UCI Seeks to Link Entrepreneurs, Investors

Raising enough capital to expand their fledgling businesses is one of the biggest challenges facing entrepreneurs in Orange County. Hoping to alleviate that problem, UC Irvine’s Accelerate program began offering a new government service this year aimed at linking small firms with investors over the Internet.

Sponsored by the Small Business Administration, the ACE-Net service has so far signed up three Orange County firms that are hoping to raise money from one of the approximately 200 investors who subscribe.

But one of the firms, Cognitive Diagnostics in Newport Beach, says the results so far have been disappointing.

“We went through a lot of hoops and hurdles, and probably $10,000 in legal fees,” said Josh Reynolds, president of the 3-year-old maker of medical diagnostic software. “We haven’t gotten one lead” since the firm’s prospectus was listed on ACE-Net a little more than a month ago. The problem, Reynolds believes, is that not enough investors see the offerings.

Cognitive Diagnostics is trying to raise $250,000. The company is currently in clinical trials for its computer software, which is used for the early detection of Alzheimer’s disease and other cognitive impairment disorders.

This week the firm started up a Web site where information on its stock offering is available. So far, Reynolds said, three potential investors who visited the site have made inquiries.

Greg Collin, a resource manager at Accelerate, said it’s too early to draw any conclusions about the effectiveness of the ACE-Net program. “The system has only been up about five months,” he said. “To think the companies will find investors this quickly is a bit of a high expectation.”

Patrice Apodaca covers economic issues for The Times. She can be reached at (714) 966-5979 and at patrice.apodaca@latimes.com