* 2004 UV Partners 2004 UV Partners

April 8, 2023

© 2004 UV Partners© 2004 UV Partners

How to Raise Money in UtahMarch 15, 2006

Heidi L. Huntsman

Starting a company• What are the considerations?• Sources of capital• What is the process

Private Capital in Utah• UV Partners—who we are• Others

So you want to start a company—where do you go from here???

• Intellectual Property—file as soon as possible• Management, management, management• Vet your ideas with experienced individuals

• There is no substitute for experience—find people who have it!

• Scientific advisors• Business advisors• Board members• Mentors

• Build a solid network

Starting a companyHave a well thought through business strategy

• How do you plan to make money?• Understand how much money/time it will take to

reach profitability, and have a well defined roadmap of how to get there.

• Define the customer• What is the sales channel?• Do an analysis on probable exit scenarios

Starting a companyWhat are the sources of Capital

• Personal leverage• Angel money• Venture Capital• Private Equity• Debt• Public Exchanges (NYSE; NASDAQ; AMEX)—Initial Public

Offering (IPO)• Private Investment in Public Entities (PIPE)• Non-dilutive capital

• SBIR grants• STTR grants• NIH grants• DOD grants• DOE grants• Etc.

Venture Capital as a source of funding

Venture is competitive

• Roughly 1% of deal flow gets funded per firm• Do your research; target VC firms appropriately—don’t

waste your time or theirs

• The average deal takes anywhere from 3-12+ months to complete funding• Be patient—it won’t happen overnight• Be diligent—as the entrepreneur the onus is on you to

provide supporting information• Listen critically—VC’s see a lot of companies and can

shed light on strategy, markets, management, etc.

Why Venture Capital and what to look for

• Generally early stage companies in high growth industries• Very high risk investing• Generally look for high returns—”home run” investments• Large market opportunities (>$500 Million)

• Networks• Industry knowledge and domain expertise• Deep pockets; syndicate formation• Active vs Passive

• Which partner will join the board?• What other resources will they add?

• Remember—this individual will become your partner going forward; a good working relationship is critical

What is the process?Getting a foot in the door

• Identify what sources of capital are appropriate for your company

• Identify specific firms who have expertise in your space

• Verify whether the fund is actively investing in your space

• Try to network for an introduction to the firm—”over the transom” is an extremely difficult way to get in the door

• Brokers? Many people use them, can be very expensive and not recommended

What is the process?Business description

• Start with an executive summary• Include any short publications that may validate

your technology or business strategy• Send a full business plan only when it has been

requested. • Private Placement Memorandum (PPM)—don’t

waste your time or money if you go the VC route

What is the process?Due diligence

• Be proactive—have documents at your finger tips and ready to go• Intellectual Property (IP)• Contact list—scientific advisors, business advisors• Detailed sales model and projections• Employee contracts• Prior funding documentation• Capitalization table• Back-up data & information—this will vary greatly by

industry

• Be tenacious• Follow-up promptly when asked for something you

may not have already prepared• Listen carefully to feedback

• Tough terms are becoming a thing of the past• Ratchets, liquidation preferences, warrants, etc. mostly gone• “Plain vanilla” tends to be the terms de jour.

• Insider Rounds

• Increased competition for quality deals• Driving up valuation

Balance is shifting—more favorable for the entrepreneur

Valuation

• Stage of development• Market size• Maturity of management team• Strength of IP• Positioning within market• Development of market• Likely exits—possibilities and time frame

Sources of private capital in Utah

UV Partners

Established in 1986

Offices in Salt Lake City and Los Angeles

Early Stage Investments• Information Technology• Life Sciences

Raised 3 Funds• UV I in 1986 - $10 Million• UV II in 1998 - $67 Million• UV III in 2001 - $120 Million

UV Partners

• Active Investors

• Early – Seed or Series A

• $100K to $4M in First Round• Reserve $8 – 10M Per Deal Total

• Regional Focus

Other sources of Private Capital in Utah

Angel Groups—no single large network

vSpring—early stage venture capital focused in IT and Life Sciences

Wasatch Venture—all stages venture capital generalists

Sorenson Capital—later stage private equity

Peterson Capital—later stage private equity

Ridgeview Capital—later stage private equity

DW Healthcare—Life Sciences private equity

* 2004 UV Partners 2004 UV Partners

Economy & Finance

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