SAN FRANCISCO -- Venture capitalists have been treading carefullysince their dot-com misadventures, but still occasionally wander offthe beaten path in search of runaway successes.
The quest sometimes turns quirky concepts into wannabe businesses.The past year was no different, even as venture capital investmentsfell to their lowest level since 1997.
There is, for example, the Massachusetts startup that got $47.5million to fund its work developing a treatment for insomnia and jetlag. Or the Internet coordinator of political campaigns who got$300,000 of venture capitalist backing.
The two ventures were among 47 unearthed whenPricewaterhouseCoopers, Thomson Venture Economics and the NationalVenture Capital Association pored through industry statistics toidentify 2003's oddest startups.
Others include a startup that makes energy-efficient trafficlights with hidden security cameras; an Internet service that touchesup digital photos; and a startup making hybrid baseball bats withwooden barrels and aluminum handles.
Even the bat maker's chief executive, Jack Cipoletti, thought theconcept was wacky when Mountaineer Capital approached him to overseethe firm's $300,000 investment in West Virginia Bats LLC. But now hebelieves the company in Eleanor, W.Va., is about to uncork a newmarket.
The five-employee startup has already sold about 6,000 models ofthe "Original Metal Wood" bat, mostly to youth leagues. The bat,which wholesales for about $100, is supposed to last as long as 10plain wooden bats, which sell for about $30.
Overall, the 47 odd ventures received a combined $492 million inventure capital during 2003, the research led byPricewaterhouseCoopers found. That's about 3 percent of the estimated$17 billion in VC money invested this past year.
In venture capital investing, a herd mentality can sometimes causetrouble by creating too many startups chasing after the samecustomers. That's one allure of the odd venture.
Julie Wainwright suffered through a glut at the height of the dot-com boom while she ran Pets.com, which became famous for its sockpuppet mascot. But high brand recognition wasn't enough to helpPets.com rise above eight other online pet stores, contributing tothe company's high-profile collapse three years ago.
Today, Wainwright is happy to be chief executive officer ofBellamax Inc., a San Francisco-based startup without any notablecompetition. The company touches up digital photography forbusinesses and consumers.
With sales of digital cameras rising steadily, Bellamax was ableto raise $6.3 million from several venture capitalists and persuadeWainwright to take another stab at running an Internet business.
"The dot-com time was crazy, but this company is founded on soundbusiness fundamentals," she said. "There is a real need for what weare do. We think of ourselves as Adobe Photoshop on steroids."
Adobe Systems Inc., which makes the popular Photoshop softwareprogram, is among Bellamax' financial backers.
AP
Odd Ventures
Some off the year's most unusual startups and their funding:
Atomic Dog Publishing -- $2.47 million, online college textbookpublisher.
Capella Education -- $7.5 million, online university.
Currenex -- $3.6 million, online currency exchange.
DriveSafety -- $1.5 million, driving education simulator.
ForHealth Technologies -- $7.4 million, robotic drug dispensing.
JobFlash -- $1 million, automated employee screening, recruiting.
Maptuit -- $2 million, address matching, mapping for truckers.
New Vine Logistics -- $6.95 million, consumer-direct wineshipping.
Pets Choice -- $5.4 million, veterinarian clinics and hospitals.
PhatNoise -- $9.1 million, searchable digital music lists forhomes, cars.
PhotoSecure -- $450,000, photonic dye for counterfeit protection.
The Tennis Channel -- $25.4 million, 24-hour coverage of racketsports.
SOURCES: PricewaterhouseCoopers, Thomson Venture Economics andNational Venture Capital Association.
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