Vista Ventures Announces $60M in Available Funding
Licenses helping Colorado venture capital companies in tech sector
Boulder Daily CameraApril 10, 2003
The pot of startup money available for Colorado technology companies got bigger Monday, after a year when venture capital funding was down significantly in Colorado.
Broomfield-based Vista Ventures announced it secured a Small Business Investment Company license from the U.S. Small Business Administration, allowing the venture capital company to invest more than $60 million in new capital.
Catharine Merigold, general partner with Vista Ventures, said the SBA program was changed in 1995 to make it attractive to venture funds and to spur increases of jobs in the technology sector.
But she said the program has been more selective in the past few years in what companies are given licenses.
"They've really raised the bar," she said. "It's very difficult to get this kind of status these days."
According to the SBA, seven Colorado companies have SBIC licenses this year including Cornerstone Ventures in Broomfield and The Roser Partnership in Boulder.
Jay Edwards, public information officer with the SBA's Colorado office, said the program is highly popular and designed for technology-related venture firms.
Merigold said Vista Ventures tries to concentrate on Colorado technology companies, but she said the money could also go to companies in the Western region of the United States and to companies with a technology product that aren't specifically geared toward the high-tech industry.
Merigold estimated that about 18 to 20 companies will receives funding from Vista Ventures. She said the company plans to allocate money to one Colorado company this month and four companies this year. Vista's previous investments include Boulder-based LeftHand Networks.
The news comes a few months after a survey reported that Colorado firms raised $547.3 million in venture funding last year, a sharp decline from the $1.39 billion raised in 2001 and the $4.34 billion raised in 2000.
The MoneyTree Survey, prepared and released by Pricewaterhouse Coopers, Venture Economics and the National Venture Capital Association, reported that U.S. firms raised $21.18 billion last year, compared with $41.28 billion in 2001.
John Metzger, chief executive officer with Boulder-based public relations firm Metzger Associates and board member with Rockies Venture Club, said the SBIC program could mean a new step for Colorado venture capital companies.
"I think it's really a great idea for the government to syndicate small business investment with venture capital firms," he said. Metzger said the strategy could also lead to longer investment strategies, giving startups more time to turn profitable.
"I think venture capital in Colorado and in the country in general needs to start developing a new position, a new investment strategy," Metzger he said.
