(FORTUNE Small Business) – Netting Credit Criminals

Frustrated because you have to deal with "credit criminals"--clients who never pay your bills on time? You are not alone. About 20% of small business customers fit this description, according to national credit bureaus. Recognizing the problem, the National Credit Group, a reseller of credit information, has ventured with Dun & Bradstreet and Experian Business Solutions (formerly TRW) to launch ncgcredit.com. The user-friendly site, tested by FSB, allows you to download credit reports on potential customers--including payment history and any liens, judgments, or collection issues pending against the company--for $40 to $85, depending on how detailed a report you require. In addition, subscribers can get bill-collection services online and accounts-receivables insurance. It is underwritten by giant insurer AIG.

Open Mike

These days a growing number of entrepreneurs are making their spiels to investors like standup comedians on open-mike night. Capitalyst, a Boston-based venture fund, now hosts how-to fundraising seminars that are run like contests. Participants get exactly two minutes to tout their ideas. After hearing all the pitches, VCs select six semifinalists, from which three winners are ultimately chosen. Survivors go home with the ultimate prize: 45 minutes of face time with a bona fide venture capitalist from firms such as Draper Atlantic and ASAP Ventures.

Although Capitalyst (www.capitalyst.com) screens applicants before letting them enroll in the daylong event, they don't turn many away since the only prerequisite is an executive summary. The course costs $95 and is offered twice a year, in Boston during the fall and in the Washington, D.C., area during the spring. It's a great way to hone pitching skills at a time when the lending well has dried up.

Funds That Bind

If you want to tap into a large pool of investors who want to introduce you to their powerful friends, try the Colt Capital Group. Startups and technology companies need not apply. The private-equity firm, based in Westport, Conn., boasts a fund with around $100 million on hand to invest in small to midsized manufacturing and service businesses based in the Northeast. Unlike similar funds, Colt has a large group of 75 angels who are limited partners. Most run their own companies and can provide advice for portfolio companies. This includes everything from where to find strategic partners to where to go for additional funding. According to Daniel Levinson, the group's founder, the fund has already invested in six companies, including TBM Holdings, a maker of attachments for forklift trucks in Westport.

Still No. 1

Despite the dot-com blowout, VCs poured more money into the Internet than into any other sector in the first quarter of 2001. The total was 34.6%, down from 54% during the same period last year.

0.9% Consumer-Related 1.1% Industrial/Energy 2.8% Computer Hardware 3.1% Other Products 4.5% Biotechnology 7.2% Medical/Health 11.7% Semiconductors/Electronics 15.1% Communications & Media 18.7% Computer Software & Services 34.9% Internet Specific

Source: Venture Economics/National Venture Capital Association

Education Governor

Education used to equal power, but according to William F. Weld, it could also equal big profits, given that the size of the education market in the U.S. is $880 billion. That is why the former governor of Massachusetts co-founded the private-equity firm Leeds Weld & Co. Through the New York City-based firm's $160 million fund, Leeds Weld Equity Partners III, the group will invest in companies specializing in for-profit education and online training services. No passive investments here, though. The fund will mainly make buyouts or investments for controlling interests in companies.

As a former governor with connections, Weld says the fund not only gives portfolio companies cash but also offers industry expertise. Weld and Leeds have gleaned a wealth of experience sitting on the board of Edison Schools. In addition, the fund's advisors include two former Secretaries of Education, Lamar Alexander and Richard Riley, who can give you contacts to load in your Palm. So far, the fund has invested in eight companies, including $13 million in InterWise, an online distance-learning firm in Santa Clara, Calif.

Reported by Margaret Boitano, Jennifer Keeney, and Louise Rosen