Any other business: Boffin who fixes dates for shy inventors: Lucius Cary

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The Independent Online
LUCIUS CARY, hi-tech enthusiast and former hamburger restaurateur, is the founder of Venture Capital Report, the monthly magazine that tells the rich looking for investments about entrepreneurs looking for capital.

Every year hundreds of businesses approach VCR, although it turns away more than it accepts for the five-hour appraisal procedure before they can be featured in the magazine.

Companies in the current issue include a biotechnology business with an early diagnosis kit for Down's Syndrome, a Swiss local newspaper and a British-run cartoon studio in Lithuania.

Located in Henley-on-Thames - mainly so that Cary can go home for lunch - VCR is the best-known name in its field in the UK and Europe, along with its spin-off, the Guide to Venture Capital. This gives entrepreneurs detailed data on available funds, investment criteria and past deals.

The book, now in its sixth edition, has made Cary a familiar, though not entirely popular figure in the venture capital industry. 'Venture capitalists ask entrepreneurs everything, including how many wives they have had, but they hate revealing themselves; it's part of the British thing about secrecy,' he explains.

Cary, 47, is happy to talk about his own record as an investor. After studying engineering at Oxford and doing an MBA at Harvard, he wanted a quick way to raise enough capital for a traditional metal-bashing business. He started Cary's, a hamburger restaurant, in Bristol in 1972. No one knew what a hamburger was, he says, and he had to give away 10,000 free meals so they could find out.

Cary put in pounds 1,000, borrowed from his bank, Coutts. The other pounds 26,000 he raised with great difficulty from interested entrepreneurs, through newspaper advertisements.

'I had every advantage of friends, school and universities and I found it pretty hard to get the money. So I thought there had to be a better mechanism for raising capital.'

After paying off the original investors, he sold what was now a three-restaurant chain for pounds 115,000, forgot about metal- bashing and set up VCR.

VCR has only recently become profitable, after 16 years. Hamish Stevenson, a burly South African with a Ph D in management, who now owns half the business and runs a small investment fund himself, has doubled its subscriptions to 620 in the last couple of years.

In the meantime, however, Cary has managed to raise four funds, totalling pounds 1.5m, from venture capital firms Apax Partners and Larpent Newton, to invest in hi-tech businesses. The funds typically give him a stake of 20 per cent of all capital gains after the initial investment has been paid back.

'Lots of the investments I make fail, as you would expect in such a high-risk area. You make money from the three or four that do well,' he says.

Of the three Apax Seed Capital funds, the first has repaid the original sum, and currently contains two companies that are not doing well but have some interesting technology, Cary says. The most recent is 'looking terrible'. But the middle one has repaid two-thirds of its initial investment, has sold two small firms to public companies here and in the United States, enjoys a small profit at Dextra Laboratories (a former research wing of Tate & Lyle), and has high hopes for the jewel in its crown, Integral Vision.

Integral Vision produces software and associated hardware that allow a computer both to 'see' and to interact with industrial robots and other equipment. Ford, for example, uses the kit to check piston assemblies emerging from machining before they go into car engines.

Compact-disc makers including EMI use Integral Vision systems to check for errors in the silkscreen printing of the information on the disc's centre. Brewers use it to check that barrels are not leaking.

Unlike conventional optical character recognition, the system can read and analyse images regardless of which way up the object is. This allows it to be used for quality control in many kinds of manufacturing process. The company reckons its product is more easily customised and more user-friendly than other vision analysis software.

When Integral Vision was featured in VCR in 1989, after it had already made sales to Ford and others, Cary was amazed that it attracted no interest, and he invested pounds 30,000 for what is now an 11 per cent stake.

The three founders, led by Frederico Margalhaes, had all worked together at Cranfield Institute of Technology. The company started in 1987, began making a tiny profit in 1991 and is set to make pounds 125,000 on turnover of about pounds 2.5m in the current year. 'It could have pounds 50m to pounds 100m sales,' Cary believes. Integral Vision is certainly worth several million pounds already, though the founders would not contemplate selling.

Cary's father, who was the youngest permanent under-secretary in the Civil Service of his day, made harpsichords in his spare time. And Cary, tinkering in his father's old workshop, resembles a mandarin, a don or a boffin more closely than a hi- tech tycoon.

He enjoys technology, reads New Scientist avidly, is completely uninterested in marketing and believes good people and good inventions deserve to have money invested in them. Integral Vision looks destined to prove him right.

(Photograph omitted)

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