Tuesday, January 23, 2007
Interview with Devin Thorpe, Mountain West Capital Network
Our interview today is with Devin Thorpe, president of the Mountain West Capital Network (www.mwcn.org), a group that is focused on the technology deal flow in Utah. Thorpe is also Managing Director and Founder of Thorpe Capital Group (www.thorpecapital.com), an investment bank in Salt Lake City. We thought it would be great to get Devin's perspective on the investment market in Utah, and how the state might improve. (Disclaimer: Thorpe Capital is a sponsor of Techrockies.com, although that has no influence on our editorial coverage).
Techrockies: Tell us a little bit about the Mountain West Capital Network -- what's the idea behind the group, and what is its purpose?
Devin Thorpe: Founded 25 years ago by a group of entrepreneurial minded community leaders, today the MountainWest Capital Network comprises the real deal community in Utah. The MWCN exists to foster deal flow and economic development in the Mountain West. The breadth of our network includes angel investors and venture capitalists on one end of the spectrum to commercial and investment bankers serving Utah's largest corporations on the other. Service providers and entrepreneurs come together here to network.
Techrockies: From your perspective, how is Utah's technology industry doing, and where are some of the bright spots you see for the industry?
Devin Thorpe: Utah's technology industry is vibrant and growing rapidly. The state created a $100 million fund of funds several years ago; these funds are now being deployed into venture funds into our economy, bringing funds in from out of state and spawning interest in new funds among well qualified new fund managers. As a result of the increase in venture capital available, the technology industry in Utah looks to have a brighter future than ever.
Furthermore, the state recently launched an initiative known as USTAR to catalyze technology development on Utah's college campuses by creating world class centers for technology development. These centers will include state of the art facilities for leading research scientists from around the world. By focusing on centers, the goal is to be able to create teams that can lead the world in specific areas, attracting the very best and brightest minds--in focused areas--to Utah. This initiative should have long range effects that give credibility to our self-assigned moniker "Silicon Slopes."
Techrockies: Where do you think Utah can improve in terms of encouraging more startups and in building the technology industry?
Devin Thorpe: My experience suggests that networking is the key. Utah has a culture that values entrepreneurship and self reliance that sometimes seems to work against networking. Almost everyone in the venture technology community in Utah can do a better job of reaching out to build bridges to resources across town and across the Rockies and the Sierras to work better with our neighbors in Colorado and California especially.
Techrockies: Are there any industries or sectors you think look particularly promising for Utah right now?
Devin Thorpe: Utah is uniquely positioned in the area of medical informatics, leveraging the University of Utah Medical Center, the strength of companies in genetics research and the LDS Church genealogical database. We are also seeing clusters of strength elsewhere in life sciences, in software, and in nanotechnology.
Techrockies: You talk with lots of entrepreneurs looking for funding, and have been involved with many successful firms in the area. What advice would you give them on successfully finding funding here for their firm?
Devin Thorpe: There has never been a better time to raise money for a start up in Utah. There are at least six organized angel networks in Utah--in 2000 there was one. There are also more active venture funds; Utah's most active fund today was not around in 2000. Utah's largest private equity fund is also new in the last several years. The result is that there is more capital at each tier of venture finance available in Utah than ever before. We're also seeing more investment in Utah from out-of-state funds than in the past, including money from first tier funds like Hummer Winblad and Battery Ventures.
Techrockies: Finally, Utah's seen some tech M&A activity lately--what's your assessment of the recent deals, and what do you think of the prospects are for the next year?
Devin Thorpe: The hits just keep right on coming. Utahns would like to see the pace of M&A slow somewhat. Too many of our great prospects get acquired by out of state firms that often move jobs out of state. A successful exit is always a time to celebrate, but we look forward to the day when more of the acquirers will be Utah companies bringing jobs and technology into the state. Over the long haul, we do expect that the increased availability of growth capital in Utah will lead to more IPOs, replacing a few of the M&A deals. For 2007, I expect we'll see a year that will be near but not exceeding the 2006 volume of deals.
Techrockies: Thanks for the great insights!