InvestMidwest wants to give more visibility to St. Louis entrepreneurs
David Nicklaus Of the Post-Dispatch Staff

Ginny Saffle works on laser probes in the illuminated cell at SynergeticsSynergetics Inc., a company that will be attending the venture capitalists conference. (Larry Williams/P-D)

LoanSurfer.com needs $10 million to expand its online mortgage business and hire 50 employees.

Synergetics Inc. wants $5 million to make acquisitions that would build on its expertise in making microsurgical instruments.

MetaPhore Pharmaceuticals Inc. of Overland thinks it's close to raising the $15 million it needs to conduct clinical trials on a promising new painkiller.

All three companies, and 17 others, will meet today with about 400 venture capitalists and other investors in the inaugural InvestMidwest Venture Capital Forum.

The conference is being held at the Ritz-Carlton Hotel in Clayton to help the companies raise money and to shine a spotlight on entrepreneurial activity in St. Louis.

Garland Marshall, president of MetaPhore, said he welcomes "anything that makes people on the coasts aware that there are reasons to look at what's going on in the Midwest."

As he has traveled the country trying to raise money, Marshall has learned just how invisible St. Louis is to most venture capitalists. "I can't tell you how many times I've heard, 'If you just move to the West Coast or the East Coast, the money is easy,'" he said. "I have strong feelings about not doing that."

Marshall has seen other entrepreneurs leave town, and his decision to stay hasn't always been easy. "We think that St. Louis has not been terribly supportive of high-tech research in the past," he said.

Marshall thinks he's close to a deal for the $12 million to $15 million in venture capital that MetaPhore needs to begin clinical trials by fall, but he welcomes the chance to meet with investors at today's forum. "We know we'll be back for more money, and this exposes us to a lot of people," he said.

Bill Bates, chief financial officer of Synergetics, will be looking for cash as well as contacts at InvestMidwest. His company, founded in 1992 in a two-car garage in Chesterfield, has 80 employees at its plant in St. Charles County. The company makes very tiny scissors and forceps that surgeons use in eye surgery and neurosurgery.

Synergetics is talking to three other companies about acquisitions that would move the company into other medical niches. If it makes the deals, more manufacturing would move here, bringing about 45 skilled jobs paying $14 to $20 an hour, Bates said.

But it needs outside capital. The handful of venture firms active in St. Louis seem more interested in later-stage companies than in rapidly growing startups, Bates said. "Hopefully, some of these venture capitalists [at InvestMidwest] will be interested in some early-stage companies," he said.

LoanSurfer, of Des Peres, already has raised about $5 million in venture capital, with participation from two local firms, Gateway Associates and Advantage Capital. It's trying to raise about $10 million to continue its expansion, President Alan Kinzel said.

The company has several elements of its strategy in place: 100 employees, a tie-in with a national real-estate firm and a system that lets loan officers conduct live Internet videoconferences with prospective borrowers. The client, sitting in a real estate office anywhere in the country, can print out and sign the necessary forms and get a loan approved within 15 minutes.

LoanSurfer's next step is hiring more people to execute its high-tech, high-touch strategy. The company plans to offer 24-hour customer support from its Des Peres office and to have satellite offices around the country to work with real-estate agents.

That takes a lot of money, Kinzel said. After it raises the $10 million, he said, LoanSurfer will need another round of private financing later this year, and then more private money or an initial public offering next year.

The 20 companies making presentations at InvestMidwest - 17 based in St. Louis, two from the Kansas City area and one from Springfield, Mo. - all have aggressive growth strategies. So does the Regional Chamber & Growth Association, which sponsors InvestMidwest along with the Missouri Venture Forum and the Technology Gateway Alliance.

"For many years we have heard the refrain that too many venture capitalists from both coasts fly right over St. Louis," RCGA President Richard Fleming said. "For many of our guests this will be their first exposure to St. Louis and to the sort of entrepreneurial dynamism that's going on here."

By showcasing "20 of our stars, 20 deal-ready companies," Fleming said, the sponsors hope to create enough buzz to make the venture capitalists want to come back.

Next year, St. Louis will host a biotech venture-capital forum in conjunction with the World Agricultural Congress. InvestMidwest is scheduled to return in 2002; it's envisioned as an annual event, alternating between St. Louis and Kansas City.

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InvestMidwest presenters
Companies are based in St. Louis unless otherwise noted.

AssistGuide.com: Uses the Internet to distribute information, products and services related to retirement living and long-term care.

BoxDirect.com: Runs an Internet marketplace for cardboard boxes.

Daedalus Technologies Co.: Makes a device that can take blood tests without drawing blood; it works by shining light through body tissue.

DataTrade: Develops enterprise resource management software. Based in Springfield, Mo.

FreightPro.com: Uses the Internet to arrange and track shipping. Based in Overland Park, Kan.

Haystack Toys Inc.: Intends to build a premier online toy brand for children ages 3 to 6.

Influence LLC: Provides marketing and communications services; runs an e-business incubator.

Inner Circle Logistics Inc.: Offers Internet-based software for small businesses to manage inventory, production schedules and other supply-chain information.

Kereos Inc.: Makes diagnostic agents and drug-delivery systems that allow doctors to target specific areas of the body.

Libratto.com Inc.: Has a technology that allows users, with a single click, to bookmark content for multiple devices, like a computer, cell phone and personal organizer.

LoanSurfer.com: Arranges mortgages online.

MetaPhore Pharmaceuticals Inc.: Plans to test a new painkilling drug.

Omniplex Communications Corp.: Provides telecommunications services to small and medium-sized businesses.

Parter Communications & Services Inc.: Provides Internet access to apartment complexes.

Primary WebWorks: Provides e-business support services.

Sequoia Sciences: Maintains libraries of naturally occurring compounds to expedite the discovery of new drugs.

SportsHuddle.com Inc.: Runs a Web site focusing on high school sports.

StreamSearch.com Inc.: Has a search engine for audio and video content on the Internet.

Synergetics Inc.: Makes microsurgical instruments.

Three Dog Bakery Inc.: Sells pet treats and gift products. Based in Kansas City.

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