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When asked about Florida investment opportunities, venture capitalist John Abeles tells the story of two shoe salesmen who go to a developing country. One reports back that prospects are grim because no one even wears shoes. The other sees unlimited potential because everyone needs shoes.
"The question is, is the fact that there hasn't been more development of the [venture capital] market an opportunity or not," Abeles says. "Well, I think it is an opportunity. I think people here are starting to wear shoes."
Abeles arrived in Boca Raton from the San Francisco area about five months ago to begin raising funds for medical and life sciences companies. With an M.D. and a degree in pharmacology, in 1980 he founded his own venture capital company, Medvest Inc. Since then he has been an investor in, a consultant to or a director of 28 companies, most in the West Coast medical industry.
Part of the attraction to Florida, Abeles says, is that the state has so little venture capital activity.
That refrain is not new, and the numbers back him up: Florida's homegrown venture capital resources of $117 million are dwarfed by other parts of the country. California has $8.3 billion in venture capital under management, and New York $7.4 billion, according to Venture Capital Journal, which tracks venture capital funds. Massachusetts and Connecticut represent a larger share of the nation's $31 billion venture capital pie than Florida.
When it comes to funds disbursed, Florida also lags. California and Massachusetts together accounted for 52 percent of the $2.5 billion venture capital dispensed in 1992, according to the National Venture Capital Association. Florida entrepreneurs pulled in less than 2 percent of total venture capital dollars, about $45 million, in 1992.
But with an eye on economic growth and profit, financial wizards, entrepreneurs and academics are beginning to merge their talents and chutzpah to generate and control a larger share of the nation's venture capital resources.
In its broadest sense, venture capital includes a wide assortment of investors --from the so-called angel investors, who provide seed capital for start-up enterprises, to classic Wall Street venture capital firms that provide young companies with expansion capital. Depending on the size of the business, venture capital firms can invest as...