Utah Fund of Funds

from 2008 Annual Report

by Utah Governor's Office of Economic Opportunity

Utah Recruitment Initiative

The Utah Fund of Funds (Utah FoF) is a major economic development program created by the Utah Legislature to provide the state’s entrepreneurs with access to a broad array of quality funding sources. With an initial charter of $100 million approved in 2003, the fund invests in quality venture capital/private equity firms, which in turn explore investments in promising Utah entrepreneurial growth companies. In the 2008 session, the state legislature augmented the program with an additional $200 million.

As of July 2008, more than 200 funds had applied to the Program, from which 20 high-quality venture capital/private equity firms had been selected as portfolio firms, including seven from Utah. Partners at outof-state firms commit to spend a predetermined amount of days in Utah, helping that fund build a strong network of Utah business leaders, entrepreneurs and companies.

Success

Thus far in the program, Utah FoF portfolio firms have completed 359 in-depth reviews of Utah companies and selected 25 to receive funding. Over $127 million has been invested in these companies, and the portfolio firms have helped them raise an additional $365 million through further syndication. Most importantly, these 25 companies have created a total of 1,006 jobs, with an annual average salary of approximately $60,000—far above the Utah average wage.

Utah’s information technology and biosciences sectors have enjoyed significant growth and heightened interest with the help of the program’s impact on both early-stage and growth-stage companies. In addition to providing enhanced access to a greater number and diversity of funding sources, Utah FoF works directly to match the state’s entrepreneurs and growth companies with appropriate VC/private equity firms and business mentors.

Select Company Highlights

LineaGen, Inc. (Salt Lake City) – Funding is notoriously difficult for early-stage companies, but even more so for an early-stage company in the biomedical sciences. Utah FoF was instrumental to LineaGen’s success in raising $5.8 million in the midst of a very tough venture capital market for start-up life science companies.

Spectrum DNA. (Park City) – Utah FoF was a key resource in this innovative social media development studio firm raising its initial $3.2 million. FoF provided invaluable counsel and contacts, delivering a host of qualified investors, allowing the company to focus on creating value in the business.

“I’m glad to hear of the increased investing activity being fostered by the Utah Fund of Funds. More competing VCs improve practices and the treatment of entrepreneurs, helping the entire ecosystem reach a healthy balance that can only be created through a free market with numerous funding sources competing.” Josh James, CEO/Co-founder, Omniture