@LARGE

Deep impact

By Scott Kirsner

The Riverfront room at the Royal Sonesta in Cambridge was set for lunch, and the tables were packed with tech entrepreneurs and investors. Rick Villars, the vice president of Internet and e-commerce strategies at the research firm IDC, was up at the podium, talking about meteor strikes.

It wasn't until a meteor hit the PC industry in the mid-80s, rendering brands like Kaypro, Osborne, and Commodore extinct, that PC sales and adoption really started to skyrocket. ''The most impressive growth came after the meteor struck,'' Villars said, displaying a PowerPoint graph that backed him up.

Last year, obviously, was when the Internet industry and the meteor collided. ''Most Web spending and spending on Web infrastructure,'' Villars went on to predict, ''will take place after the meteor strike.''

Villars might be on to something. Just look at all the wonderful stuff that started happening on Earth after the meteor got rid of the dinosaurs: homo sapiens, drive-in movies, Polartec fleece, and Pizzeria Regina.

Villars was speaking at the Davenport Capital Ventures Entrepreneurs' Summit earlier this month. It was a day that made it seem as if the dust cloud from this last meteor strike might finally be clearing.

''The moaning and groaning is over,'' said David Teitelman, CEO of eTrue, a Southborough company that presented at the Summit. ''By no means are we sitting in a bed of roses now, but the `woe is me' period is over. More meetings are starting to happen, and investors are starting to put some of their money to work after spending a lot of time last year and early in 2001 performing triage on their portfolio companies.''

Patrick Davenport, managing general partner of Davenport Capital Ventures, said he wasn't under the impression that all 17 of the companies that presented at the Summit were home free. ''Some of them are happy just to be surviving and showing some progress,'' he said. ''It's an endurance game, trying to survive until conditions change.''

He added that companies looking for a second round of funding, where they haven't yet begun pulling in much revenue, are in an especially tough spot. Even raising a second round at a company valuation that is half of the first round - or less - is ''good if you can get it,'' Davenport said.

In hallway conversations, company founders admitted they were trimming expenses every way possible and dealing with slower rollouts than they'd initially imagined. But some were buzzing about impressive growth rates, customer deals in the works, and potential acquirers. Davenport told me that one portfolio company, Spike Broadband, had been talking to investment bankers and was ready to go public as soon as the markets permit, and two others, eTrue and Great Barrington-based HotRoof, had attracted interest from prospective buyers. (ChoicePoint and EMC, respectively.)

''The dot-com travesties have been so over-discussed,'' said John Roland, president of FastChannel Network, a Net-based advertising management company in Belmont. ''Now, people are back to talking about the basics of building a business: trying not to let expenses grow, what's your strategy for raising capital, where are you getting your technical employees.''

Roland said that FastChannel was hoping to raise between $5 million and $7 million this year. While the company's revenues from helping ad agencies manage campaigns across multiple media have been growing at 30 percent month-over-month, Roland was concerned that venture capital firms wouldn't be receptive. ''So we're dealing with five or six strategic partners, who could be potential investors,'' he explained.

Teitelman said he would be looking to raise a second round of $12 million by this fall, and he didn't seem too worried about it. His company offers authentication and verification services over the Net, using biometric devices like face scanners and fingerprint readers. ''When you speak to people at events like this one,'' he said, ''you can see that the attitudes are getting better. Earlier this year, people were still coming out of the bunkers. We're on a climb. There are new investments being made.''

Davenport, who manages a $120 million fund, said that earlier this year he wasn't evaluating any new investment opportunities, but that he'll make two new investments in the next month or so. ''In general, we were really focusing on the existing portfolio.''

If you look hard enough, there are some signs that the dust cloud is starting to dissipate. If it takes a long time, ''we'll have fewer survivors nine to 12 months from now, and I won't be so happy,'' Davenport said.

But however long it takes, the companies that come through this extinction level event will be rewarded with lucrative growth opportunities.

The need for 3D speed

As far as Marina Hatsopoulos is concerned, no qualifiers are necessary when describing Z Corporation's new 3D printer: ''There is nothing faster anywhere, made by anyone,'' she boasts.

Burlington-based Z Corp. unveiled the Z 406 last week at the Rapid Prototyping and Manufacturing show in Cincinnati. Using data from a CAD (computer assisted design) program, it can produce a three-dimensional object the size of a football in just two hours - roughly 10 times faster than rivals' printers. The new printer uses four standard Hewlett-Packard inkjet print heads (the previous model used just one) to spit out either dental plaster or a mixture of cornstarch, sugar, and fiber, which hardens into a solid object.

And unlike other 3D printers on the market, Z Corp.'s can produce objects - things like sneaker prototypes, animation figures, or machine parts - in 64 million different colors.

Hatsopoulos says speed is important to Z Corp.'s customers, companies like Nike, Fisher Price, and BMW. ''If you're in a design cycle, you don't want to wait until the next day to see what you've got,'' she says. ''Time is of the essence. With the 406, you've got something that acts more like a laser printer.''

The new printer sells for $67,500. Earlier this year, the company entered into an agreement with Xerox Engineering Systems to help sell Z Corp.'s products in Detroit and Chicago. In the next few months, Z Corp. will be working to expand that partnership domestically.

''We haven't seen a slowdown [in sales as a result of the lackluster economy],'' Hatsopoulos says. ''We think the total market for 3D printers is about $1 billion, and we're only at 1 percent penetration. When you're at that point, you don't see the effects of fluctuations in the economy as much.''

Scott Kirsner is a contributing editor at Wired and Fast Company. He can be reached by e-mail at kirsner@att.net.

Scott Kirsner is a Boston freelance writer and a contributing editor at Wired and Fast Company magazines.