Investors from around the country as well as in Utah invested in Utah businesses more frequently in 2008 than in 2007 according to MountainWest Capital Network's 14thannual Deal Flow Report, and according to key Utah investors the potential is high for more deals in 2009.

According to the 2008 Deal Flow Report, 141 deals took place among Utah businesses—98 funded by venture capitalists, 34 merger and acquisitions, and nine public offerings. In 2007 there were only 131 deals.

Though the numbers of deals were up overall, the total investment dollars were a little less than half of those invested in 2007.

“The world experienced an economic downturn in 2008, yet Utah continued to experience targeted business growth,” said Lex Watterson, president of MountainWest Capital Network (MWCN). “Total activity increased in 2008 from 131 deals to 141. If you subtract 2007’s three mega-deals totaling $4.16 billion, the total dollar amount in deals remained nearly the same from 2007 to 2008.”

Highlights from the report:

Venture capital and private equity deals increased 42 percent from 69 to 98 indicating positive health for Utah’s investment community and its confidence in Utah’s emerging companies.
Mergers and acquisitions decreased from 53 to 34. Though total M&A activity fell from $4.5 billion to $3.2 billion, nearly all of the difference is attributed to a single $1.2 billion acquisition in 2007.
There were nine public offerings in both 2007 and 2008—$3.2 billion in 2007 and $319 million in 2008. (2007’s two largest deals totaling $2.9 billion account for the difference.)
InnoVentures Capital Partners and vSpring, two Utah venture capital firms, both invested in nine Utah companies in 2008 leading the way among the top Utah venture capital firms, which also included Epic Ventures and Island Park Investments.

The managing partners from InnoVentures and vSpring both agree, 2008 proved to provide good opportunities for VCs with 2009 looking as good if not better than 2008.

“We’re on track to beat our 2008 numbers,” said Steve Grizell, XXXXXXx. “It’s May. We’re not even halfway through the year, but if we were to annualize what we did then we would be substantially higher in 2009 than in 2008. We don’t see this as quirkiness or as an anomaly of the recession, we see it as strength in the culture of business we have here in Utah. We believe small to medium businesses will be what pulls us out of the recession.”

“The economic downturn has created a liquidity problem—there aren’t as many investment opportunities for businesses needing capital as there once was,” said Ed Ekstrom, vSpring managing partner. “This has created an opportunity for us. We are fully funded and have money to invest. In fact, as far as I know most of the Utah venture capital firms have funds to invest. It’s good for us, it’s good for Utah, and it’s good for the businesses we invest in.”

Representing their respective firms, Ekstrom and Grizell were recognized for their investment accomplishments during a Deal Flow luncheon today. Four companies who had deals in 2008 were also recognized.

This marks the 14thyear MountainWest Capital Network has gathered, summarized and published the Deal Flow Report, which lists most of the business deals in Utah for the Utah business community and for others involved in the capital raising process. MWCN members were service providers, investors or participants in over 90 percent of the deals in Utah.

The Deal Flow Report identifies and recognizes companies that raised capital and participated in other significant business transactions, recognizes financing sources that provided capital to Utah-based business, and recognizes service providers and other professionals who supported capital raising efforts.

The Deal Flow Report is prepared and published in order to further the MountainWest Capital Network’s mission of fostering the dynamic flow of information about capital formation and distribution, educating and mentoring excellence, recognizing and rewarding business success and performance, and fostering synergistic relationships through networking.

Though the Deal Flow Report does not contain information on transactions that were either confidential or otherwise not publicly disclosed, the Deal Flow Report represents the most comprehensive annual assessment of capital raising and business transactions compiled in the State of Utah.

“We’re very proud to offer this report to the Utah business community each year,” said Watterson. “Our Deal Flow committee donates more than 2,000 hours of time, talent and energy to this worthwhile and ambitious project, and our sponsors provide the financial support necessary. We appreciate them all.”

MWCN members, sponsors, and guests of today’s luncheon received the Deal Flow Report. Others can obtain a pdf copy of the report at http://www.mwcn.org, which also provides a link to Silicon Slopes.

About MountainWest Capital Network

Founded in Salt Lake City in1983, the objective of the MountainWest Capital Network is to support entrepreneurial success and enable business growth through networking activities. It is Utah’s first and most effective business networking organization devoted to supporting entrepreneurial success. MWCN fosters dynamic flow of information about business growth through capital formation and distribution. It also provides networking activities to foster synergistic relationships, provides education and mentoring and recognizes and rewards business performance. MWCN has provided the Deal Flow Report since 1995. www.mwcn.org