Monday, January 29, 2007
Interview with Brad Bertoch, Investors Choice Conference
Brad Bertoch is the President of the Wayne Brown Institute (www.venturecapital.org), a nonprofit venture accelerator in Salt Lake City, which is behind the upcoming Investors Choice conference being held next week. We spoke with Brad about the conference and about the success Utah's been having in the technology space.
Techrockies: Tell us, what is the Investors Choice conference all about?
Brad Bertoch: Investors Choice is an opportunity for promising companies, companies with the possibility of being a quality venture deal, to pitch to venture and angel investors throughout the region. It differs from other conferences around in that we spend an awful amount of time in mentoring and getting those companies ready to present. We have a very high success rate of companies going forward in the next 12 months to raise money. To give you a concrete example, in the 2006 conference, which we did last year, fifty percent of the companies that presented raised money after the conference, raising a combined total of 31 million dollars.Techrockies: What kind of companies are going to present--are they just from Utah or from the region?
Brad Bertoch: It's regional. All the companies are high growth, and almost all are exclusively high tech, including software, hardware, life sciences, and all technology phases. All of the companies are high growth, though there are a few that are more angel deals than venture deals--and most are by and large high tech based. They come from all over the region, including a company from Oregon, two from New Mexico, two from Hawaii, and a company from Idaho--and of course companies from Utah.
Techrockies: What's the status of Utah's technology industry, and have people started to realize the extent of the industry in the state?
Brad Bertoch: The status is that high technology is now a big business in Utah. High tech in Utah, encompassing IT, life sciences, and advanced materials, is by far the biggest industry in terms of revenue in terms of GDP in the State of Utah--no one else comes close. It's almost 25% of the state's GDP, even though it only employs a little over 5% of the workforce. It's having a major impact here. The economy here seems very robust, and there's even been some talk of skilled labor shortages for the tech community. Venture investment has been very interesting to watch. We did not go into the tech crash as steeply in terms of venture investments as other states. We came out of the crash from venture investments earlier, we bottomed out in 2002 and started to go up from there. We've done very well in attracting venture capital. The best thing that happened to the State of Utah was the tech crash of 2000. It reset everybody's expectations in Silicon Valley, and people said--oh wait, I can go to Utah to a deal, and not have to worry about not being able to come back to Silicon Valley and be behind. At the height of the tech crash, at the end of the 90's and early 2000's, people wouldn't leave to do a deal or to a company, because they would be behind a year or two. Now, people are much more mobile, there's a number of success stories, and a number of new venture funds. We went from three to fifteen venture funds, from $300 million to $1.5 billion under management between 2000 and 2005. So we have had a huge surge of venture capital coming here, great CEOs starting new companies, and a great crop of new companies. I think we did extraordinarily well since June of 2000. The Wayne Brown Institute has been involved in 3, 4--at least 5 IPOs since June of 2000, and our companies have raised more money than every before. Our companies have done very well.
Techrockies: For people who are not familiar with your group, can you tell us a little bit about the Wayne Brown Instititue?
Brad Bertoch: We are a 501(c)3 not-for-profit. Our educational mission is to improve the human condition through entrepreneurship. We help people get the knowledge, experience, and mentoring to move their businesses forward. We are known in the parlance as a "not for profit venture accelerator" along the lines of the old CMGI, Softbank, and Idealab--except, number one, we're a nonprofit--and number two, we don't have a venture arm and don't make investments, though that's started to change. And number three, we're technology agnostic--we deal in all phases of technology. The other for profits toasted in 2000, and we survived. We've been in business since 1983, one of the oldest, and with our stats, the most successful in the country. Our companies have raised now at the end of 2006, $1.8 billion in private equity, and among 620 companies we've had hundreds of acquisitions, and scores of IPOs. We're really good at picking companies that can raise money and skills.
Techrockies: How many companies are presenting at the conference?
Brad Bertoch: We're going to have twenty three companies present, and a wide range of both technology and stage, ranging from early-stage to later-stage companies, with most firms focused mostly on early stage A-round and B-round financing. We also have other programming we're doing along with that, including a panel on trends on Limited Partners investing in VCs, clean tech--investing in environmental technology--a panel on angel investing, and experts from those areas. There's a lot going on, including skiing and our second annual Venture Capital bobsled races.
Techrockies: Thanks for the interview and good luck at the event!