Santa Fe's High-Tech Chaparral
Randy Burge presides over Coronado Ventures Forum like a daytime talk-show host. He even dresses like one, in his black turtleneck and tan blazer. The 6-foot-4-inch master networker calls on each of the 70 people in the room by first name, encouraging them to introduce themselves. The room is so crowded, some guests are standing dangerously close to the flaming sternos on the buffet table in Santa Fe's adobe-and-mauve Eldorado Hotel conference room.
"That guy [Burge] knows everyone," says Jim Glover, founder of WorldOne Media, an Internet startup that streams TV programming. For Glover, this rates as serious praise: He is at CVF hoping to meet investors through Burge.
Coronado Ventures Forum is that peculiar creature of the Internet Age, an informal, high-tech networking group--a kind of dating service for investors and high-tech entrepreneurs. Such groups are common in California, but this is the only one of its kind in New Mexico. People show up here with few expectations and a lot of hope. Bimonthly meetings include keynote speeches on topics such as creating a management team or the state of the local venture-capital community. The program includes a featured entrepreneur, who pitches his business within five minutes, hoping to catch the eye of an investor in the audience.
Tonight's presenter, Michael Wallace of Albuquerque-based Global Haptics, gives a light-speed explanation of his haptics device--a multicolored orb the size of a bocce ball used to manipulate three-dimensional images on a computer screen. At the end of the evening's program, 30 people rush over to Wallace's table, like kids to an ice-cream truck, to be the first to squeeze the orb.
It's too early to say whether Wallace will get any bites, but CVF has certainly introduced him to a passel of potential investors, many of whom are now peppering him with questions. Others who have attended the networking meetings have made valuable contacts: Albuquerque-based Introbotics, a company that makes circuit-board testing devices, raised $670,000 in seed funding through connections made at Coronado. Introbotics founder and CEO Brian Butler introduced the company during one of Burge's five-minute sessions, and that led to discussions with Colorado Venture Management's Joe Worden, whose Boulder-based venture firm provided some of the initial capital. Worden is a frequent CVF attendee, flying in from offices in Phoenix or Boulder for the event.
Burge, now 43, came to the position of chief proselytizer and energy source for CVF by a circuitous route, whose twists and turns illustrate both the difficulties and attractions of doing high-tech biz in New Mexico. Starting his career in the family oilfields in San Juan County, he went on to the state Economic Development Dept., then became director of entrepreneurial programs for Technology Ventures Corp. (TVC), an incubator funded by Lockheed Martin. TVC's brief is to help eggheads from Sandia National Laboratories--a U.S. outfit that designs weapons components--spin inventions into businesses.
While there, Burge picked up on the local need for a different sort of group. TVC, under its unabashedly political head Sherman McCorkle, was not interested in networking programs, which McCorkle considered of low value. By early 1998, Burge had defined his goal: He was going to help build a grass-roots culture that would spawn and cosset high-tech projects along the 150-mile ramble of the Rio Grande from Los Alamos to Albuquerque.
It wasn't an obvious dream in New Mexico. People migrate here from places like Silicon Valley for the magenta sunsets, the adobe and sagebrush, the laid-back lifestyle. They sure don't come for high-tech hustle. Los Alamos County (pop. 18,000), home to weapons-maker Los Alamos National Laboratories, has the highest concentration of PhDs per capita in the U.S., but most are government scientists. And they are, for the most part, a decidedly nonentrepreneurial lot: a top Los Alamos researcher enjoys a nice lab and a healthy $100,000-a-year salary--not a lot of incentive to become a hard-working entrepreneur.
CVF's struggles in getting started are symptomatic of New Mexico's government-centric, laid-back economy. Statewide, unemployment last year was 5.6%, but there has typically been a huge disparity between the affluent government towns of Los Alamos and Santa Fe (2.7% and 3.7%, respectively) and coal-mining Luna County (27.9%) near the Mexican border. For a few years, state development efforts netted mostly low-wage customer-service phone centers--there are now 30. Says Larry Icerman, a CVF founder and principal of Albuquerque technology consulting firm Icerman & Associates: "We don't have big exciting economic times, but we don't have real bad times either."
CHEAP EATS. Still, back in '98, Burge was sure of his dream, and he figured CVF was the best vehicle for it--though it was clear it was going to need serious work. CVF, founded by Icerman and three associates in 1994, had no formal structure and only a vague mission. It seldom held meetings at the same place twice, vagabonding around Santa Fe's historic plaza from one hotel conference room to another. It even, for a time, landed far out of town at the grim Santa Fe Airport cafeteria. "We got a full dinner, and it was cheap," says Los Alamos tech officer and CVF program director Sue Fenimore. And for a long time, CVF had trouble drawing more than a couple dozen people to meetings.
But over the past three years, things started to change. Venture capitalists began noticing New Mexico in 1997, when Governor Gary Johnson signed a bill offering matching grants to companies investing in New Mexico high tech. The fund--now at $204 million--has turned out to be good for business: "Without [that money] there is little incentive to take a chance here compared to the other, hotter investment regions," Burge says.
Indeed, the number of venture firms with a New Mexico office has grown to eight, from zero in 1997. The total fund capital among New Mexico VC firms is now almost $620 million. Last year was a record: TVC, which tracks investments here, notes that funding commitments from equity investors to New Mexico companies totaled about $133 million.
Ironically, while the state can invest up to $15 million in any New Mexico venture fund, until last December none of the eight had asked for more than $7 million. That is likely because the tech projects worked on locally are so esoteric that VCs hesitate to take the plunge. Unlike in corporate research, Los Alamos and Sandia scientists--the core of the entrepreneur pool--develop gadgets whose commercial applications are seldom obvious, such as instruments that take minute measurements of the intensity of a laser beam, and plasma used in weaponry casings. Nonetheless, CVF attendees nowadays typically include scientists who drive the winding canyon road from Los Alamos, biotech and software folks from Santa Fe, Sandia Labs researchers from Albuquerque, as well as venture capitalists. Investors now sit on the board of CVF, and so, interestingly, does TVC.
Success creates its own headaches. CVF conferences are no longer lonely affairs. Burge, who after quitting TVC in 1999 set up his own technology company, proActive.tools, often has to help set up extra chairs and tables, because more people show up than make reservations. (In a place where few events sell out, calling ahead isn't exactly a habit.) These days the till, at the end of the conferences, is finally matching the bills. But CVF is still trying to find a permanent place to hold meetings, and its requirements are growing. Airport cafeterias need not apply.
By Emily Esterson
Esterson edits the New Mexico Business Weekly.