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# Industry Year in Review (TIGR Newsletter, November 2002)
- URL: https://www.hibiotech.com/press-2002-11-tigr/
- Published: 2002-11-01T12:00:00.000Z
- Updated: 2026-10-24T18:57:00.000Z
- Description: From the Hawaii Biotech archive: " WE ARE POISED TO REALL Y START INVESTING HEAVIL Y AGAIN IN THE NEXT 12 MONTHS " TARGETED INDUSTRIES GROWTH REPORT John Dean (ex-CHB of Silicon Valley Bank), as well as Unity House (local union pension fund). California investors
- Author: The Hi, Biotech Newsroom
- Tags: Press Archive, Press Coverage

Hi, Biotech is an independent publication with no affiliation with Hawaii Biotech, Inc. This page preserves a historical record from the company's original press archive, republished for research and archival purposes. Copyright in the original material remains with its original owner.

Industry Year in Review: Hawaiian Electric Industries makes its first local venture capital investment as part of consortium of 10 local investors putting up $1 MM to fund proprietary hydrogen fuel cell technology developed by Hoku Scientific. Former Bankoh CHB Larry Johnson also in investor group. (6/02); Wayne Brown Institute holds Investor's Choice International Conference on Maui. Six Hawaii companies presenting include: Hawaii Biotech (vaccine and drug development), 3Clic (internet directory), White Hat Securities (internet security software), Empowerosity ( Net tools for universities), Hoku Scientific (hydrogen fuel cell technology), Zoji Golf (adjustable golf clubs for kids; idea won UH business plan competition) (6/02); Silicon Valleybased VC company Venture Law Group teams with local entrepreneur mentoring organization HiBEAM to help develop homegrown companies. VLG helped launch Yahoo , other famous dot com highflyers (4/02); Hoana Technologies picks up $2.6 MM in seed money to launch its wireless healthmonitoring technology on road to commercialization. Company is spin-off of local tech industry leader Oceanit , headed by Pat Sullivan . Local investors accounted for 75% of money and include high net worth entrepreneurs Jim Schuler (Schuler Homes) Ron Higgins (founder of Digital Island), Duncan MacNaughton (property developer), www.tigrnet.org TARGETED INDUSTRIES GROWTH REPORT CITY BANK & HAWAII BUSINESS EDITOR: MichaelSchmicker PUBLISHER: Richard Lim., President and Chief Operating Officer, City Bank Ronald Migita, President and CEO, CB Bancshares; Vice- Chairman and CEO, City Bank 11.2002 This Hawaii Business newsletter is sponsored in the public interest by City Bank and is designed to awaken, generate and sustain significant, broad-based private and public sector support for selected emerging growth industries in Hawaii which offer one or more of the following advantages: a) a competitive niche for Hawaii in the global economy, b) rapid upside growth potential c) the ability to replace imports or generate export dollars, and d) the promise of attractive job and career opportunities for Hawaii's people. UH R & D • BIOTECHNOLOGY • OCEAN SCIENCE AND TECHNOLOGY • ASTRONOMY • INTERNET AND COM- PUTER SOFTWARE SERVICES • SPORTS TOURISM • FILM PRODUCTION • HEALTH TOURISM & SERVICES EXPORTS • DIVERSIFIED AGRICULTURE • AQUACULTURE • FORESTRY • EDUCATION TOURISM HAWAII VENTURE CAPITAL UPDATE 2001-2002

" WE ARE POISED TO REALL Y START INVESTING HEAVIL Y AGAIN IN THE NEXT 12 MONTHS " TARGETED INDUSTRIES GROWTH REPORT John Dean (ex-CHB of Silicon Valley Bank), as well as Unity House (local union pension fund). California investors put in balance. Sullivan praises Act 221 investor tax credits legislation for helping bring investors to table (2/02); UH Prof. Rob Robinson, recruited from Harvard to become Director of UH's Pacific-Asian Center for Entrepreneurship and E-Business, launches UH Angels , state's first angel investor network (2/02); Four experienced venture capitalists give local money seekers insider insights into VC game at UH College of Business Administration Kipapa Lecture Series talk on "Venture Capital: A Silicon Valley Perspective ." Panel led by Barry Weinman, parttime Hawaii resident and managing director of Californiabased VC firm Allegis Capital. Experts also included Charlie Bass, Socket Communications ; Jamie Shennan, Trinity Ventures, Jean-Louis Gassee, Computer Access Technology Corp .