Finds Venture Capital

A directory aimed at another specialized audience is being published by Source Communications of Solana Beach.

The 1985 Venture Capital Sources Directory offers entrepreneurs, small businessmen, inventors--anyone interested in tracking down funding--with a listing of 360 different sources of venture capital, from Fortune 500 companies to private individuals.

The 112-page listing, which covers the Western states and Texas, provides a source’s name, address, telephone number, contact person and field or geographical area that the source is willing to invest in. It also breaks out venture-capital sources for minority groups and the economically disadvantaged.

“This is an invaluable guide to venture capital in the West; from seed money loans to multimillion-dollar underwritings, it’s all there,” according to publisher Michael Johnson.

Jesse Dalton, a vice president and editor at Source Communications and a consultant, said the notion of a venture-capital directory came to him while he was writing a business plan for a client in need of funding. Dalton went to what has been the standard resource in the field, the hefty Pratt’s Guide to Venture Capital Sources, which is published by Capital Publishing Corp. in Wellesley, Mass.

“Pratt’s is a tome ,” he said. The $90 guide weighs in at about 500 pages, with the first 25% devoted to business-plan advice and lists about 660 U.S. sources--but fewer than 200 in California in the latest edition. The edition that Dalton was looking at had fewer than 60.

“I went to the library and looked at Pratt’s and thought, ‘There’s got to be more than this, just in Orange County alone.’ Pratt’s has mostly old-guard . . . venture-capital groups that have been around forever. It’s very difficult (for a new company) because they have an established clientele base and just stick to managing the accounts they have now.”

Dalton began researching sources with the help of a newspaper clipping service and obtained documents about government funding under the Freedom of Information Act. The research eventually expanded to two full-time and one part-time employees and took a year.

It also turned up some rather unusual sources, Dalton said, including a San Diego bank that is the only state-chartered venture-capital bank in California, and a Stanford University venture-capital endowment. All but 100 of the 360 sources listed are in California.

Since it was launched in late January, the directory has become “an underground best-seller,” Dalton said. Source Communications hasn’t advertised the directory since an initial push at its debut, but orders are still coming in daily, and Dalton said that in the first month about 1,000 copies have sold at $45 apiece, well exceeding Source’s expectations. A second printing is due this month.

Source Communications, which publishes Solar magazine, as well as a wind energy quarterly and some contract publishing, is planning Midwestern and Eastern editions of the directory next year. 1986’s Western guide will list at least 800 sources, Dalton added.