04/26/2005
Webroot Leads Money Haul
Boulder company's venture capital deal nation's largest, reports say
Greg Avery, Camera Business Writer
The Colorado office of Cooley Godward LLP represented Webroot Software in its $108 million private financing.
One Boulder County company or another has led the state in venture capital raised in three of the past four quarters. A local software maker did even better for the first quarter of 2005 — landing the biggest investment in the country.
Two surveys of venture capital investment issued Monday list the $108 million won by Boulder's Webroot Software Inc. as the largest nationally during the first three months of the year.
Webroot's haul at the start of February — the first venture capital accepted by the anti-spyware company — represented almost two-thirds of the $163.7 million in known venture capital brought in by 17 Colorado companies, according to the MoneyTree report issued Monday by PriceWaterhouseCoopers, Thomson Venture Economics and the National Venture Capital Association.
A separate report by VentureOne and Ernst & Young LLP also ranked the Webroot deal as the country's largest.
Webroot's was the biggest cash infusion given to a Colorado company for nearly two years and beat anything by a Boulder County-area company since late 2000.
Nine of the state companies listed by MoneyTree in the first-quarter report are located in Boulder County. Besides Webroot, eight other area companies combined raised at least $26.5 million.
Lafayette-based Pelion Systems Inc. and Longmont's Coled Technologies Inc. received undisclosed amounts of venture capital in the quarter.
The first-quarter results show that Colorado and Boulder County have left the venture capital doldrums that followed the high-tech bust three years ago, said Kirk Holland, general partner of Vista Ventures, a Boulder-based venture capital firm.
A healthy number of companies in a diverse range of industries now compete for funding, and the number of venture capital groups investing in local companies appears to be growing, he said.
"Even when we say no to something, it's getting funded by others," Holland said.
His company was among those that invested in Umbria Communications Inc., a Boulder software company that landed $6.7 million during the quarter.
The fact that 40 percent of the state's first quarter deals were early-stage investments in relatively new companies also is a good sign, said Angus Macfarlane, a senior manager for PriceWaterhouseCoopers, which produces the MoneyTree report.
Such investment lays the groundwork for future economic expansion. "Without the funding you're not going to be setting the stage for those larger companies of tomorrow," Macfarlane said.
Nationally, venture capital investment in biotechnology and other health-care related fields slowed compared with recent years.
Money invested in health care companies declined 39 percent compared to the first quarter of 2004, according to the VentureOne and Ernst & Young report.