An Iowa-based venture capital company is moving to Salt Lake City and plans to help small companies "get over the next hump and hire more people," its leader said Wednesday.
MACC Private Equities Inc.'s move from Cedar Rapids to 15 W. South Temple, Suite 520, becomes effective March 1. Shareholders of the company have voted to appoint Atlas Management Partners, an affiliate of Salt Lake-based Wasatch Venture Fund, as investment adviser to MACC.
Kent Madsen, managing director of the Wasatch Venture Fund, will become MACC's president. MACC's wholly owned subsidiary is MorAmerica Capital Corp. MACC will maintain a presence in Cedar Rapids. Its other offices are in Portland, Ore., and Kansas City, Mo.
"We invest in companies that are non-technology focused doing revenues of roughly $10 million to $100 million in revenues," Madsen said. "We believe this is an underserved niche market, both in Utah and the nation in general.
"Our hope and belief is that as we move it to Utah, we will continue to invest nationally, but we'll also focus on Utah in particular."
MACC typically invests $2 million to $5 million in late-stage companies. It has $41.2 million in assets and a portfolio of 44 companies throughout the country. Since 1980, MorAmerica Capital has provided equity funding of more than $90 million to about 120 companies.
Madsen said MACC may top out at only 15 employees but plans to invest in companies that ultimately will have hundreds of workers.
"Our hope and our belief is as we make investments here, it's going to be to retain companies in Utah, help them grow, help them retain stellar management and also create opportunities for those who are graduating from universities," he said.
Madsen said MACC was interested in Utah because of various pro-investment, pro-growth strategies, including Silicon Valley Alliance, tax initiatives and the "fund of funds" bill.
The fund of funds is being established to help high-tech start-up companies grow. "We believe that will not only help our company but help the investments of the companies we invest in," Madsen said.
"MACC's decision to move to our state validates our belief that the Utah fund of funds will result in additional companies coming here and additional opportunities for Utah businesses because of the availability of venture capital," Gov. Olene Walker said.
David Harmer, executive director of the Utah Department of Community and Economic Development, noted that many tech start-ups leave Utah to grow because they can't find venture capital, or they move closer to VCs that invest in them. "We know with the investment they (MACC) make here, they're not going to encourage them to move somewhere else," Harmer said.
While MACC investments in tech companies is only about 10 percent of its portfolio, Madsen left open the possibility for that to increase. "We will continue to do about 10 percent and, as we grow, maybe even more," he said.
The governor thanked the company for coming to Utah but issued this challenge to Madsen: "Grow that venture capital. We need it."
E-mail: bwallace@desnews.com