Venture capitalists flock to Canyons, Utah- Silicon Valley meets the Wasatch Mountains.

THE CANYONS — This isn’t Palo Alto, but for a brief moment Wednesday it felt like the charmed California community.
Given the number of venture capitalists here it’s no surprise.
Silicon Valley meets the Wasatch Mountains.

By Dave Anderton
Deseret News business writer

It’s a courtship the Wayne Brown Institute hopes will last.
Now in its 18th year, the Investors Choice Global Venture Capital Conference continues to join together emerging-growth companies with potential investors.

"Obviously this is the best of the things in the Rocky Mountain area I’ve seen. Coming here I see things I haven’t seen," said Michael Levinthal, partner of the Mayfield Fund, a Menlo Park-based venture capital firm.

This week, 28 U.S. and international companies presented their 10-minute pitches, hoping to catch the attention of at least one of the 200 investors in attendance.

"I think this conference is terrific in terms of inviting new companies to present and get to know people," said Mark Bonham, a Palo Alto-based attorney. "This year’s crop is maybe the best ever, and I’ve been coming to this conference for more than 10 years."

The annual conference is crucial for companies like MediConnect.net, a South Jordan-based company in the medical record retrieval business.

MediConnect.net had raised $2.25 million in earlier rounds of financing but came to the conference seeking an additional $3 million, money the company hopes to use to expand its operations. "Financing risk is a big deal right now in the marketplace," said Paul Ahlstrom, managing director of vSpring Capital, a Salt Lake-based early-stage venture capital fund that invested in MediConnect.net. "It’s very hard for these companies to get one round of financing, and fewer than 24 percent are getting follow-on financing on a national basis."

That makes it critical for emerging businesses to secure local VC sponsorship in an environment with fewer and more scrutinized deals. Typically, venture firms won’t invest outside of their area except through local partners.

"You may have the market, you may have the management team and everything else, but because of the financing risk you are going to hit the wall," Ahlstrom said.

A MoneyTree survey compiled by PricewaterhouseCoopers for 2002 showed that Utah companies received less than $95 million in VC money last year, compared with $223 million in 2001.

Yet Levinthal and others contend there is money waiting for the right businesses.

"There are deep pockets but short arms," Levinthal said. "There is money there, but the screen is very high, the bar is very high."

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