To the 28-year-old waitress at some cheesy Italian restaurant on Fifth Avenue, only a few people should be much more relevant than Robert M. Jaffe, the 43-year-old venture capitalist on the 10th floor of 4370 La Jolla Village Drive, near UTC, although she probably never heard of him.
    She might, after all, wind up as a 32-year-old manager of a Souplantation restaurant. Jaffe's company, Sorrento Associates Inc., has directed hundreds of thousands of dollars into Souplantation's parent company in Rancho Bernardo, Garden Fresh Restaurant Corp., helping Souplantation to grow.
    Almost as likely, a 28-year-old may wind up working as a technician for Corvas International or Depotech Corp., La Jolla Pharmaceutical Co. or Digirad Corp., all companies assisted by Sorrento Associates' investments. If she remains a waitress, she's likely to serve employees of those employers, who would not exist without venture capital.
    Or, finally, she may find Bob Jaffe relevant to her life because he's still single again, a nice Jewish boy who works too hard. Beware: "It is the rare spouse in Southern California who understands and endures the emotional drain and sacrifice of building a new business," Jaffe advises his investors.
    Jaffe reached a milestone a few days ago as he distributed the final dollars in his first venture capital fund, the 10-year-old Sorrento Ventures I. Concurrently, he closed SVI's replacement, Sorrento Ventures IV, with commitments of $21 million at $250,000 minimum per investor. (SVI required a $100,000 minimum investment.)
    Obviously, Jaffe is relevant to his investors, including Fred Applegate and Art Nicholas, the founders of Nicholas-Applegate Capital Management, businessman Malin Burnham, architect Gordon Carrier, maritime industrialist Art Engel, schmata maven Stan Foster, developer Doug Manchester, Peter Preuss, Forrest Shumway, Bob Lichter, Tawfiq Khoury, Ron Fowler and Gary Sabin, to name a few.
    And in between the 28-year-old waitress and the mature investors are legions of yuppies who need to know what Bob Jaffe knows, even if they don’t have much money.
    "Venture capital is a mystery to people," Jaffe suggests. "But you don’t have to be an actor or actress to enjoy a movie. You don’t have to be an investor to appreciate venture capitalism.
    "People truly enjoy success and learn from failure. So many people look now to how wealth is created, and wealth is created from creating business, not simply from working in established businesses. Capital gains rates are as low as 10 percent now. I think more and more people are looking, people who had not looked 10 or 12 years ago, to create a business."
    What distinguishes Jaffe, a former Wall Street executive with Goldman Sachs and Salomon Brothers, is his decision to start a San Diego business that invests primarily in San Diego businesses. With about $115 million of capital currently under management, his history of investments is a microcosm not of mostly San Diego businesses, but of mostly good San Diego businesses. Jaffe thinks Ford Ventures, with about $55 million invested locally, is his nearest rival in terms of purity of San Diego investments. Enterprise Partners opened a San Diego office in 1985, two years before Jaffe, but its $300 million of capital is invested throughout California.
    Some investments have not done well, of course. Sorrento Ventures I invested $560,000 in Pacific Industrial Catering Co. in 1990 and it returned nothing upon liquidation of the investment in 1992. SVI's $86,000 investment in Telios Pharmaceuticals Inc. in 1988 yielded only $15,000 in 1995 when struggling Telios was merged into Integra LifeSciences Corp.
    But for every bad investment there were two or three good ones that more than made up for the loss. In its 10 years, SVI put $8.24 million at risk and distributed $27.41 million for a 38 percent average annual return. SVI even made money on some companies that didn’t turn out as planned, such as Gensia Pharmaceuticals, from which SVI earned a 395 percent return by buying in 1990 and selling in 1991.
    About 20 percent was invested in early-stage companies, 30 percent in late-stage and half in mid-stage firms. By industry, SVI was invested 47 percent in health care, 25 percent in electronics, and 28 percent into retail or consumer businesses.
    Sorrento Ventures II was founded in 1992 with $13 million in commitments, Sorrento Growth Partners I in 1994 with $33 million, Sorrento Ventures III in 1996 with $46 million, and then Sorrento Ventures IV opened and closed a couple of weeks ago with $21 million pledged.
    Among Sorrento Associates' successful investments: Depotech, Hot Topic, Infrasonics, Lam Research, Medication Delivery Devices, Mycogen, Idec Pharmaceuticals, Primary Access, Vical, Combichem, and Digirad. Then there are other investments so new, made in 1997, they have no history, such as $200,000 put in Akos Biomedical, $857,000 in Catheter Innovations, $342,000 in Desmos Inc. and $330,000 in Mitokor.
    All the money available to Jaffe is not invested immediately, but rather as the funds are needed by the businesses targeted for investment. Sorrento's loss ratio is about 1.2 percent, which is less than the 2 percent a commercial bank would find acceptable to write off annually, and less than the typical venture capitalist's loss ratio. Sorrento's returns are in the top 25 percent in the country. Its target is to earn about 300 percent over a three- to five-year life of an investment.
    The 29 companies that Sorrento Associates has held in its portfolios account for something like 10,000 jobs. That's relevant to anyone who can read.