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Coffee Talk
Business Observer Friday, Nov. 7, 2003 14 years ago

Coffee Talk (Tampa edition)

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This week's items: Three metropolitan markets results mixed on Entrepreneur magazine's survey of "Best Cities for Entrepreneurs."Massachusetts venture capitalist John Abraham gives advice on valuing technology ventures

Coffee Talk (Tampa edition)

Up and coming

It looks like it's a matter of whether the glass is half full or half empty when it comes to economic development in the Gulf Coast region. Three of our metropolitan markets scored mixed results on Entrepreneur magazine's survey of "Best Cities for Entrepreneurs."

Good news: Florida was the only state with four cities in Entrepreneur's top 10 annual list. But the Tampa-St. Petersburg-Clearwater, Sarasota-Bradenton and Fort Myers-Cape Coral markets trailed several other Florida cities on the annual survey.

The Tampa Bay market, 25th on the national list, jumped ahead of 15 other markets this year. Last year, the area ranked 40th on the list that evaluates cities for entrepreneurial activity and small-business growth (new business starts), job growth and risk (bankruptcies).

In the mid-sized southern cities survey, the magazine ranked Fort Myers-Cape Coral at fifth and Sarasota-Bradenton at 10th.

Fort Myers-Cape Coral scored 94 points out a possible 100 in entrepreneurial activity and 99 points for job growth. However, it scored only 43 in terms of small-business growth and posted a risk factor of 14.

Sarasota-Bradenton scored 82 out of a possible 100 points in terms of entrepreneurial activity and 80 points for job growth. Yet, it received a score of only 31 for small-business growth and a risk of 12.

On the overall list, Minneapolis-St. Paul was first, with scores of 96 for small-business growth and a risk factor of 93. Washington, D.C., Atlanta and Fort Lauderdale followed in order. West Palm Beach-Boca Raton ranked sixth; Miami, eighth; Orlando, 10th; and Jacksonville, 19th.

On the mid-sized southern cities list, Daytona Beach ranked first; Charleston-North Charleston, S.C., second; and Melbourne-Titusville-Palm Bay and Richmond-Petersburg, VA, tied for third.

The 25% discount

Well, if somebody didn't just come right out and say it. Massachusetts venture capitalist John Abraham even had the gall to say it right here in St. Petersburg. If you want to start a technology company in the Tampa Bay area and you're trying to value it for investment purposes, here's how:

×Find a similar outfit in the Boston area;

×Find out how much the public equity markets or its private backers think it would fetch;

×Discount that number 25%.

There you have it. That's how much your company is worth.

Abraham, a partner at Waltham, Mass.-based Kodiak Venture Partners, didn't shock his audience at the Tampa Bay Technology Forum's fall networking social Oct. 29 with his observation. In his defense, Abraham was responding to a question from the local tech entrepreneurs in attendance. They know better than anybody how Bay area deficiencies make building a tech company around here seem like missionary work sometimes.

But a 25% discount? Is the chasm really that wide between Boston and Tampa?

Is Revere Beach really so much superior to Clearwater Beach? Christian Scientists preferable to Scientologists? Where would you rather window-shop: Neponset Circle or St Armands Circle? (We really do have them there.)

Unfortunately for growing a local tech economy, those comparisons kind of miss the point. Regions like Greater Boston have resources like MIT. Regions like ours have ITT Tech.

All is not lost, however. Take Abraham. He didn't fly all the way down here just to insult us. Abraham was in town for a board meeting of OpenNetwork Technologies Inc. He was pressed into service as a last-minute replacement speaker for fellow venture capitalist Manny Fernandez, who suffered a death in the family. Both men are directors of OpenNetwork Technologies, an 8-year-old Clearwater company developing products to make it easier for businesses to secure their enterprise functions on Web.

More importantly, Battery Ventures LP, Abraham's old VC firm, and Fernandez's SI Ventures, have both sunk money into OpenNetwork.

Never mind

Colonial Bank had a new assistant vice president/commercial lending officer for the region that covers Collier, Lee, Manatee and Sarasota counties on Nov. 3. By Nov. 4, it didn't.

Darin Jenkins decided a few minutes after Colonial sent out a news release on the afternoon of Nov. 3 announcing his hiring that he quit, according to Olivia Rill, assistant creative director for the bank's public relations firm in Fort Myers, Priority Marketing of Southwest Florida Inc. Jenkins was even enrolled in Colonial's management training program, Rill says.

Too bad. Jenkins, a finance graduate of Florida State University who has worked in banking six years, sounds like he would have made a fine addition to Colonial. The press release quoted Colonial executive Robert B. Bassett as praising Jenkins as "an asset to the bank and its customers." Rill says Colonial usually waits 90 days to announce new hires, except for management positions. That's because it is rare for management recruits to bail so quickly. Bank officials may want to expand that 90-day rule.

On a more upbeat note, Colonial's Montgomery, Ala.-based holding company, Colonial BancGroup Inc., announced a 14-cent quarterly dividend for shareholders of record on Oct. 24.

North Port considers incubator

North Port city officials are trying mightily to stay ahead of its explosive growth - the city is expected to become the largest, most populated city in Sarasota County within the next few years. Construction permits have hit record highs, with people attracted to the affordable cost of living compared to some of its neighboring cities like Sarasota, Fort Myers and Naples. The county school board is building one new school in the North Port area every two years to keep up with the growth.

So it should surprise no one that the city may start its own business incubator, to foster successful entrepreneurial development among its growing population.

Dan Miller, a managing partner of the one-year-old Sarasota business incubator, Startup Florida, has spoken with North Port's Economic Development Advisory Board about the logistics of starting a south county incubator. Miller and city officials say the only public investment would be assistance in locating a physical space for the incubator; the rest of the funding for most incubators comes from private investors and incubated businesses.

Bob Tunis, North Port's economic development manager, told Coffee Talk that Miller "made a pretty convincing presentation." Before the city commits to the idea, Tunis is doing due diligence on Startup Florida's operation, "as I have heard that they may have had some speed bumps in their first year of operation." But, Tunis adds: "With the recent announcement of a USF campus right on the border of North Port, an incubator might be a next logical step.

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