HispanicBusiness

In Robert Rashford's fight to expand his high-tech company in Prince George's County, the first battle is for venture capital -- money from investors willing to take a chance on start-up firms and small businesses.

Rashford, 42, an engineer who started Genesis Engineering Inc. in Greenbelt in 1993 with $150, is bursting with ideas for his company, which builds high-tech tools for the Hubble Space Telescope. But he lacks the large amounts of cash needed to put his 21-employee company on the map.

Rashford is on the front line of a war fought by many small-business owners, but his problems are compounded, data show, because he is a minority entrepreneur.

Of the estimated $95 billion in the private-equity market in 1999, the last date for which data are available, $2 billion was managed by companies seeking to invest in minority-owned firms, according to a 2000 report by Santa Monica-based think tank the Milken Institute and the Commerce Department's Minority Business Development Agency (MBDA).

Getting a piece of the venture capital pie is often more about whom you know than what you know, said Anita Cooke-Wells, the director of the Office of Capital Access at MBDA. Many minority businesses simply aren't in the venture capital network yet, she said.

"In a lot of cases, there is really just a disconnect. Even if you are a very sophisticated business person you may not know" venture capitalists, Cooke-Wells said. "We've been shut out for so long."

That, she hopes, will change soon.

Recently, Rashford and 23 other small-business owners were selected for the competitive, national venture capital boot camp for minority business owners, called the MBDA Equity Capital Access Program. Hosted by the MBDA and nonprofit Emerging Venture Network, the program attempts to bridge the gaps between business owners and venture capitalists.

Rashford and the others were selected because their businesses have the potential to grow quickly, a crucial factor for prospective investors, Cooke-Wells said. About 440 small-business owners applied, including 10 from Prince George's County. Rashford's was the only Prince George's company selected.

Rashford is especially eager for venture capital now because he is planning to take his company beyond its work of the past nine years creating Hubble tools to move into two new projects. One tool is a portable three-dimensional X-ray to detect and analyze problems in airplanes; the other is a laser dry-cleaning system to clean the flat panels in television screens and other electronics.

The company needs $5 million to build the machines and put Rashford's business plan into action. The private company, which had revenue of $3.8 million last year, has been profitable almost since its inception, Rashford said.

At the boot camp, held last month during the National Minority Enterprise Development Week conference at the Omni Shoreham Hotel in the District, Rashford and other small-business owners took classes on how to attract venture capitalists.

Panelists, including Ron Peele, vice president of AOL Time Warner Ventures; Jane Tam, partner at law firm Piper Rudnick; and Harry Weller, a partner at venture capital firm New Enterprise Associates, focused on how to gain access to venture capitalists by networking, developing a good business pitch and closing the deal.

Business owners who participated in a similar program last year run by a nonprofit group have found some solid leads. Of the 15 business owners who participated in Emerging Venture Network camp in November 2001, six have received venture capital and others are in talks with venture capital firms.

"We're not trying to get you," Weller said. "Just play the game right and do your homework."