Veteran team bringing VC infusion to Midwest

March 22, 2004

BY MICHAEL KRAUSS

If BankOne CEO Jamie Dimon moves jobs out of Chicago, how will they be replaced?

Credit former Democratic National Committee head and Clinton era political strategist David Wilhelm, 47, for stepping forward with an answer.

Wilhelm expects to close the first round of a $127 million dollar private equity fund in the next two weeks. Hopewell Ventures will focus on investment opportunities in the Midwest. This should mean more jobs from Ohio to Nebraska, including more tech jobs in Chicago.

"Look at the data for jobs created with venture capital backing," Wilhelm says. "They're higher paying, longer lasting" than jobs generated from existing employers. Wilhelm is straightforward, saying he intends to make money and create jobs in the region.

Wilhelm founded Woodland Venture Management to develop investment vehicles focusing on regions underserved by capital markets. Woodland's first fund, Adena Ventures, targets Appalachia. Hopewell is Woodland's second fund.

"It is absurd that more venture money goes into San Diego than into the entire Midwest," Wilhelm says. "We're going to take advantage of the lack of vision of the money managers on the coasts."

Wilhelm points to Hopewell's seasoned management team. "Bill Sutter, Tom Parkinson and Craig Overmyer built their track record making money investing in this part of the country. They are living proof there's great opportunity in the Midwest."

"Were looking for a diversified investment portfolio," says Sutter, who has 19 years in private equity and cut his teeth at Mesirow Financial. Sutter sees Hopewell "having a leveraging effect," drawing capital into the region. Investments in health-care devices and information systems could be on the dashboard.

Regionally focused venture funds are "very appropriate," says Robert Lepkowski, VC in Residence at the Northwestern University ITEC in Evanston. Lepkowski, who began his career helping grow Boston's technology base, adds, "The concept is absolutely the right way to go."

Trustworthy security

Microsoft's chief security strategist, Scott Charney, 48, arrives tomorrow to headline the Executives' Club conference on computer security.

Charney was the leading federal prosecutor of computer crimes in the 1990s, handling most major hacker cases from 1991 to 1999. He served as chief of the Computer Crime and Intellectual Property Section in the Criminal Division of the U.S. Department of Justice.

Charney helped write the book on approaches used in prosecuting cyber crime. He co-authored the Federal Guidelines for Searching and Seizing Computers, the Federal Computer Fraud and Abuse Act and the cyber crime sentencing guidelines.

"I got into cyber crime by accident in 1991," Charney says. After a stint as a prosecutor in the Bronx district attorney's office, he moved to general litigation at the Department of Justice in Washington. "Cyber crime was handled by the Fraud division. They had one person," Charney adds. "I sat down at my work station. I started creating subdirectories in DOS. My boss walked in. He was computer phobic, and asked what I was doing. He gave me one of those blank looks and asked me not to break the system.

"The assistant attorney general for the Criminal Division, Bob Mueller [now FBI director], knew cyber crime was going to be big. He called my boss, and said, 'Do you think you could do cyber crime?'"

Charney's boss replied, "I have a computer expert."

The rest is history.

"It was a fascinating time," Charney says. "It was a new field."

Watch for Charney to describe the need for better security, computer reliability, individual privacy and business integrity. "If people are going to embrace technology, they have to trust it," he says.

To protect yourself on-line, Charney suggests: Turn on your firewall, patch your software, run antivirus and back up your data.

Too much time online

Speaking before the Society for Information Management last week, Eric Shepcaro, AT&T's vice president, application networking, quipped, "You know you're an Internet junkie when you check your e-mail, see no messages, and then you click to check it again." On a darker note, Shepcaro reported a sharp rise in cyber attacks this past six months.


Michael Krauss is a Chicago-based tech-writer and consultant, and senior vice president for Hostway Corp., Chicago.


 

 ©2004 Marion Consulting Partners