$479,000 Public/Private Initial Investment is 'Music to Ears' of Local Audio Technology Startup
City's EmTek Fund and Tech Coast Angels Jointly Provide Working Capital to Diver Entertainment Systems, Inc.

SAN DIEGO - As venture capital equity remains elusive for most smaller startup companies nationally, local entrepreneurs are finding a more supportive environment through San Diego's rich network of public/private partnerships. Effectively utilizing these opportunities, local technology startup Diver Entertainment Systems, Inc. today celebrated the closing of its $479,000 initial outside investment round with several partner business development support organizations, including the City of San Diego's Emerging Technologies (EmTek) program and Tech Coast Angels, a local angel investor group affiliated with UCSD CONNECT.

The EmTek Fund is a public revolving loan fund managed by the City's Community & Economic Development Department that participates alongside outside private equity investors to provide pre venture capital stage growth capital to promising San Diego County entrepreneurs. The City provided $150,000 in funding to the company and served as a catalyst to help the company secure additional funding from private sources.

"Diver Entertainment Systems is yet another success story in our growing EmTek portfolio" said Hank Cunningham, director of the City's Community and Economic Development Department. "We look forward to providing future EmTek funding to aid other aspiring entrepreneurs who have a great idea, but face difficult challenges in raising outside debt and equity capital from conventional financial institutions."

In addition to EmTek funding, Diver Entertainment Systems also leveraged $329,000 in matching private capital investment, including $155,000 from angel investors. Most of this angel funding was provided by Tech Coast Angels, which has placed $49 million in 74 companies since it was founded in 1997.

"This is what makes San Diego so unique and different, the variety of organizations and resources and the way they work together to provide a support foundation for emerging San Diego companies," said Jack Florio, Vice President, Communications for the San Diego chapter of Tech Coast Angels.

Diver Entertainment Systems has developed patented high fidelity, underwater audio systems utilizing the latest in MP3 memory technology. The systems have been designed to a 200-foot depth rating and provide a feature rich, portable way to have stereo fidelity while underwater. Uses for the technology include audio soundtracks for dives, guided underwater tours, or recorded dive manuals that could be listened to while wearing dive equipment, among others.

"The funding we received from EmTek and the Tech Coast Angels has been instrumental in our company's launch of the H2O Audio™ products to the water sport markets," said Kristian Rauhala, Chief Executive Officer of Diver Entertainment Systems. "These programs are great tools startups can use to access early-stage capital and I encourage aspiring entrepreneurs to contact these available resources."

Diver Entertainment Systems was founded in 2002 by Rany Polany, Kristian Rauhala and Carl Petterson, three recent graduates of the MBA program in Entrepreneurship within San Diego State University's College of Business. Diver is also now bringing on the first Fellow from a joint Tech Coast Angels and SDSU Entrepreneurial Management Center Fellowship Program, which was just launched last month.

"We're very pleased that a start-up company founded by SDSU alumni from our entrepreneurship program has secured EmTek financing," said Dr. Sanford Ehrlich, executive director of the University's Entrepreneurial Management Center. "Our Center strives to design hands-on learning experiences and programs to prepare students and alumni to successfully launch their new ventures. Through our collaboration with EmTek and the San Diego Tech Coast Angels, we are pleased that DES has completed its first round of funding."

For more information on the EmTek Fund and other City of San Diego business assistance programs, visit the City's web site at www.sandiego.gov/cpci or call the Community and Economic Development Department at (619) 533-4233.

For more information on Diver Entertainment Systems, Inc. visit their web site at www.desworldwide.com or contact Kristian Rauhala at (800) 708-6080.

For more information on UCSD Connect and the Tech Coast Angels visit their web sites at www.connect.org and www.techcoastangels.com or call UCSD Connect at (858) 964-1300.

For more information on SDSU's Entrepreneurial Management Center visit their web site at http://www-rohan.sdsu.edu/dept/emc/ or call Keely Bamberg, the EMC Director of Intern Programs and Outreach, at (619) 594-0560.

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