Colorado Springs was shut out of venture capital investments for another quarter even as such investments in Colorado and across the nation increased from the previous quarter.
Venture capital has bypassed the Springs since computer storage manufacturer X-IO received $2 million in the first quarter and no local startups had secured venture funding for nearly four years until Cherwell Software landed $25 million in the final quarter of last year. During that same period, more than $250 million has been invested in 42 companies statewide and $14.7 billion has been pumped into nearly 2,000 firms nationwide, according to the MoneyTree Report from PricewaterhouseCoopers and the National Venture Capital Association.
"Much of the investment across the state during the past quarter went to early stage companies. That is a sign of optimism that venture capital funds are willing to take more risk, in part because for the first time in a long time they can sell their shares in an initial public offering," said Keith Parsons, a partner with PricewaterhouseCoopers in Denver.
Statewide venture capital investments in the third quarter grew 19.4 percent from the previous quarter to $136.6 million but were off 28.1 percent from the same quarter a year ago. Venture funding in the first three quarters of the year in Colorado was off 32.8 percent from the same period a year ago to $330.1 million. More than 40 percent of the funding invested during the July-to-September quarter went to just two companies, Boulder-based data storage system manufacturer SolidFire Inc. and Denver-based online software developer Ping Identity Corp.
Nationwide, venture investments in the third quarter were up 11.6 percent to $7.78 billion and increased 17.3 percent from the same period a year earlier. Venture funding in the first three quarters of the year nationwide was up 2.2 percent from the same period a year ago to $20.7 billion.
"More venture capital dollars are going into more software deals than we've seen in the past decade. The continued increase in valuations for innovative and disruptive technologies in software-related companies, coupled with the increase in exit activity, is driving venture capitalists to make more investments" in the industry, said Mark McCaffrey, global technology partner and software leader for PricewaterhouseCoopers. "It is an exciting time to be an entrepreneur with a software company."
Contact Wayne Heilman: 636-0234
Facebook Wayne Heilman