High tech investments from Oklahoma sought

"Investors Sought" Bob Rees is looking for Oklahoma Companies to invest in.
By Ralph Schaefer
Tulsa Business Journal
Published: November 9 - 15, 2001

Robert W. (Bob) Rees is looking for Oklahoma businesses for investment.

But don't call unless requirements can be met - specifically high tech that meet stringent investment qualifications.

Rees, a partner in the Venture Capital Fund, is an Edmond native and returns to his home state monthly for business reasons.

Venture Capital Fund with about 434 million, is aligned with other funds in the Silicon Valley that have in excess of a billion dollars available for investment, he said.

"Our niche, however, is the mid-continent part of the United States, Colorado, Oklahoma, and Texas. We also have offices in Denver and Austin, in addition to San Francisco. This gives us access to another part of the United States. We want to partner with the larger funds when there is an investment opportunity in these states."

Anyone considered by the Venture Capital Fund must meet four key criteria, Rees said. They must:

• Be in a large demand-driven market. The company must be in a market where "all boats are rising." Investigators must be able to determine there is a likelihood the company will have the capability of building to $50 million to $75 million in sales within three to five years.
• Technology protection. The company must be able to show their technology is truly unique, whether it has a real marketplace advantage and if the product is protected by patents.
• Experienced management team. "If the purpose of the company is for the owner to build personal wealth, we aren't interested," Rees said. "But if the company owner wants to build a management team that focuses on growth, there will be considerable interest. As investors, we will try to recruit executives to build the company. And as investors, we also will have a seat on the board of directors."
• Return on investment. The investment have the potential of being returned 10 times. That means if $5 million is invested, the return should be at least $50 million within three to five years.

If Venture Capital Fund does select a high-tech company, it also puts it on the radar screen for other investors interested in the product, he said. "We have access to other Silicon Valley investment funds that otherwise would not be available."

Investors take several forms, Rees said.

First is the "angel investor," the wealthy individual willing to put in seed money.

This type of investing is "hit and miss," but it is important in getting a company started.

When the company is moving, the second round begins, Rees said. This is when the company is needing to grow and additional capital is needed. This is when Venture Capital Fund like to enter the picture.

The third round is when the decision is made by the company to make a move toward an initial public offering, a merger or acquisition.

Even before the actual investing is made, a due diligence investigation is completed, he said. This often involves Venture Capital Fund and another firm that knows the product.

Individuals working with venture funds spread their investment risk, Rees said. They have more opportunities for success.

There is no way of telling what will happen in the future in the wake of the terrorist attacks on America, he said. But persons investing in venture capital funds have been more successful than the Standard and Poors investors over the years.