Inc. Magazine

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In July of 2003, Inflexion Partners -- an upstart VC fund founded in Gainesville,
Fla., in 2002 -- had contributed to WiDeFi's first round of financing, which totaled $1.6 million. But the fledgling outfit didn't have deep enough pockets to pony up for a second round. Instead, Inflexion's general partners lined up a deal with two larger VC firms, Aurora Funds of Durham, N.C., and Axiom Venture Partners of Hartford, Conn., which agreed to commit more than $6 million.

Matt Harris, for one, worked at Boston behemoth Bain Capital before founding Village Ventures in Williamstown, Mass., in 2002. Harris's outfit, like many new venture capital firms, focuses on companies in regions that are shunned by traditional funds, like western Massachusetts. Other things remain the same. Just like the big outfits in Silicon Valley and Boston, small-town VCs focus on industries that boast high margins, in particular technology. Village Ventures, for instance, invests in companies in the technology and life science fields. And, while these young upstarts may be less formal than their predecessors, they still have high standards. In other words, business owners looking to score financing from one should come armed with a solid business plan and a top-notch management team.