Investment deals grew in '08 for Utah firms

Investors from around the country as well as in Utah invested in Utah businesses more frequently in 2008 than in 2007, according to a report released Thursday.

In 2008, 141 investment deals took place among Utah businesses, with 98 funded by venture capitalists, 34 involved mergers and acquisitions and nine were public offerings. The increase represented a 7.6 percent boost in activity compared to the 2007 total of 131 deals, according to the MountainWest Capital Network's annual "deal flow" report.

Founded in Salt Lake City in 1983, the organization supports entrepreneurial success and enables business growth through networking activities. Its annual report identifies and recognizes companies that raised capital and participated in other significant business transactions. Several hundred people attended a Thursday luncheon that featured the 2008 report's unveiling.

While the number of deals increased overall, total investment dollars were just under half of the 2007 amount.

"The world experienced an economic downturn in 2008, yet Utah continued to experience targeted business growth," Lex Watterson, president of MountainWest Capital Network, said in a news release. "Total activity increased in 2008 from 131 deals to 141. If you subtract 2007's three mega-deals totaling $4.16 billion, the total dollar amount in deals remained nearly the same from 2007 to 2008."

The report included transaction categories ranging from small investments beginning at $75,000 from "angel" investors, to venture capital and private equity involving millions of dollars and public offerings that often involve billions of dollars, Devin Thorpe, network chairman told the Deseret News.

Nationally, venture capital funding levels have dropped significantly, partly as a result of the economic downturn, a trend the Beehive State has been able to avoid, Thorpe said.

"Utah still has more venture capital under management by far than we had … five or 10 years ago," he said.

Small businesses in Utah have shown more strength and creativity than others around the country, Reed Chase, chairman of MountainWest's deal flow committee, said.

"(Small businesses) are continuing to come up with innovative ideas and their ideas are being funded," he said. "They are being able to build their companies, create jobs. … Small businesses in the state of Utah are the reason why we haven't felt the economy the way the rest of the country has."

Thursday's luncheon also included presentation of MountainWest's "Top Investors of 2008" awards.

Two Utah venture capital firms, InnoVentures Capital Partners and vSpring Capital, each invested in nine Utah companies in 2008, tops among venture capital investment companies. Epic Ventures and Island Park invested in five companies each.

E-MAIL: jlee@desnews.com