Risky business

After starting his professional life as a Presbyterian minister, Patrick Bultema has become an evangelist for high-technology entrepreneurs.

Bultema, 48, was a founder, executive or director of 18 companies, raising more than $300 million in venture capital financing in 13 years, before jumping to the other side of the table two years ago.

He’s now a venture partner in Colorado Springs of vSpring Capital, a Salt Lake City-based venture capital firm.

“I love the business of startups,” Bultema said. “I get uncomfortable when I’m not in a rapidly changing environment. I want to know what the next big idea is and help to make it come to life.”

Bultema readily admits his interests lie in coming up with ideas, setting a vision and getting a company started, not running a growing company.

Bultema believes so fervently in the economic value of startup companies that he is writing, with the help of a ghostwriter, a book to be published next year, “The Long Road to an Overnight Success: A Roadmap for Successful Startups.”

The book is largely based on a daylong seminar he offers through the business school at the University of Colorado at Colorado Springs, where he will serve next year as entrepreneur-in-residence to help teach classes in financing startup businesses.

Bultema is a “visionary who always has been ahead of his time,” said Bill Auvil, a former vice president at Front-Range Solutions Inc., where Bultema was chief executive in 2002. “He can predict the future.”

Clark Maxam, a UCCS assistant professor, said he came up with a volunteer position for Bultema to beef up the business school’s curriculum for entrepreneurs and expand his seminars on startups to a wider audience of students.

Maxam said he recruited Bultema, in part, because of his strong opinions that often are at odds with conventional wisdom taught in many business schools.

“There is a certain no-non- sense directness to him. You always know where you stand with Patrick and what his opinion is,” Maxam said. “He has definite ideas about what should be done.”

Bultema works out of his Old North End home and holds meetings either at businesses in which vSpring has invested or is considering investing, or at the El Paso Club, a private downtown dining club of which he is a member.

“Now that I’m on the venture capital side, I realize that a significant percentage of venture-backed companies will be write-offs, with no return at all,” Bultema said.

“About half will be complete busts and only 10 to 20 percent will end up being big successes.”

Venture funds are leading a transformation of the U.S. economy from a base of manufacturing to a base focused on creativity with software as its “epicenter,” Bultema said.

One in nine U.S. workers is now employed by a company that was financed at some time by venture capital, according to the National Venture Capital Association.

“Venture financing is the engine that is fueling the U.S. economy. I am passionate about the startups and the impact they have on the global economy,” Bultema said.

“I am an adherent to the transformative power of economic growth to do dramatic good.”

Bultema grew up on a cattle ranch in northern California, in an immigrant family that spoke Dutch, English and Swedish, and was encouraged to get an education.

After earning his undergraduate degree at California State University at Chico, Bultema earned a master’s degree in divinity at Princeton University Theological Seminary.

He then spent three years as an associate pastor at University Presbyterian Church in Fresno, Calif.

Although he no longer works full time in the clergy, he is still ordained and active at First Presbyterian Church in downtown Colorado Springs.

He left the ministry when a small Fresno-based book publisher, Mike Murach & Associates, asked him to write books about using personal computers and early software programs just as PCs were becoming popular.

Eventually, Bultema was put in charge of a line of books for technicalsupport workers and caught the attention of high-tech publishing giant Ziff Davis Inc., which hired him to work for its newly acquired Help Desk Institute, a trade group for technical-support professionals based in Colorado Springs.

“The whole high-tech support area was really an emerging field at that time. I quickly arrived at the conclusion that I had to become a student of the industry,” Bultema said.

Ron Muns, founder and now chief executive of the institute, called Bultema “one of the more intellectual guys in the field, very thoughtful and opinionated. He tends to be the first to speak up and is one you need to listen to.”

Muns has asked Bultema to help him organize in November the first of what will be an annual meeting in Las Vegas of entrepreneurs, venture capitalists and merger and acquisition professionals in the industry that provides tools used by the informationtechnology industry.

Bultema quickly became one of the technical-support industry’s leading experts, sought out by venture capital funds for his advice on investing in startups.

He grew restless, however, watching others make money from the fledgling industry.

“One of the companies in our industry had gone public with a very successful public offering, and the CEO told me ‘You were right about this industry, and now I’m very wealthy,’” Bultema said. “My thought was, ‘Where is my stock?’

“I realized I was not involved in the moneymaking end of the industry. That’s when I decided to get involved in the startup end of the industry,” Bultema said.

After becoming a director of and advising several startup companies, Bultema started and served as chairman of Salt Lake City-based Knowlix Corp., which developed software that managed a database of common problems and solutions used by help-desk professionals.

Bultema got his first payday — he declined to say how much — when Peregrine Systems Inc. bought Knowlix in 1998.

Peregrine, itself acquired in 2005 by Hewlett-Packard Co., also bought his second company, Denver-based Barnhill Management Group, which specialized in systems integration for the help-desk and information-technology industries.