(2/02); University Connections and HSDC hold third annual Private Equity Alternatives Summit (PEAS) .PEAS designed to encourage capital managers from local estates, foundations, unions, pension funds, large corporations, real estate investors to consider putting at least small part of their millions in local startups, venture capital-type investments. Strong turnout of 150 participants at Kahala Mandarin received briefings on local tech industry, including biotech's emergence; a look at halfdozen local firms which already enjoy VC backing; info on Hawaii's new VC tax incentives and profiles of existing Hawaii-oriented VC funds (12/01); Economic impact study by National Venture Capital Association estimates VC responsible for creating 2,300 new jobs in Hawaii over last three decades (undoubtedly most coming in last few years since Hawaii didn't even have VC funds until mid-90s). Commentary: Since June 2001, HSDC taxpayer money ($13.5 MM invested in seven local VC funds) has been professionally managed by MN Capital . HSDC president John Chock shares upbeat optimism of individual Hawaii VC fund managers (see below). Points to increase in available VC; improvement in quality of investment opportunities; expansion of managerial/technical skills base in Hawaii over last 12 months - at time when Mainland/international activity almost moribund. Mark Mukai, former head of local Hawaii office of Seattle IP law firm Davis Wright Tremaine successfully launched Hawaii-based $50 MM Shinrai Capital fund backed by Mainland/Japan investors; fund focused primarily on Japan/Asia but also providing growth funding to local companies going into Asia market. Chock also notes Hawaiian Electric commitment of $2.5 MM for local VC investments, with first $500K to Hoku Scientific; new SBIC being planned by City Bank . Act 221 accelerating Mainland interest in Hawaii, he says. "We're seeing more Mainland-based fund managers coming through." One national VC fund (offices in NYC, Tampa, St. Louis, New Orleans) focused on tax-advantaged type investments discussing with Chock possibility of $20 MM fund here -$15 MM for high tech and balance in film/media production; SF-based Stockton Funds another company studying Hawaii opportunity, could bring both investment money as well as Mainland-based companies in portfolio which could take advantage of state R&D tax credits. Meanwhile, annual Wayne Brown Institute VC showcase on Maui continues to find money for local tech startups -$30 MM of total $90 MM equity capital raised since launch of Valley Isle event in 1999 has gone to Hawaii presenters. Chock welcomes recent scouting of Hawaii by principals of leading Palo Alto tech law firm Brobeck Phleger & Harrison looking to become active here. "We're bringing more and more skilled talent here." Another example: Punahou alumna, PH.D in biotech, and her husband, former manager of $500 MM VC fund in Ohio, looking to return to Hawaii, bringing skills back home in reverse brain drain. "Given the national dot.com meltdown and the stock market woes, TARGETED INDUSTRIES GROWTH REPORT Hawaii's VC industry is doing very well." More Info? John Chock, HSDC, 587-3829; Bill Spencer, Hawaii Venture Capital Assn., 528-4751, www.hvca.org . VC FUNDS UPDATES ....... HMS Hawaii Management has four funds; targets early stage Hawaii-based startups primarily in telecom, biotech, aquaculture fields . Company currently invested in nine local/Mainland companies. Portfolio includes HotU (second-generation dotcom offering targeted recruiting database to large corporate recruiting organizations using tools that students are attracted to; Kona Bay Marine Resources (formerly called Kona Bay Oyster & Shrimp); Pacific Island Resources (mariculture company in fishing business); several telecom tech companies including ALOHA Networks; Interwave Communications Intl . (via sale of its company Wireless to Interwave); another company aiming to be largest locally-owned ISP (via merger of local ISPs Pacific DirectConnect and Pacific Information Exchange ). In last 12 months, invested in two more companies : local biotech leader Hawaii Biotech Inc . and San Jose, CA-based telecom company Mobicom. Two early, successful funds -HMS Investments (1995), HMS Investments II (1997) - returned 30%+ to their investors , hitting home run with Digital Island. Keep eye on latest fund in works - HMS Hawaii III . Fundraising actually started Fall 2000, was sidelined for while by dot.com industry/stock market troubles, started up again in summer 2002; this time targeting Mainland investors as well as HMS' traditional, local investor base. Partner Bill Richardson confident HMS can hit large target fund size ($75 MM); have also filed application for SBIC license to leverage investment monies of fund (SBIC matches $2 for each $1 in private capital, offers low interest rates, provides loan guarantees). If successful, HMS Hawaii III would provide shot of confidence to local entrepreneurs nervous about nationwide drop in VC lending. Partners hoping to complete fundraising by year end . With arrival of HMS Hawaii III funds, "We are poised to really start investing heavily again in the next 12 months," says Richardson. Current U.S. economic woes offer opportunity, not just risk. "History shows that investing during troughs delivers the highest returns." Richardson notes birth of new industries (integrated circuit, personal computer, internet) have occurred in troughs; likewise emergence of some of biggest tech companies today (Microsoft, Cisco, etc.). "We're clearly in a tough today, so it's an interesting time to invest if you have the stomach for it." Richardson following nanotechnology , which many tout as next revolutionary industry. Also called molecular manufacturing, involves research and technology development at atomic, molecular or macromolecular levels (nanometer =one-billionth of meter); exciting potential applications in computers, communications, medicine. In Hawaii, most promising nanotech research bases include UH (marine bioengineering dept. already active); Navy's Pacific Missile Range Facility (Barking Sands). Richardson also keeping eye on interface of food/biotech industries.......At $30 MM, PacifiCap Group LLC currently largest local-based VC fund, is invested in five companies, including 4Charity Inc. and Piihana Pacific (builder /operator of internet data exchanges centers around Pacific Rim) . Companies include local startups as well as Mainland companies wanting to establish presence here. Partner Rick Cho: "Act 221 is helping to lure some highquality tech firms to Hawaii." Per Cho, company prides self on identifying opportunities overlooked by other investors; ability to invest in any stage of development (early to late) and tailor investments to capital structure needs of founders, shareholders (equity, structured debt with conversion features, etc.). Upbeat Cho is "quite optimistic about the outlook here" for local VC investing......... International Venture Fund LP launched two years ago with assistance of HSDC, invests across Southwest, CA, HI; significant portion of fund portfolio currently invested in five local companies (up from three last year): HotU, 4Charity , Hawaii Biotech , Assist Guide and Kona Bay Marine Resources . Mg. Dir. Kirk Westbrook: "These are challenging times, but we remain optimistic about the potential of high tech in Hawaii. The new business ideas we see coming from Hawaii continue to improve in quality. There's a 50-50 chance we'll be adding another investment in Hawaii in the next 12 Organization Type of Capital Contact Comment HMS Hawaii Fund Size: $10 MM Early stage VC Bill Richardson, Partner Dick Grey, Partner 808-545-3755 bill@hmshawaii.com Focus: telecom, info. technology, aquaculture. (Fully invested) Licensed SBIC HMS Investments Fund Size: $2 MM Early stage VC Same as above Focus: Same as above (Fully invested) HMS Investments II Fund Size: $1 MM Early stage VC Same as above Focus: Same as above (Fully invested) HMS Hawaii III Target Size: $75 MM (leveraged) Early stage VC Same as above Focus: Same as above Applying for SBIC license. Hawaii Venture Fund LP Fund size: 500K Early stage VC Mike Coy, Manager 808-573-0001 coymj@viahawaii.com Focus: Fully invested in Medisys. International Venture Fund I LP(Invencor) Fund size: $15.25 MM Early stage VC Debra Guerin Kirk Westbrook Dick Harding Dan Macuga 650-330-1210 kirk@invencor.com Focus: Diversified; HSDC investment $4 MM Pacific Venture Capital Fund size: $1.2 MM Early stage and expansion David Perkins 808-521-6502 dperk@lava.net Focus: Diversified Licensed SBIC; not actively seeking investments currently Tangent Growth Hawaii Fund size: $40 MM (SBIC leveraged) Later Stage Mezzanine and Equity Mark Gilles, Principal 415-392-9228 Ext 230 mgilles@tangetfund.com Focus: Diversified; San Francisco-based. Licensed SBIC PacifiCap Group LLC Fund size: $30 MM Early to late stage VC Jeffrey Au 808-440-2725 Rick Cho 808-440-2727 rcho@pacificap.net Ted Liu 808-440-2777 tliu@pacificap.net HSDC commitment is $3 MM UH Angel Network Angel fund Prof. Robert Robinson robinson@cba.hawaii.edu Founded 2002\. Includes 30+ investors each capable of making min. $50K-$100K investment. months.... From a contrarian's perspective, the disruptive nature of these economic times are eliminating the feeling of employment security for some technology workers. To those workers, I say - it's a great time to start a new company. What do you have to lose?" make contact Correspondence: Marissa Matsuda Corporate Communications Officer City Bank 201 Merchant Street, 12th Floor Honolulu, HI 96813 Phone: 808-535-2586 Fax: 808-535-2524 tigrnet@hawaii.rr.com HH AA WW AA II II -- FF OO CC UU SS EE DD VV EE NN TT UU RR EE // AA NN GG EE LL FF UU NN DD SS (( 99 // 22 00 00 11 )) THE $2.7BILLION TIGR I UH R&D •$142 million Total UH research grants received FY 01-02\. I Ocean Science and Technology •$117 million For 2000\. DBEDT study. 1,350 employees (FTE) I Biotechnology •$320 million 1999 est., (operating budgets). Job count: 1,700 F/PT employees. I Astronomy •$145 million FY 2001 statewide direct operating expenditures. Job count 2001: 796 workers. Source UHIFA. I Internet, Computer and Software services •$600 million For 1998, HTDC survey estimate. Job count 1998: 7,538 workers. I Film and Television •$136 million "Direct expenditures, 2000\. Est. job count, 1999: 4,190 workers. Source: study by Film Offices of the Hawaiian Islands. I Diversified Agriculture • $357 million Farm value 2000\. State Dept. of Ag. Job count 2000: 5,600 workers. Figure does not include sugar and pineapple crop value. I Aquaculture •$34 million 2000, State Dept. of Agriculture: commercial production, research, tech transfer. Job count: 850 workers. I Educational Tourism •$181 million DBEDT estimate, 1997, Hawaii public and private colleges and universities, vocational/technical schools. 12,250 out-of-state students. (excluding vocational, technical).