Shaw credits much of the company's turnaround to the October 1999 hiring of Jim Moon, the founder and former CEO of Protocol Systems (Nasdaq:PCOL) from 1986 to 1997. During Moon's tenure, Protocol, another Shaw funded venture, had 40 consecutive profitable quarters and grew from $0 to $67 million in annual sales.

"Jim Moon is a rare combination - a very high-quality, business-oriented engineer with a strong understanding of how to sell and market product," Shaw said. "Where normally we would have had to hire several executives, we were able to hire just one who possesses the skills of many, and because of it we were able to attract additional capital."

Seeing the market potential for the product -- there are several hundred thousand transformers in operation around the world, most of which are being overused and under maintained -- Moon took the assignment and used a small bridge loan the month he arrived to improve the company's monitoring device, refocus its business plan and begin marketing the product. "The company had been focused on research and was populated by good scientists, but it lacked the ability to turn out products in quantity, reliably, inexpensively and repeatedly," Moon said.

Micromonitors' core product a sensor that is able to detect individually the presence of key fault gases that can lead to incipient failure or inefficient operation of transformers. The presence of each gas represents a different type of problem within the transformer, some of which can lead to catastrophic failures.

The old product had some glitches. The new product does not. Moreover, no other commercially available monitor can accurately measure the rise and fall of each of these gases. As a result, several major national and international utility companies have purchased the $25,000 product, and will purchase many more if all goes as planned. They will be purchased not only for monitoring, but also to find manufacturer defects in new transformers, which cost upwards of $2 million apiece but come with only a one-year warranty.

To further support its product, Serveron is expanding into a one-stop shop for utilities. Its product line will include not only monitoring products, but also Web-based monitoring services. "The industry is looking for the equivalent of a burglar alarm company, which not only provides the product and installation, but also monitors the results on a 24-7 basis and provides answers, directives and analysis," Moon said.

That's what this latest round of funding is about, to develop the Web-based component, a part of the puzzle that Moon and Shaw see as a multi-billion market in and of itself. "With the market being as large as it is and with the competitive response being at this particular moment not very great, there is the potential for Serveron to be one of Oregon's largest manufacturing companies, up there with Sequent and Tektronix and Mentor Graphics," Shaw tells GlobeSt.com.

Schreck, who also handled space needs for Moon during his tenure at Protocol Systems, says he and Moon have narrowed their choices for expandable space in the Sunset Corridor to four or five business parks with room to grow. Given the soft market conditions, Moon expects to get a screaming deal: "Each one knows they aren't the only game in town and that they'd better sharpen their pencils."