He spent the next two years serving as a board member of and adviser to several technology companies, and he helped the Chinese government set up and run a model orphanage and training center in the wake of adopting two of his six children there.

Bultema returned as a full-time technology executive in 2001, when fellow board members at FrontRange Solutions Inc. asked him to become chief executive and lead a turnaround of the struggling company, which made software to automate help-desk management and customer information for sales personnel.

“The company had lost the confidence of shareholders, and the stock was in the basement.

“I was asked to get the company to a stage where it could be taken private,” Bultema said. “I ran my leg of the relay and then handed off to someone else.”

FrontRange had a market value of $20 million when Bultema took over and sold in 2005 to Francisco Partners for nearly $200 million, but the turnaround required hundreds of layoffs.

“The company had lost a lot of money, so we had to bring down the cost structure, which is a euphemism for losing your job,” Bultema said.

“It was one of the most painful and unpleasant things I have had to do in business. But you have to make the hard decisions or everybody loses their jobs,” Bultema said. “If it ever becomes easy to do layoffs, you have lost your soul in the process.”

After a year of serving on boards and consulting for startups, Bultema was asked by the venture capital funds and investors in XAware Inc. to become chief executive and help it raise $10 million.

XAware products allow businesses using different types of software and computer systems to exchange information.

The lead investor in that round of financing, vSpring Capital, asked Bultema in 2005 to join the $500 million Salt Lake City-based venture capital fund as its Colorado partner.

Ed Ekstrom, a managing director of vSpring, said the fund recruited Bultema because “he just doesn’t look at the surface; he goes fairly deep. He looks at the depth and breadth of a problem and is very creative at applying what he learns to create elegant solutions — he can take a complex problem and come up with a simple solution.”

While at vSpring, Bultema has gotten the fund to invest in San Francisco area-based Aeroprise Inc. and India-based Sybrant Ltd., software companies that both have small operations in the Springs.

Bultema serves on the boards of both companies and is chairman of Aeroprise.

Bultema doesn’t expect he will ever retire and plans on remaining involved as an investor, board member and consultant to many more startup companies.

“If you can stomach the risk, startups are an exciting and rewarding vocation,” Bultema said. “You have to live with the reality that you can invest three to five years of your life and it could end up being a complete train wreck.”

CONTACT THE WRITER: 636-0234 or wayneh@gazette.com

PATRICK BULTEMA

Hometown:

Richvale, Calif.

Education:

Bachelor’s degree, California State University at Chico, 1981; master’s degree in divinity, Princeton University Theological Seminary, 1984

Position:

Partner, vSpring Capital, Salt Lake City

Previous jobs:

Associate pastor, University Presbyterian Church, Fresno, Calif.; author and director, Mike Murach & Associates (book publisher), Fresno, Calif.; chairman and general manager, Help Desk Institute, Colorado Springs; founder and chairman, Knowlix Corp., Salt Lake City; executive vice president and chief operating officer, Barnhill Management Group, Denver; co-chairman, Chinese Children Charities; president and chief executive, FrontRange Solutions Inc.; president and chief executive, XAware Inc.

Professional involvement:

Advisory board member, University of Colorado at Colorado Springs College of Business and College of Engineering, Colorado Institute for Technology Transfer and Implementation, and University of Colorado Fitzsimmons BioBusiness Incubator; strategic advisory board member, IT Infrastructure Management Association

Hobbies:

Private pilot and private aircraft owner, technical rock climber, fly fisherman, scuba diver, runner

Personal:

Wife, Lily, married 27 years; children, Hans, 25; Sven, 23; Jarred, 21; Brianna, 19; Annika, 10; Ellie, 8

PATRICK BULTEMA’S 10 MYTHS ABOUT VENTURE CAPITAL

1. If only I get venture capital, my business will be successful

Reality:

Venture capital flows to opportunity

2. There is a shortage of venture capital in Colorado

Reality:

The state ranks fifth in venture investments

3. If the venture capitalist says maybe, it looks promising

Reality:

There is no upside to the venture capitalist saying no

4. Venture capitalists are into cash flow

Reality:

They sell their stake long before the company makes a profit

5. Venture capitalists always have money to invest

Reality:

It depends on where a fund is in its investment cycle

6. Venture capitalists like a quick flip

Reality:

The length of a fund’s investment cycle depends on many factors

7. All venture capital funds are pretty much the same

Reality:

Funds differ widely in investment strategy, style and focus

8. Venture capitalists read 50-page business plans

Reality:

The plan should be 10-12 pages

9. Venture capitalists invest in management teams

Reality:

You can fix a team, but you can’t fix the market it’s targeting

10. Venture capitalists want at least a 40 percent return

Reality:

They want a return in multiples of the original investment

SOURCE: Patrick Bultema speech to University of Colorado at Colorado Springs students, April 2007