State Attracts Venture Capital
Companies Obtain $60 Million in Financing
By Don Mecoy
The Oklahoman
1-8-2003

Oklahoma companies were successful attracting venture capital in 2002, a year in which many venture capitalists across the country stayed on the sidelines because of the sluggish economy.

Chisholm Private Capital Partners, an Oklahoma City company, had its most successful year of venture financing as five state-based portfolio firms attracted nearly $60 million. Three companies attracted new investment, and two others secured follow-on rounds of financing.

"Not only did these companies raise nearly $60 million, in every single case our portfolio companies turned away additional investment," Chisholm General Partner John Frick said.

The financings came through the Chisholm II Fund and the Oklahoma Life Sciences Fund managed by Chisholm. Co-investor syndicates included seven other venture capital funds, six of which had never invested in Oklahoma firms.

Frick said these new out-of-state investments were the most encouraging trend of the year. During 2002, Chisholm invested $8.8 million in Oklahoma, while co-investors provided $42.3 million to early-stage companies in the state.The Chisholm portfolio companies that received venture capital funding are:

• ForHealth Technologies, a manufacturer of robotic technologies for hospital pharmacies that received $17.5 million.
• Inoveon, a medical services company specializing in detecting, staging and monitoring eye diseases that received $17.5 million.
• Incentus, an online third-party health care benefits administration firm formerly known as Cemara that received $8 million.
• Advanced Academics, an online educational company for grades seven through 12 that received $7.5 million.
• Critical Technologies, a developer of online records management solutions that received $1 million.

Chisholm spokesman Andrew Naugher said some of the companies received follow-on financing after the initial awards, which raised the total to near $60 million for the five firms.

Inoveon Chief Executive Bill Hagstrom said Chisholm and the Oklahoma Life Sciences Fund have been vital partners in his company's growth.

"Chisholm continues to be an advocate of the Oklahoma life sciences and health care technology community by providing access to capital in Oklahoma and beyond, executive talent and business opportunities,"Hagstrom said.

William Paiva, director of the Oklahoma Life Sciences Fund, said more start-up life-science companies will make their presence known in the state.

"We'll look back at 2002 as a watershed moment for the state's life sciences industry,"Paiva said. "The momentum is there for even more success stories and higher-paying jobs which will generate more venture capital syndicates, which can fund young companies through their growth cycle from startup through initial public offering or sale."