Southland Venture Funding Hits $123 Million, Survey Says

Investors, loaded with cash and spurred by an active market for public offerings, risked $123 million on young, promising Southland companies during last year’s final quarter, more money than they have invested in recent periods.

The amount invested is nearly twice the $62.2 million put into Southland companies in the last quarter of 1994, according to a quarterly survey by accounting firm Price Waterhouse.

The lion’s share of the venture capital went to 14 Orange County companies, which accounted for 75% of the funds invested in firms in Los Angeles, Orange and Ventura counties, according to the survey.

Venture funding is private money that is typically invested in new, young or growing companies. It is also used sometimes to finance corporate buyouts and invest in underpriced public companies.

The latest results continue a trend that started in late 1994 as venture capitalists began to make more money available to entrepreneurs.

Statewide and nationwide, more venture capital was pumped into growing companies in the final quarter of 1995 than in any of the last six quarters for which Price Waterhouse has conducted its survey. Investors put $874 million in California companies and $2.34 billion in companies across the country.

Most venture capital went to high-tech and biomedical companies, highlighting “the significant role of high-technology companies in the future of American business,” said Donald A. McGovern, who chairs Price Waterhouse’s high-tech group.

Silicon Valley and its high-tech entrepreneurs took the biggest chunk of the money nationally as 103 firms there collected $617 million, or 23% of the total amount of venture capital invested.

In Southern California, food was king. Venture capitalists provided $44 million, in part to finance an investment group’s purchase of hamburger chain Johnny Rockets Group Inc. in Irvine. They invested $15 million in Wolfgang Puck Food Co. in Los Angeles.

In San Diego, venture funding reached $101.2 million in last year’s final quarter, short of the $117.4-million peak during the second quarter but far ahead of the $79 million invested in 1994’s final quarter.

“The results reflect extraordinary confidence in the economy and in entrepreneurs,” McGovern said.