Jul. 29–Colorado entrepreneurs are starting to see the money, after two years of seemingly endless waiting.
A national venture capital survey found that Colorado companies raised $229.5 million in the second quarter, up from $154.4 million during the first quarter of 2003. That’s a 49 percent increase.
Telecommunications companies led the second-quarter 2003 investments with a total of $176.9 million, mostly due to the $156 million raised by WildBlue Communications, a Greenwood Village-based broadband satellite and Internet access provider.
“The sector hasn’t received more than $100 million since the first quarter of 2001,” said Matt Kosmicki, technology partner at PricewaterhouseCoopers in Denver.
Nationally, venture capital investing increased 7.5 percent nationally in the second quarter over the first quarter, according to the MoneyTree Survey by PricewaterhouseCoopers, Venture Economics and the National Venture Capital Association.
Across the country 669 companies received $4.3 billion in the second quarter, compared to 647 companies that received $4 billion in the first quarter.
A separate venture capital survey by Ernst & Young and VentureOne shows that early-stage investment in Colorado companies dropped during the second quarter.
Eight Colorado companies got $60 million during the quarter, compared to 11 companies that got $89.9 million in the first quarter of 2003.
The Ernst & Young U.S. Venture Capital Survey shows statistics only on equity investments in early-stage, innovative companies and does not include companies receiving funding solely from corporate, individual or government investors.
Kosmicki said it’s still too early to say there is a trend toward more venture capital money flowing to Colorado.
“The data is slightly skewed because WildBlue Communications, Intelliden Inc., Antero Corp. and AirCell Inc. make up about 83 percent of the funding this quarter,” Kosmicki said.
The performance in the telecommunications sector did not surprise Stephanie Smeltzer, vice president of Denver-based Meritage Private Equity Funds.
“Despite the historical problems, this is an industry that is here to stay,” she said. “Everyone wants to be able to use technology, and there continues to be great improvements in the industry.” Anark Corp., a Boulder-based multimedia software company listed in the telecommunications sector, raised $3.5 million this quarter to increase its marketing and sales capacity, improve existing technology and create new products.
Having an existing and supportive group of investors helped Anark land its late-stage funding, said Stephen Collins, the company’s chief executive.
“We’ve spent a lot of time developing our relationships with our investors and showing them that we can reach our milestones, which is particularly important when you are not raising money,” he said.
The company started as a “garage-shop” game developing company with three to four people, Collins said. It later decided to leave the entertainment industry to go into a more “need-driven” industry.
Another company that received venture capital funding in the second quarter has expansion plans that may help with the state’s employment.
Adam Aircraft Industries, which received an undisclosed amount of financing during the quarter, may open more manufacturing operations in the state if its two new aircraft get off the ground, said John Hamilton, the company’s vice president of marketing.
The company, which flew the first test flight of its Adam A700 on Sunday, builds airframes in Arapahoe County and Pueblo. It employs 190 people.
—–
To see more of The Denver Post, or to subscribe to the newspaper, go to http://www.denverpost.com
(c) 2003, The Denver Post. Distributed by Knight Ridder/Tribune Business News.
