Venture capital drops nearly $100 million in Colo.
By David Milstead, Rocky Mountain News (Contact)
Published January 19, 2008 at 12:05 a.m.
Venture capital investments dropped in Colorado in 2007 by nearly $100 million, to $564 million, according to the first of two national reports on the industry.
Colorado deals slipped from 100 in 2006 to 86 in 2007, according to the MoneyTree Report.
The report is produced by accounting firm PricewaterhouseCoopers and the National Venture Capital Association, using data from Thomson Financial. A second report from Dow Jones VentureSource will be released Tuesday.
The Colorado decline runs counter to the national trend. MoneyTree says the national value of 3,813 VC deals was $29.4 billion, up from 3,630 deals worth $26.6 billion in 2006.
PricewaterhouseCoopers partner Robert Puls notes that two Colorado companies got roughly $100 million each in 2006, boosting the total and making comparisons tougher. No 2007 deal approached even half the size of those.
Also, "some of the VC funds in Colorado are a little more mature and are investing in follow-on rounds with their existing portfolio companies."
The 20 fourth-quarter VC deals, worth $102.4 million, were up slightly in value from the 21 deals worth $94.7 million in the final quarter of 2006.
Puls said the fourth quarter deals reflected "a continuing shift to funding of companies in the expansion and later stages" - 95 percent of total deal dollars.
Funding of early stage companies continued the decrease seen throughout the year, representing just 4 percent in the fourth quarter. But for the full year, funding of early stage companies increased from 11 percent of the total value in 2006 to 16 percent in 2007.
"We don't necessarily see (the decline in the fourth quarter) as a sign that venture capitalists are not trusting earlier-stage companies," Puls said. "It may be a sign of more conservative funding in wake of developments in the credit market."
Software companies took the largest share of the cash in 2007, grabbing just under $175 million, about 31 percent of Colorado's 2007 VC funding, in 33 deals.
Biotechnology, with 12 deals, was the only other sector in double digits, for a total value of $83.9 million.
GlobeImmune, a Louisville company developing genetically modified yeasts that stimulate the immune system against diseased cells, got a $41.2 million deal in the third quarter, the biggest in the state this year.
Boulder's Sunflower Farmers Markets got the biggest funding of the fourth quarter with a $30 million injection.
Funding in Colorado
* 2007: $564.2 million
* 2006: $660.7 million
* 2005: $663.0 million
* 2004: $439.2 million
Top deals of 2007
* GlobeImmune: $41.2 million
* Market Force Information: $31.9 million
* Sunflower Farmers Markets: $30.0 million
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January 19, 2008
11:05 p.m.
Suggest removal
cakeckh writes:
Why would anyone start a business in Colorado with Ritter in office? Ritter wants to tax anything that looks like a revenue stream.