, and consumer goods. Resnick has been in Tampa since 1998. However, in the past three years, he had been commuting to New York City where he had started his own firm. He'll cover South Florida from Tampa.

* James Boyle is an experienced venture investor working with Northern Telecom, Bell Canada and Bell Canada Enterprises for the past 15 years. Coming from Dallas, he'll be based in Orlando and will focus on Central Florida and the Space Coast.

* Carolyn M. Ticknor was president of Hewlett-Packard's imaging and printing systems division, the company's largest division, until early 2001. She has now dedicated herself to technology investment activities. She also sits on the boards of AT&T Wireless, Boise Cascade and Reveo. She will divide her time between Florida and Silicon Valley.

* Michael Barach, Village Ventures' Inflexion partner, has spent nine years working with Bessemer Venture Partners and has start-up experience as CEO of Mothernature.com. He's based in the Cambridge, Mass. area.

NEW DIGS

Citrix Systems has purchased two nine-story office buildings on Cypress Creek Road in Fort Lauderdale. Cost: $55.1 million.

Citrix already occupies space in one of the buildings at Cambridge Executive Center and will be moving employees into the second, which is newly built.

Last month, the company reported a 7.6 percent drop in first-quarter net to $26.7 million, or 14 cents a share, compared with net income of $28.9 million, or 15 cents a share, in the same period a year ago. Revenue rose 7 percent to $142.3 million from $132.8 million.

The stock has edged lower in the past week as some analysts have trimmed their earnings estimates for the company or downgraded the stock.