Getting to Know the Utah Fund of Funds

Part I: A Local Habitation and a Name

By Jeremy Neilson and Kimball Thomson

In recent months, we have received numerous inquiries to describe the Utah Fund of Funds: What it is; its purpose; how it's structured; and its progress, direction and future.

This first email will provide an introductory overview of the Fund of Funds. Future emails will explore the Fund of Funds and its portfolio companies in further detail.

What Is the Utah Fund of Funds?
The Utah Fund of Funds (Utah FoF; www.UtahFoF.com), a major economic Utah development program, was created by the Utah Legislature through the passage in 2003 of House Bill 240, the Venture Capital Enhancement Act. The Utah Fund of Funds' mission is to increase the amount and diversity of capital funding available to help the state's early-stage and growth companies to grow, prosper and mature in Utah.

The Utah FoF does not invest directly in companies. Rather, it invests in quality venture firms within and outside Utah, who in turn commit to explore opportunities to invest in promising deals in the state.

Financing and Structure
The Utah Fund of Funds is financed by a third party, and is structured to be financially self-sustaining. The program's first $100-million round of the Utah Fund of Funds was financed by Deutsche Bank. The program is supported by State of Utah contingent tax credits. These tax credits would be used only in the extremely unlikely event of a shortfall.

The Utah FoF receives oversight from two boards: The state's public Utah Capital Investment Board (UCIB), is responsible for the Utah tax credits and plays a critical role in monitoring Utah FoF financing and reporting its status to the Utah legislature. The non-profit, private-sector volunteer Utah Capital Investment Corporation (UCIC) approves financing in concert with the UCIB, approves all portfolio investments and selects and manages the outside investment advisor.

Portfolio
Currently, the Utah FoF portfolio consists of nine investment firms, which range from seed stage to later-stage growth companies, and across a variety of industry areas, from life sciences to information technology, retail, consumer and business services. Three of these firms - Cross Creek Capital, the University Venture Fund and vSpring Capital - have their headquarters in Utah. One firm, Highway 12 Ventures, hails from Boise, Idaho. Apax Partners is a New York City-based buyout firm. RWI Ventures, 5AM Ventures, Rosewood Capital and SV Life Sciences operate from the global epicenter of venture capital, the San Francisco Bay Area. SV has offices in Boston and London, while 5AM also has a second home in Waltham, MA.

Jeremy Neilson serves as managing director for the Utah Fund of Funds. Kimball Thomson is an Alpine-based freelance writer, and president and CEO of Next Phase Communications, an integrated public relations and marketing firm that represents the Utah Fund of Funds.

>> Read the second article: Part II: Structured for Maximum Impact

>> Read the third article: Part III: A Portfolio with Purpose

>> Read the fourth article: Part IV: The Importance of the Utah Fund of Funds: Entrepreneurial Voices

>> Read the fifth article: Part V: Progress and Future of the Utah Fund of Funds

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