Venture capital cools in state

But $106 million still makes Q1 solid, report says

James Paton, Rocky Mountain News

Monday, April 23, 2007

Venture capital activity in Colorado in the latest quarter cooled off from the comparable period of 2006 as the amount of money flowing to state companies and the number of deals dropped, a new report shows.

Colorado companies attracted $106.1 million in financing in the first quarter of 2007, down 6 percent from $113.1 million a year earlier, according to the findings to be released today by Dow Jones VentureOne and Ernst & Young. State companies struck eight separate venture capital transactions, down from 18 in the 2006 quarter and 12 in the 2005 period.

Still, that's a solid quarter by historical standards, the companies said.

Venture dollars streaming into Los Angeles fell, but they climbed in San Diego and Arizona.

Nationally, venture capital investment increased 8 percent in the first quarter to $6.96 billion, the report indicates. It counted 584 deals, down 31 from the same period of 2006.

The report shows 2006 was a banner year - a five-year high for deals and investment across the U.S. - in the venture capital realm, and the trend appears to be continuing into 2007.

In Colorado, half the companies that received financing are in the technology sector.

Colorado companies last year reeled in about $474 million in venture funding, Ernst & Young said, down from $686 million in 2005, when a few large deals, including a huge one for Boulder software company Webroot, drove the dollars higher.

Among Colorado's most significant venture capital headlines in 2006 were an $18 million win for Pharmaca Integrative Pharmacy in Boulder, a $14.5 million deal for Efficas in Boulder and a $13 million transaction for Ping Identity of Denver.

patonj@RockyMountainNews.com or 303-954-2544