PHILADELPHIA - It's hard to imagine Norristown, Pennsylvania, as a magnet for new technology startups. A former industrial city on the outskirts of Philadelphia, Norristown has one of the highest poverty and unemployment rates in Southeastern Pennsylvania.

But it's precisely this type of location that Murex Investments, a Philadelphia-based venture capital firm, is encouraging its portfolio companies to consider. Murex is one of a new breed of venture capital firms that are generating financial returns while investing in local communities.

The latest example is DFT Microsystems, a "new economy" business that develops and manufactures high-tech testing modules. These modules test semiconductors used in everything from computers and cell phones to hearing aids and pacemakers.

DFT landed in Norristown because Murex identified the company's technology as having tremendous future market potential, and believed that the company could play a major role in revitalizing this distressed community by attracting high-tech talent and resources.

To bring DFT to Norristown, Murex participated in the company's first round of venture capital financing, investing $400,000 from its fund, and boosting the total raised to $5 million.

Murex then helped DFT set up shop in a 2,000-square-foot Norristown facility that formerly housed state government offices. It is now home to DFT's management, administrative staff and, eventually, product testing.

As part of the relocation effort, Murex helped DFT gain state funding for job training and support. Then, Murex provided DFT with a $35,000 operational assistance grant to produce a study that determined how best to position its inventive technology in the marketplace.

The grant came from a little-known Small Business Administration program designed to stimulate economic development in low-income areas. Murex administers the grant monies, making them available at no charge to qualified companies.

"We wouldn't be in Norristown if not for Murex," says Alex Oscilowski, president and CEO of DFT Microsystems. "Norristown turns out to be a prime location, geographically centered with access to world-class universities and research. We can be part of a high-tech renaissance in the area, connecting technologies, researchers, and universities through our Norristown offices."

That dream is shared by many, including the Commonwealth itself. "Murex is doing great things for the Commonwealth of Pennsylvania," says Richard Overmoyer, Director of the Pennsylvania Office of Policy and Technology Investment. "Murex's unique investment model provides funding for innovative new companies that are building value and providing jobs and growth in the Commonwealth's inner cities and low-income communities."

Altruistic intentions aside, it was the attractive business implications of DFT's technology that first interested Murex. "First and foremost, an investment needs to make financial sense," says Tami Fratis, Managing General Partner of Murex Investments. "DFT is developing groundbreaking technology that will create a cost-effective new solution in the semiconductor testing industry, capable of capturing a large share of the market."

DFT's technology complements and efficiently extends the capabilities of large, expensive testing equipment that semiconductor companies use to guarantee the performance of their chips.

DFT's technology also shrinks the components in these devices to the size of a cell phone, yet they cost a fraction of the price of existing testing equipment. The company's short-term goal is to develop and introduce testing solutions that can be embedded into the chips it's testing--an industry first--dramatically streamlining the testing process and reducing costs.

The operational assistance grant from Murex let DFT undertake a specific research project to identify targets for its products. Similar grants are available through Murex to companies that are located in, or are willing to relocate to, low-income areas, such as Norristown.

"The Operational Assistance Grant Fund is novel," says Joel Steiker, Director of Business Development for Murex. "Early and late stage companies can use Operational Assistance Grants to fund a range of discrete projects, such as marketing, patent protection, management recruitment, and more. The end game is to create real economic wealth, and in the process, rebuild those areas most in need of development."

Murex Investments

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