Business Spotlight: Quest Capital Alliance LLC

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Springfield isn't exactly awash with merchant banks or venture capitalists who are willing to invest in small businesses. That's one of the reasons Steven Fox believes Quest Capital Alliance LLC will succeed. |ret||ret||tab|

"The Springfield market is fueled by small businesses," said Fox, who serves as the company's CEO and general manager. "Most venture capital companies from outside our market don't want to come in here and work with small businesses because it's not cost-effective. What we've done is create a niche for ourselves by bridging the gap between small- and medium-sized businesses and the bank."|ret||ret||tab|

Fox, who has more than 20 years of experience in the financial services industry, was serving as the senior lender and market executive for Bank of America in Springfield when he began talking to Jack Stack and Jay Burchfield about opening a merchant bank. |ret||ret||tab|

Stack, who is CEO of SRC Holding Corp., and Burchfield, who is the chairman of both Trust Company of the Ozarks and City Bancorp, which is the holding company for The Bank, were intrigued by the idea, and in January 2001, they founded Quest Capital Alliance LLC.|ret||ret||tab|

Like most merchant banks, Quest Capital Alliance uses a pool of capital to invest in companies and businesses that offer the opportunity for a high rate of return over a defined period of time, which usually ranges from five to seven years. Quest Capital Alliance also helps foster growth in the companies it invests in by becoming involved in the companies' management, strategic marketing and planning. |ret||ret||tab|

Initially, Fox, Stack and Burchfield directed the company's operations. In time, however, four additional members were added to the company's management committee, which comprises Fox, Stack, Burchfield, Ron Neville, Dennis Shep-pard, Mary Kay Meek and Steven Harrell.|ret||ret||tab|

Quest Capital Alliance has 47 investors and $6 million in funds. According to Fox, those investors range from individuals to corporations to area banks. |ret||ret||tab|

The companies Quest Capital Alliance invests in also reflect its commitment to diversity. Those companies include:|ret||ret||tab|

ArticShield of Tulsa, Okla., which makes high-tech cold weather clothing; |ret||ret||tab|

Decorize Inc. of Springfield, which delivers home furnishings directly to retailers;|ret||ret||tab|

Global Energy Group Inc. of Odessa, Fla., which manufactures energy-efficient heating and air-conditioning systems; |ret||ret||tab|

SiriCOMM Inc. of Joplin, which is developing wireless applications for the trucking and transportation industry;|ret||ret||tab|

Teen Studios Inc. of Dallas, a new retail concept for teen and preteen girls, which has backing from Seventeen and Girls' Life magazines;|ret||ret||tab|

VentureQuest Ltd. LLC of Denver, a consulting, education and training company that helps companies create profit by capitalizing on people, market opportunities and new business ventures; and|ret||ret||tab|

Quest Manufacturing of Strafford, which manufactures air tanks.|ret||ret||tab|

"We not only look for diversity when investing in a company, we look at where the company is in terms of their development," said Fox. |ret||ret||tab|

"Some companies are in the concept stage. Others, like Quest Manufacturing, have been making products for years."|ret||ret||tab|

Fox said investing in Quest Manufacturing, which was formerly known as Midwest Products Inc., has proven to be a rewarding experience. |ret||ret||tab|

On July 1, Quest Capital Alliance, SRC Holding Corp. and Quest Manufacturing's management team purchased the manufacturing plant's assets for $1.3 million. |ret||ret||tab|

Midwest Products had been a subsidiary of St. Louis-based Huntco Inc., which filed for bankruptcy following the Enron debacle. Midwest Products, which shut down in February, had 150 employees at its peak, Fox said. |ret||ret||tab|

"Our ultimate goal is to make a profit for our investors," Fox said. "But it's also nice to put people back to work. About 25 people work there right now, and I expect that number will grow as the company wins back more customers."|ret||ret||tab|

Fox said Midwest Products provided an ideal scenario for Quest Capital Alliance's investors. |ret||ret||tab|

However, ideal investment scenarios aren't easy to come by.|ret||ret||tab|

"We started this company in a challenging market," Fox said. "However, that's actually created some opportunities for us because there is a scarcity of capital right now."|ret||ret||tab|

Indeed, Fox doesn't seem to have much trouble finding small- to medium-sized businesses that need investment capital. In fact, local banks referred some of the companies Quest Capital Alliance has invested in. |ret||ret||tab|

"We get leads from a variety of sources, including banks, CPAs, attorneys and other venture capital firms," Fox said. |ret||ret||tab|

Fox is focused on maximizing the performance of Quest Capital Alliance's first fund. Several of the companies that Quest has invested in are already trading publicly, which will give investors an easy exit strategy. However, Fox said, a second Quest Capital investment fund is on the horizon. |ret||ret||tab|

"We've seen so many deals, and a lot of the deals we see are beyond the scope of what Quest can do," Fox said. "Our plan was always to launch additional funds."|ret||ret||tab|

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