Utah investments down

Utah companies captured $30 million in venture capital money in this year's third quarter, less than half of the $64 million raised during the same three months in 2004, according to the MoneyTree Survey by PricewaterhouseCoopers.

Five Utah companies received funding, including Control 4 Corp., which led the quarter in a $15 million deal. The Salt Lake-based company, which specializes in home automation products, said the money will be used to develop and sell its products.

Other companies receiving funding included Orem-based CanyonBridge Inc. at $8.4 million; Draper-based Sunforce Technologies at $3.7 million; Orem-based Alianza Global Communication Services at $2.4 million and Salt Lake-based Cognetix Inc. at $679,800.

Joe Strain, manager of PricewaterhouseCoopers' Salt Lake office, said while third quarter investments were down, deals for the first nine months of 2005 already surpass those of last year.

"If you just take third quarter it looks like things were in a downturn, but that's not at all the case," Strain said. "The nine-month period this year is ahead of the full-year period of any of the past four years."

Utah investments reached $223 million from January through September. In contrast, investments in all of 2004 totaled $188 million.

Nationally, venture capital investments were $5.3 billion in this year's third quarter, up from $4.6 billion last year.

For the first nine months of this year the average VC deal size for a Utah company grew to $9.7 million, compared to $7.4 million nationally.

An Associated Press story on Monday said that the MoneyTree Survey may not be picking up all VC deals occurring, because companies are keeping quiet about their investments.

"If you are trying to make something truly unique, it just makes sense to stay under the radar and then spring it on the world," Wes Raffel, a general partner with Advanced Technology Partners in Palo Alto, Calif., told the AP. "I call it 'ta-da' marketing."

Brad Bertoch, president and chief executive officer of the Wayne Brown Institute, a Salt Lake-based nonprofit group that assists companies in securing venture money, recently said that the MoneyTree survey underreports investments on an annual basis by about 60 percent compared to other VC surveys.

Part of that may be due to a more strict methodology. The MoneyTree Survey captures only equity investments and excludes deals that involve debt, bridge loans, recapitali—zations, roll-ups, initial public offerings or "angel" investments.

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