Sunday, March 25, 2001

New Economy

Investment options abundant

        Combine the tech wreck in the stock markets with the California energy crisis, and what you get is a lot of interesting investment opportunities.

        That's what Cinergy Ventures is finding. Kevin Kushman, a managing director of the utility company's investment fund, said the need for solutions to California's electricity shortage is generating startups. The tech wreck lowered valuations of such companies, making it possible for Cinergy Ventures to afford more investments. “Deal flow for us has been pretty strong,” he said.

        The venture fund's latest investment is $500,000 in Pentech Solutions, which makes remote devices that can monitor heating and cooling equipment, and makes real-time data available via the Internet.

        It has also given more money to Cadence Network, the Cincinnati-based startup that uses the Internet to monitor energy use at retail chains. Mr. Kushman said another investment will be announced soon, and Cinergy Ventures is looking at a dozen more deals.

        The company has $100 million in investments. About $60 million is direct investment in companies, and the rest is money placed with energy-related venture capital firms.

MALT may expand

        Covington's embryonic Madison Avenue Launch Team is being asked to think bigger. A nonprofit incubator modeled after Over-the-Rhine's Main Street Ventures, MALT originally planned to take two floors of the Fifth Third Bank building on Madison and a budget of $250,000.

        But that was before Kentucky's Innovation Commission took shape. Northern Kentucky Chamber of Commerce president Gary Toebben heads the committee making recommendations on new-economy policy for this section of the state. His committee is hoping MALT is designated an “innovation corporation” serving a region that includes Lexington and Louisville, as well as Covington and Newport.

        That would mean more space and more money to help technology startups. “We don't know that any of that will happen,” Mr. Toebben said.

        By June, each of four regions in the state will draw up a business plan to be funded with state help. Those plans will be final, not drafts, so decisions will be made between now and then about what the Northern Kentucky strategy will be.

Spinoff profitable

        A new company at Main Street Ventures is MemberMap LLC, a spinoff from the CINCO Federal Credit Union. Headed by Steve French, the company works to help credit unions expand services. It places financial planning advisers in credit unions, and on the electronic side, builds financial planning resources for Web sites.

        Mr. French said the company is already profitable. It'll roll out the next version of its credit union portal in about a month, and it is developing customer-relation software.

        E-mail John Byczkowski at or call 768-8377. Find a list of local New Economy companies at


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