Down decade for VCs: venture funding in Colorado is up, but nowhere near dot-com peak.

• Author: Peterson, Eric
• Position: QUARTERLY TECH REPORT

As Mark Twain might have put it., the rumors of venture capital's death in Colorado have been greatly exaggerated. But there are, well, some issues.

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Accordingto t he MoneyTree Report from PriceWaterhouseCoopers and the National Venture Capital Association, Colorado companies closed on $610 million in venture capital in 2011 alter bottoming out in 2010 when the state's companies reported raising about $475 million.

While both the local and national year-to-year trends are positive, Colorado's share of national venture-capital dollars has never bounced back to its dot-com-mania peak of around 4 percent in the halcyon days of 2000 ($3.8 billion of a nationwide $99 billion, according to the PWC/NVCA7 survey. In 2011, it was closer to 2 percent ($610 million of $28 billion.), and more than 90 percent of that came from out of. state. Companies based in Valley, meanwhile attracted about 40 percent of all VC money invested nationally in 2011. $11.6 billion in all.

"Colorado has in sonic ways waited For the money to come (0 us." says Steve Foster, president of the Colorado Technology Association. "It ain't coming to us. We have to go out and gel. it. We need to have conversations with the Last and West coasts. We need them to come here and dig some roots."

Foster says the state's tech sectors are flourishing, VC or no VC, "Colorado is a great place to start a company," he says. "The momentum is building, the community is growing, and the excitement is running rampant."

But all the excitement hasn't necessarily translated into more funding for local start-ups. "It feels like we're going backwards," says Foster. "Funding is straggling in from different areas. Colorado is a.n extremely innovative and entrepreneurial state, but most of the funding is coming outside of Colorado. There are some great angel investors and super angels, but there are no substantial VC firms in Colorado."

Brad Feld, a managing director at standout Boulder VC firm the Foundry Group, quibbles with the PWC MoneyTree numbers (largely because they're self-reported, and many angel investments go unreported). He declared an email interview on VC in Colorado "a waste of energy" after two questions.

Maybe Feld is cranky because of his industry's numbers: They pretty well stink. The average 10-year return on venture funds is careening toward negative 5 percent, as compared to around a roughly 4 percent positive for the S&P 500 during an anemic decade for stocks. There's also a "best and...