Ventured and gained
The crazy chances he was forced to take growing cherries groomed John Pariseau to manage a young, high-risk investment corporation based in Spokane.
The venture, WIN Partners LLC, began in 2003 making equity investments in promising start-up companies in Eastern Washington and North Idaho. WIN Partners receives preferred stock in exchange and its members generally sit on the companies’ boards of directors.
In November, WIN Partners reached an important milestone. It closed its fund to new investors, having raised $3.5 million in a silent capital campaign.
So far, it’s spread a little more than $1.3 million among eight bio-tech and info-tech companies launched by area entrepreneurs. Entrepreneur Fred Brown, who’d already founded two successful area high-tech companies, enlisted Pariseau and investor Jim Simmons to help launch WIN Partners, short for Wings of the Inland Northwest.
A total of 54 accredited investors, as well as Washington Trust and America West banks, belong to the group.
Members are always on the look-out for fledgling companies with “large upside potential” in which to invest, Pariseau said.
“It’s more an art than a science and there’s no objective way to do this,” he admitted. “We might not do a deal for a couple of months and then do three all at once.”
Pariseau said the trickle-down will nourish the region’s economy as small companies grow up, hire and market products.
“A fund like WIN Partners serves an essential and critical purpose. Without it, we’re going to have a lot of difficulty,” said Lewis Rumpler, who’s striving to raise millions of dollars for the Institute for Systems Medicine, a proposed bio-medical research center in Spokane.
WIN Partners is one of a handful of such investment groups in this area. Their support can mean the difference between death and survival for a new company, experts say.
Most larger funds won’t let entrepreneurs into the boardroom until they’re so far along they’re seeking about $5 million in support, Pariseau said. WIN Partners bridges the gap between first-stage funding, usually from family and friends, and the big bucks young companies need down the road.
Steve Tabacek, president and CEO of IT Lifeline in Liberty Lake, approached WIN Partners for growth capital awhile back. He liked the group’s “holistic approach.
“They looked at it in terms of what it’s really going to take for this business to grow and thrive and they realize it’s not a quick turn-around. It just seemed like more of a mature approach” than Seattle funds that expected earlier profits, said Tabacek, whose company handles data storage and recovery.
Having WIN Partners members on a board of directors is a bonus, said Buck Somes, CEO of GenPrime, maker of Prime Alert, a bio-detection system that can sense toxins such as anthrax and ricin.
“It’s all said in their name — WIN Partners,” said Somes. “We see them as a partner. They’re on our team. Their manager (Pariseau) sits on our board and he’s been a big asset.”
Pariseau said WIN Partners expects to wait five to 10 years for respective investments to return profits.
“So far we haven’t had any liquidity events,” he said. “But a number of our companies have made good progress so we can look at what we’ve done without regrets. I think 2007 will be an important year for a number of our companies.”