Investor Relations

October, 2001

While venture capital is established in Hawaii, we’re still a long way from establishing ourselves as a technology breeding ground. Barry Weinman, general partner with California-based AVI Management (managers of a $500- to $600 million fund), has been making venture capital investments, principally in Silicon Valley, since 1980. He recently held a fundraiser in the valley to raise awareness about technology companies based in Hawaii. Weinman has invested $4 million in hotU, a Honolulu-based high-tech company. Tim Bajarin, president of Creative Strategies Inc., is a venture capital analyst who splits time between Oahu and his home in California. He is a long-time Hawaii observer and is one of the top analysts in Silicon Valley. Bill Richardson is the general partner of HMS Hawaii Management Partners, a venture firm responsible for venture capital portfolios exceeding $22 million.

What are some of the major challenges that Hawaii-based companies encounter when seeking funding from mainland investors?

Richardson: The problem is always proximity and the ability of mainland investors to closely monitor the investment.
Bajarin: Verifone showed that some very powerful technology can originate in Hawaii, and other examples such as Digital Island, have reinforced this image. However, the successes have been few and far apart, so Hawaii is not viewed as a hot bed for technology development.


Bajarin
: It’s slowly changing thanks to Gov. Cayetano and a couple of groups that have really started to raise the awareness of the role technology has played in the state’s economy and how technology companies are becoming more important to Hawaii’s business environment.Are the right efforts being made to turn that around?


Richardson
: Biotechnology, communications infrastructure, remote healthcare delivery, aquaculture and agriculture.What industries have the most potential for obtaining venture capital investments?

In what ways can Hawaii take advantage of its strategic location between the U.S. mainland and Asia?

Weinman: The telemedicine projects have a great deal to offer to Southeast Asian companies, as well as some of the biotechnology products coming out of Hawaii. The Asians are certainly advanced over the U.S. with some of the wireless applications, so Hawaii is a very interesting place to invest into that market as well.


Weinman
: The people in Silicon Valley work at companies where they can see what it takes to raise money and how everything works, and then they go and start their own companies because they understand the process. Hawaii lacks some of that infrastructure, so yes, they are inexperienced. The biggest issue is learning how to fundraise because you have to fundraise in order to be competitive and grow big. It’s very hard to grow big without capital.It’s been said that Hawaii lacks ingenuity and entrepreneurship. Is that the general perception amongst mainland investors?

 

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