It is best for an entrepreneur to try and finance her company through her own resources (bootstrapping, friends and family, etc) because it increases her commitment to the company and she then retains ownership. Yet, many companies will need additional capital and depending on the type of business private investors might be interested in participating via debt or for an equity piece. Utah has a good range of financing options available for looking entrepreneurs.
Angels: There are four organized angel groups and a couple of individuals within Salt Lake and Provo. I have listed the organizations only as I believe the individuals seek out their own deal flow. The angels will often invest at the earliest stage of the business, even as early as conception. Certain venture players will also invest at the seed stage (including Wasatch) but this stage is the angel’s main focus.
Local Venture Capital Firms: Venture capitalists provide early-stage and growth capital. Due to the venture capital model, VC’s usually only invest in high-technology deals able to generate high margins.
- Wasatch Venture Fund
- vSpring Capital
- UV Partners
- Canopy Ventures
- Prospector Equity Capital
- Double Eagle Ventures
- EsNet
- University Venture Fund
- Vast Equity (in the formation process)
- Another one is being formed, but due to the fact that I am unsure on their public status I will not post the name on my blog.
Local Private Equity Firms: I have lumped the later stage firms and buyout firms together in the Private Equity list since there are only a handful of these investors in Utah. The later stage firms finance companies that are already cash flow positive and need financing for expansion or in preparation for a liquidation. The buy-out firms actually buy a company and find a new management team (or personally manage the company) to turn the business towards profitability.
- Sorenson Capital
- Peterson Partners
- Cross Creek Capital
- DW Healthcare Partners
- Banyan Ventures
- Two other spin-outs are being formed, but once again I don’t know their public status.
Venture Lending: Venture lenders are a financing option that extends the capital between equity rounds. It is debt plus warrant structure, preserving the equity of the company but providing potential upside for the lender. UTFC was the only venture lender until a couple months ago when Zions created a venture lending arm.
