Making money in Utah
February 9, 2008
Wayne Brown Institute recently offered an opportunity for entrepreneurs and new companies in Utah to rub shoulders with various investors in the Venture Capital world.
On Wednesday and Thursday at the Zermatt Spa in Midway, large companies who have formed their own corporate venture capital funds gathered to discuss the types of technologies, products and companies they are looking to invest in. They were also there to give 23 local companies the opportunity to present and pitch their products and services to investors.
Several local investment companies attended the event, including Clear Creek Investment, CSI Holdings, LLC, Hunter Capital Group, LLC, Park City Angels and Polar Capital.
Parkite Mike Malone, president of RemedyMD, was at the conference with some of his associates, looking for investors who might be interested in funding a new medical research software his company developed.
"If an investor is interested, hopefully they’ll find our way to us," said Dave Carlston, marketing director for RemedyMD. "Mike brings a vision of how to get this product out to the masses."
Carlston explained that RemedyMD is a high-tech Internet medical research engine that allows researchers and doctors to make diagnoses easier and more efficiently.
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"Our special sauce is called ontology," Carlston said. "Ontology translates different data terms into single concepts."
The software was developed in Salt Lake and is already selling to several hospitals, including the Cleveland Clinic and Children’s Hospital of Wisconsin.
Carlston was representing just one of the many local companies present at the conference in Midway, hoping to attract investors for money.
"We’re at the stage where we want to take it to the next level," he said.
The last panel of the conference was titled "Trends in Angel Investing in Utah," where several new local Angel investors, including Dan McPhun from Park City Angels, spoke about what they look for in a company.
Angel investors are individual private investors who invest in entrepreneurial companies. The term "angel" sprung from the 1900s when wealthy businessmen invested in Broadway productions, it explains at Angel-investing.org . The Web site explains that Angel investors provide a more hands-on approach for the companies they invest in, versus venture capital firms, where investments can be less personal.
Some of the large companies that have created venture funds also spoke during the conference about what they look for in companies, specifically what the companies can offer.
"Technologies are more complex," said Marti Nyman from Best Buy Ventures during a panel discussion. "There has been a decline in what consumers are getting out of technologies."
Nyman said Best Buy Ventures typically looks for companies that have created technologies that would best fit the Best Buy store, including platforms for the Internet, like user media and sharing content.
"We’re creating a lot of that demand from the products that we sell," Nyman said.
The conference also included a Utah Funds of Funds panel, where several investors from venture capital groups spoke about who is investing in Utah and what deals venture capital firms are attracted to.
Spencer Tall from Allegis Capital in Palo Alto, Calif., spoke about how Utah Funds and Funds has introduced his group to many local companies.
"We’ve done a lot of work out here," Tall said. "Out profile in the state has risen quite a bit."
Ryan McIntyre from the Foundry Group, based in Boulder, Colo., said, regardless of the chance of a recession in the United States, Utah entrepreneurs do not have to worry about launching new companies.
"Obviously, we’re in for choppy times with a recession," McIntyre said. "But the current state of the economy doesn’t matter much. It’s a great time to start a company and buckle down and build a product."
When asked what main things investors look for when evaluating an entrepreneur, Todd Stevens from Epic Ventures in Utah said he looks for "experience, integrity, commitment, agility and temperament."
Phil Reed from Highway 12 Ventures in Boise Idaho, said his company looks for "passion, integrity and knowledge."
All of the panelists agreed during the discussion that one of the most important attributes they look for in a company when investing is what that company can offer them. Each of the corporate venture fund groups also expressed the importance of presenting to their firms exactly how their company or product can affect the world.
"If it’s not clear what problem you’re trying to solve, you’ll lose us really fast," said Elliott Parks from Hamilton BioVentures in Tennessee.
"My policy is, I initially give the entrepreneur the benefit of the doubt," said Damien Perriman from the Dow Chemical Company. "But [the question is], ‘Why do I care?’"
Other topics the panel touched on included allowing time for an investment company to test a company for a potential investment and they reminded local companies that most investments don’t lead to acquisitions.
Wayne Brown Institute has created several programs and processes to help entrepreneurs develop their businesses into "viable, rapid-growth companies," a press release reads. Companies that participate in the Cooperative Venturing Educational process have raised almost $2 billion in private equity with 69 percent in business after 10 years, it reads. For more information about the Wayne Brown Institute or venture capital, visit http://www.venturecapital.org . For more information about Angel investing, visit http://www.angel-investing.org.