Venture Capital Fund for Technology Companies Announced

Friday, January 25, 2002

By Ethan C. Nobles
The Morning News/NWAonline.net

FAYETTEVILLE -- The Alpha Fund, a pool of venture capital reserved for technology companies, was announced on Thursday morning at the Arkansas Technology Transfer Society annual meeting in Fayetteville.

Ron Goforth, president of Beta-Rubicon Inc. in Fayetteville, said he's encouraged to see the development of the fund because it's targeted to startup companies. Prior to the Alpha Fund, Goforth said there had been no venture capital pools for startup companies.

"I think it's terrific," he said. "We've never had this before." The Alpha Fund will hold between $2 million and $5 million and will make investments between $50,000 and $500,000 to technology firms that are getting started in business, a press release states. David Lewis and John Nock, investment bankers with Fayetteville's American Municipal Securities, will sponsor and help manage the fund.

Under the terms of the fund, Beta-Rubicon will be in charge of evaluating new technology to determine the commercial potential of those inventions or processes.

The fund managers will also help companies financed by the Alpha Fund secure federal money from programs such as the Small Business Innovation Research program, the press release states. That particular federal program currently provides more than $1 billion a year to "fund high risk, high potential commercial technology development," the press release states.

Fayetteville's Virtual Incubation Corporation, headed up by Goforth's son, Calvin, will provide business planning and management services for companies in which the Alpha Fund invests.

In addition to private inventions, Calvin Goforth pointed out that the fund managers will strive to commercialize new technology developed at the University of Arkansas. He said the fund "fills in the gap" left by the three other venture capital pools in Arkansas that focus on technology companies -- Diamond State Ventures and Arkansas Ventures, both based in Little Rock, and Signal Hill, which is forming. Unlike those three current or forming pools, he said Alpha Fund will look solely at newly-developed firms.

Ron Goforth said venture capital is needed for developing technology companies in Arkansas, claiming those "knowledge-based" companies rarely have enough collateral to convince banks to float them loans.

"They've got to have capital to grow," he said.