Boulder Ventures closes new $61 million fund

BOULDER — Boulder Ventures Ltd., one of the region’s oldest venture firms, just completed raising its sixth investment fund, worth $61 million, bringing the total raised during the past 20 years to $371 million.

About 60 percent of the 63 companies backed by Boulder Ventures have been successful, said company founder Kyle Lefkoff – either by still being in business, completing an initial public offering or being acquired, resulting in a profit for shareholders. Lefkoff declined to discuss which investments didn’t pan out.

Ben Veghte, with the National Venture Capital Association, said it’s difficult to say how that ranks with other similar-sized VC firms with two or three partners.

“Success is in the eye of the beholder,” he said. “There are a lot of different ways to measure it.”

A couple of years ago, Harvard Business School senior lecturer Shikhar Ghosh told the Wall Street Journal that about 75 percent of U.S. venture-backed startups fail. That would make Boulder Ventures’ record an exception to the rule for small regional VCs.

Lefkoff
Roshko

Lefkoff deflects the limelight, saying the key to the firm’s success is all about the entrepreneurs it chooses to back. He said Boulder Ventures invests in serial entrepreneurs in the life-science and information-technology industries that have demonstrated success in the past.

“It’s not about me. It’s not about Peter (Roshko, a general partner in Boulder) or Jonathan (Perl, a general partner in Chevy Chase, Md.). It’s about the serial entrepreneurs that through their efforts allow us to have conviction about their ideas and abilities.”

But the trio does get in the trenches with the entrepreneurs they support.

One of Boulder Ventures’ recent successful exits is Boulder-based Rally Software Development Corp. (NYSE: RALY), led by Tim Miller, Ryan Martens and Jim LeJeal. Boulder Ventures was among the investors that backed the software firm that went public in 2013. Boulder Ventures invested $12.6 million and realized a return of $76.1 million.

Miller, Rally’s chief executive, said Boulder Ventures’ partners brought sage advice and knowledge that led to Rally’s IPO.

“As Rally has grown, they’ve been by our side to support growth and drive shareholder value. I think they are the leading boutique venture capital firm in Colorado,” he said.

Miller drew Boulder Ventures’ support because Lefkoff was impressed with Miller’s determination when he was in between startups.

“Tim spent a lot of time in our offices working out details for launching Rally,” Lefkoff said. “He impressed us, allowing us to have that conviction in what he was doing.”

Boulder Ventures focuses primarily on Colorado and the mid-Atlantic states because it has established networks in these areas – Lefkoff and Roshko in Colorado and Perl back east.

Bill Marshall, CEO of miRagen Therapeutics Inc. in Boulder, has been backed by Boulder Ventures several times, including at Dharmacon Inc., a life-sciences company based in Lafayette that was sold to Fisher Scientific International Inc. (NYSE: FSH) in 2004 for $80 million in cash. Boulder Ventures is invested in and working with miRagen, of which Marshall is a co-founder.

“MiRagen could be the next big biopharma coming out of Colorado,” Lefkoff said. MiRagen aims to be a global leader in translating microRNA discoveries into breakthrough therapies that improve human health, he said.

Another healthy exit for Boulder Ventures was Louisville-based Linerate Systems. The firm invested $3.4 million in the company, mainly because it was headed by Steve Georgis, Matt McConnell and Manish Vachharajani, all of whom previously had been involved with successful startups. Linerate’s software, which enables cloud- and web-services providers to scale their services, caught F5 Networks Inc.’s eye in 2013. F5 purchased the company for $125 million, providing shareholders a return of $31 million, Lefkoff said.

Georgis said Boulder Ventures provided great insight and support during Linerate’s growth.

“They sit on the same side of the table as the entrepreneur and have a patient, strategic approach to maximizing the value of a company,” he said.

Before founding Boulder Ventures, Lefkoff cut his teeth in venture capital working for Bill Coleman and R.C. “Merc” Mercure Jr. at Colorado Venture Management in Boulder, which the pair founded in 1980.

“They were my mentors, and we (Boulder Ventures) are using the same model they used. There’s no secret sauce to our success,” Lefkoff said.

Mercure is considered a founding father of entrepreneurship in Boulder, drawing national attention by starting companies and also backing companies through his venture capital firm. His biggest accomplishment was co-founding Ball Brothers Research Corp., the predecessor to Ball Aerospace & Technologies Corp.

Mercure believes it’s “pretty amazing” that a small regional VC firm these days can make it to a sixth fund.

“VCs like Kyle’s are getting rarer and rarer, especially after the economic shakeout in 2008. Small VCs have had a hard slog,” he said. In the past 10 to 15 years, Mercure said, angel investors have been making larger investments, private-equity firms are doing more of what VCs have done historically, and the size of investments are larger, causing the number of small regional VCs to dwindle.

Of the 63 Boulder Ventures-backed companies, 40 were started in Boulder, 20 in mid-Atlantic states and three in other places. Ten companies backed by Boulder Ventures have gone public, including seven from Boulder; and another 13 were sold to strategic buyers at venture-like multiples, of which nine were in Boulder.

Doug Storum can be reached at 303-630-1959, 970-416-7369 or dstorum@bizwestmedia.com.

BOULDER — Boulder Ventures Ltd., one of the region’s oldest venture firms, just completed raising its sixth investment fund, worth $61 million, bringing the total raised during the past 20 years to $371 million.

About 60 percent of the 63 companies backed by Boulder Ventures have been successful, said company founder Kyle Lefkoff – either by still being in business, completing an initial public offering or being acquired, resulting in a profit for shareholders. Lefkoff declined to discuss which investments didn’t pan out.

Ben Veghte, with the National Venture Capital Association, said it’s difficult to say how that ranks with other similar-sized VC firms with two or three partners.

“Success is in the eye of the beholder,” he said. “There are a lot of different ways to measure it.”

A couple of years ago, Harvard Business School senior lecturer Shikhar Ghosh told the Wall Street Journal that about 75 percent of U.S. venture-backed startups fail. That would make Boulder Ventures’ record an exception to the rule for small regional VCs.

Lefkoff
Roshko

Lefkoff deflects the limelight, saying the key to the firm’s success is all about the entrepreneurs it chooses to back. He said Boulder Ventures invests in serial entrepreneurs in the life-science and information-technology industries that have demonstrated success in the past.

“It’s not about me. It’s not about…