Salt Lake City — vSpring Capital, one of Utah's largest venture capital funds, will merge with Signal Peak Ventures to invest in regional companies.
The combined firm, which will keep the Signal Peak name, will manage $450 million of committed capital, partners Dinesh Patel and Ron Heinz said in an interview yesterday at their Cottonwood Height's offices. The firm may look to raise a new investment fund of $150 million to $200 million in 2013.
Partners at the firm will include Patel, Heinz, vSpring's Scott Petty and Signal Peak's Brandon Tidwell. They will each equally split ownership. VSpring managing director Ed Ekstrom will become a venture partner and work with portfolio companies. By joining, the firm can pull from a larger pool of limited partners who invest money.
"If we're successful there are a lot of people who will want to invest in our ongoing success," Heinz said.
Before the merger, VSpring had $400 million of committed capital, investing in about 45 companies while Signal Peak had $50 million over 10 companies.
The partners typically invest $5 million to $12 million in companies and look to own 15 percent to 20 percent at exit, Patel said. Potential investments typically will be found within a one or two hour flight including Utah, Colorado, New Mexico and Arizona.
"We're working with four really strong partners who have a lot of depth in the market." Heinz said about the new team.
Business in the Backyard
Looking forward the state has several areas to invest in, the partners said. Heinz said he likes software as a service businesses because they can scale globally and information security companies such as South Jordan-based Solera Networks. Patel, who has a PH.D. in physical pharmacy, said there is a lot of talent in the medical device sector, which is now becoming more innovative.
The merger signals an end to the vSpring firm name in Utah. It began with five partners, including Patel, Petty, Ekstrom, Greg Warnock and Paul Ahlstrom. Since then Warnock left to become managing director at Mercato Partners and Ahlstrom left to found Alta Ventures and Alta Growth Capital in Mexico.
"We wanted to have a fresh new name," Patel said. "We could have come up with another name. Why go through all that hassle?"
Heinz said the intermountain region has an "expanding base of entrepreneurs."
"You combine that with what has been great innovation and great technology - as far as the type of software engineers we have, the type of people in the medical field that have always been innovators - I think that is really going to bode well for the state over the next couple of decades," he said.
The V100, which tracks venture entrepreneurs, will maintain its name, Patel said.
Signal Peak was founded last year from Canopy Venture's venture capital team.