LI ramps up action for venture capital

When it comes to winning venture capital money, Long Island doesn't get much respect.

Of the $21.8 billion in venture capital spending in 2010, $10.9 billion went to California, $1.3 billion to New York State, and $21.4 million to Long Island, according to a recent survey by the national accounting firm PricewaterhouseCoopers.

Over the decades, Long Island has gotten sizable amounts of money from the Defense Department, which funded military airplane and electronics programs. Venture capital money looks for new industries and even promising start-ups. Now, Long Island business organizations are planning to increase that flow.

"We are lucky in that we have some real assets here," said David Calone, chairman of Suffolk County's planning commission and chief executive of Bablylon-based Jove Equity Partners Llc, referring to the Island's five major research and educational institutions.

The Long Island Association's new Accelerate Long Island program plans a Long Island Seed Fund that could be modeled after ventures in San Diego or St. Louis.

The seed fund is one part of the Accelerate program, aimed at commercializing research coming out of Stony Brook University, Hofstra University, Cold Spring Harbor and Brookhaven National Laboratory, and North Shore-Long Island Jewish Health Systems.

LIA chief Kevin Law said details of how the seed fund would work are still being planned. It may work in conjunction with the relatively new capital-raising Long Island Angel Network.

Brookhaven Town Supervisor Mark Lesko said one way or another, it has to work: "We need the local funds."

According to experts, one company that would be attractive to venture capitalists is innRoad Inc. of Southampton, a 4-year-old technology firm that provides property management, distribution and marketing services to independent hotels. Chief executive Murat Ozsu said the company has 14 employees.

Mark Fasciano, who has started several high-tech companies on the Island and now heads Canrock Ventures of Jericho, an early-stage technology funding firm, said the region is at the dawn of venture capital. Canrock, he said, has funded seven small start-ups just since May. But the Island has a way to go. "I think it's a question of organizing the community" to get people talking and thinking about venture capital, Fasciano said.

It can be done, said Jeff Bass, chairman of the Long Island Capital Alliance, which has been raising money for companies since the mid- 1980s. One of the problems in raising venture capital, Bass said, is the Island is perceived as a high-cost place for businesses. Thus, less profit for the venture capital community.