By Andrew Eder
Thursday, September 17, 2007

This year’s Tennessee Valley Venture Forum will bring the usual institutional investors to town, and organizers hope some homegrown millionaires will find their way to the Knoxville Convention Center, too.

The annual event offers an opportunity for young technology companies to pitch their business plans to investors. This year’s forum, which is Sept. 26-27, is the first to divide early-stage companies and growth-stage companies into two separate days.

The regional venture capitalists in town for the event will likely view the more mature companies — which include Knoxville companies Protein Discovery and The Aldis Group — as better investment opportunities.

Six of the eight early-stage companies selected to present at the event are in East Tennessee — five in Knoxville and one in Athens. The strong local presence probably reflects some hometown bias, but also a thirst for startup “angel” funding among local companies in their infancy.

“Most of our clients still aren’t ready for venture capital,” said Tom Rogers, president and CEO of business incubator Technology 2020, which hosts the forum. “They need some seed capital. Ideally, it would be accompanied by some experience.”

Chris Van Beke of Tennetic Ventures, which aims to find funding for young firms, works with three of the early-stage companies scheduled to offer presentations at the forum: SunsOil, a biodiesel producer in Athens; Modern Sprocket, a Knoxville company developing a solution to accessing Internet content through the television; and Voices Heard Media, an Internet company started by former University of Tennessee football player Will Overstreet that aims to foster interaction between sports personalities and fans.

Another Van Beke client (and former venture forum presenter), Oak Ridge solar-lighting firm Sunlight Direct, recently raised about $800,000 in angel funding, but Van Beke said most of that money came from California investors.

Van Beke said the two-day format is an important change to help spur individual angel investors to attend the forum and learn more about the young companies in their backyard.

“We are still a nascent entrepreneurial community, and therefore we’re going to have nascent companies,” Van Beke said.

Rogers said he and other venture forum organizers have been working to encourage potential angels to attend the event, which has struggled to attract individual investors in past years.

“If there are individuals in the region that are interested in making early-stage investments, this is a great opportunity,” Rogers said.

To be sure, angel investing happens here, but it’s unsystematic and often quiet. Rogers and others are hopeful that the Knoxville area can develop an organized angel investor network like ones in Nashville, Atlanta, Lexington, Asheville and even Chattanooga.

Such a development can’t come soon enough for the local young companies who think they have the Next Big Thing.

“When you have clients who are seeking capital,” Van Beke said, “it’s never fast enough.”

© 2007, Knoxville News Sentinel Co