Nina McLemore goes where few venture capitalists dare to tread: retail.
Most venture capitalists prefer to fund high-tech or medical companies, rather than businesses subject to consumers' whims. But Ms. McLemore said her retailing experience-she started a line of women's accessories for the Liz Claiborne fashion empire - helps her evaluate consumer-oriented businesses.
After getting her MBA from Columbia University, she started Regent Capital in New York in 1995 with $20 million. Regent has made nine investments, totaling $16 million.
Ms. McLemore is part of an expanding corps of lenders and venture capitalists that banks find themselves competing with-people who use expertise from the fields they cut their teeth in to finance entrepreneurs.
Retailing is "an attractive field for new business concepts-and fewer companies are interested in retail, so it presents an opportunity for us," Ms. McLemore said.
Regent Capital has invested in retailers such as Learningsmith, which sells educational children's toys; a chain of Italian restaurants; and an advertising company that covers the exteriors of buses with ads.
Venture capitalists that fund retailers are rare, said David Malm, a partner at the Boston-based venture capital firm Halpern, Denny & Co., which asked Regent to invest in Learningsmith.
"Of all the sectors venture capitalists are targeting, retail and consumer businesses are the least popular," Mr. Malm said. "There are firms that dabble in it, but few have developed a true expertise."
Regent Capital makes investments of $1 million to $3 million, and tends to invest in businesses owned or operated by women, which other venture capitalists may overlook.
"There is a growing number of businesses run by women who have honed their skills at other companies," Ms. McLemore said. "Traditionally, they have had a harder time getting financing."
Though institutional investors such as pension funds and insurance companies are the typical source of financing for venture capitalists, Ms. McLemore thought they would be reluctant to lend to a start-up like hers. So she asked her former business associates and friends to invest in her firm.
"The key is finding people who know you professionally and have respect for your business abilities," Ms. McLemore said.
Last year, Regent Capital began operating as a small-business investment corporation; such companies can borrow up to three-quarters of their capital from the federal government at low interest rates. Small-business investment corporations are private venture-capital firms, managed by individuals or banks, that are licensed and regulated by the Small Business Administration.
"Smaller businesses and a much broader array of businesses need the type of financing that SBICs provide," said Lee W. Mercer, president of the National Association of Small Business Investment Companies.