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O.C. BUSINESS PLUS | HEARD ON THE BEAT / SMALL BUSINESS

Venture Capitalist Has Hands-On Role

March 01, 2000|MARC BALLON | Marc Ballon covers small business and entrepreneurial issues for The Times. He can be reached at (714) 966-7439 and at marc.ballon@latimes.com

While many venture capitalists prefer limited involvement with firms they're funding, a 2-year-old venture capital firm wants more than just a board seat or two and an ownership stake.

Catalyst Capital in Newport Beach insists on running the show.

Catalyst's partners assume the positions of chief executive officer, chief financial officer and chief technology officer after making an investment, partner Phillip Langford said.

"Entrepreneurs need marketing, management and money," Langford said. "We bring all three."

Catalyst plans to invest mostly in local Internet companies, aiming to transform them into businesses worth $100 million that can be taken public or sold, Langford said.

Catalyst has so far invested $6 million in one company, USAutoNews.com of Newport Beach. USAutoNews, which features news and online vendors selling everything from brakes to seat covers, is expected to post $5 million in sales this year, more than a tenfold increase over 1999, Langford said.

Catalyst expects to invest in two more Orange County firms within the next three months, he said. But Catalyst will limit investments to a maximum of six companies annually to avoid spreading its resources too thin.

Information: (949) 955-5400 or http://www.catalystcapital.com.

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