Companies in Colorado raised $76.3 million from venture capitalists during the second quarter, one of the smallest three-month hauls since 2000, according to a survey to be released today by Ernst & Young and Dow Jones VentureOne.
The state has logged smaller quarterly totals just three times since 2000 – the second and third quarters of 2003 and the fourth quarter of 2004.
“If you look at the last five years in Colorado, it paints a picture of a very volatile venture-capital economy,” said Don Williams of Ernst & Young.
Nationwide, venture investing reached its highest point in more than four years, with $6.73 billion raised on 619 deals in the second quarter, the report said.
Colorado companies landed 11 venture deals during the quarter, down from 24 deals for $193.6 million during the second quarter of 2005. That follows a 36.2 percent decline in money raised during the first quarter this year compared with the first quarter of 2005.
Williams described the slowdown in 2006 as “a return to normalcy for Colorado,” which was home to a pair of spectacular deals last year.
In 2005, Boulder’s Webroot, an anti-spyware software developer, landed a $108 million deal. Louisville-based Replidyne Inc., a biopharmaceutical company, had a $62.5 million deal.
“In our market, one deal can skew things,” said Chris Onan of Appian Ventures in Denver.
Williams said 46 percent of venture money this year in Colorado went to start up and early-stage companies, which bodes well as those companies could land additional financing during the year’s second half.
Nationwide, 33 percent of all venture money went to start up or early-stage firms.
Once again, local technology companies received the bulk of the money – $61.2 million on seven deals. Health care-related companies landed $11.8 million on three deals.
Wayne Greenberg, an angel investor and chief executive of Laramie-based energy company Welldog Inc., said Colorado has too few start ups in a range of industries to satisfy the amount of available capital.
“We don’t have that sort of feeder market that comes out of areas with a lot of Fortune 500 companies,” he said.
VentureOne, a San Francisco research firm, prepared the report with Ernst & Young.
Staff writer Will Shanley can be reached at 303-820-1260 or wshanley@denverpost.com.
