Trelys, a New Venture Fund, Almost Ready To Begin Investing

RESEARCH TRIANGLE PARK — South Carolina-based Trelys, a venture capital firm whose board of directors amounts to a who's who of technology heavyweights from the Palmetto State, is close to reaching its fund-raising target of $40 million, and is beginning to eye technology companies in Research Triangle Park, Charlotte, Atlanta and South Carolina.

Trelys officials declined to disclose which companies they find particularly enticing, but they did indicate that they already have several in mind. Trelys plans to make investments ranging from $500,000 to $3 million in companies that are already generating revenue, and that have products and/or services already available in the marketplace.

Trelys' original intent was to focus on investments solely in South Carolina, but with the economy stabilizing and the dot-com shakeout over the firm decided to expand its horizons.

"We still intend to do every good deal in South Carolina," says Larry Wilson, managing partner of the fund and no relation to Trelys' general partner and fund manager Adrian Wilson. "We expect to invest about half of our money in South Carolina and half in North Carolina and Atlanta."

Last summer, South Carolina Governor Jim Hodges said that venture capital investments in technology companies have become a critical issue for that state's economy. According to research compiled by Venture Economics and other industry groups, there were only six venture capital investments in South Carolina through third quarter 2001 - the most recent data available - totaling $95.1 million. That's pocket change compared to the $413.5 million invested in North Carolina during that same period, and the more than $12 billion poured into companies in California, which led all states in VC investments through third quarter 2001.

Larry Wilson says he thinks the venture capital freeze in South Carolina, and across the southeast, is already beginning to thaw.

"I think when we look back at 2002 in three or four years we're going to see it as a great year (for investments)," Wilson says. "We tend to take the approach that when other people don't find the market to be very attractive that may be the time to start making investments in companies that have the potential to generate high returns."

Jeff Barber, managing partner of PricewaterhouseCooper's Raleigh offices, says many firms retreated from the aggressive investing seen in technology companies throughout the late 1990s to become more inwardly focused on their existing portfolio companies.

"Now, there are a lot of funds, and new funds, that have not been aggressively seeking new investments," Barber says. "It has not been as active in the Triangle as what we have, at various times, seen in the past, but there are a lot of (VC firms) that are looking to trim some fat while fattening other companies."

Barber says he expects to see Trelys' name linked with new funding rounds for southeast-based technology companies in the coming months.

Trelys received a shot in the arm last summer from Companion Technologies Inc., a subsidiary of Blue Cross and Blue Shield of South Carolina, which poured $2 million into the fund. Since then several new investors have joined the fund, but Trelys officials declined to comment on what investors it has attracted during the last six months.

"Once the fund closes, probably in about 60 days, I'd be glad to talk about the fund," Adrian Wilson says.

What is known is that the Wilson's have put together a board of directors that gives Trelys an upper hand in locating new and emerging technology companies throughout the southeast. Some of those who came on board include James Bennett, chief executive officer of South Carolina Community Bank; Alfred Berkeley III, vice chairman of the NASDAQ Stock Market; Darla Moore, the woman that the University of South Carolina's Darla Moore School of Business is named after; and Tom Persons, president and CEO of the South Carolina Technology Alliance.

Both Wilson's have an extensive personal network throughout the southeast that promises to bring success to Trelys, Larry Wilson says. And a quick look at both Wilson's bios seems to back up that statement.

Adrian Wilson, a graduate of Davidson College, is the president and fund manager of Florence, S.C.-based Coastal Growth Partners, where he raised $6 million from corporations and individuals throughout the Carolinas. He is also a co-founder of the South Carolina Investor Network. Prior to forming Coastal, Wilson spent eight years as the associate general counsel and senior attorney in charge of corporate finance for Carolina Power & Light.

Larry Wilson, a graduate of the University of South Carolina, is the former chairman, president and chief executive officer of Mynd Corporation, a Columbia-based applications software and support provider with approximately 6,000 employees. Wilson has also been named to the Wall Street Transcript list of the top three CEOs in the software and services industry five times.