Appian takes break from new deals

Don’t expect Appian Ventures to add new portfolio companies in 2009.

Chris Onan, a partner with Denver-based Appian, says that the firm plans to reserve remaining dry powder to support its 18 existing portfolio companies. At the same time, Appian doesn’t want to begin raising a new fund until it achieves a few more exits. Just two companies from its 6-year-old inaugural fund have been acquired, and none has gone public.

“We had some conversations in the fourth quarter about doing a couple of new deals, but ultimately figured it would be best to hold onto the cash for the companies we already have,” Onan says. “It’s not like managing 18 portfolio companies isn’t enough to keep us busy.”

Onan adds that the firm has no plans to replace Philip Dignan, an Appian co-founder who quietly left the firm to run VCM Technologies, a Houston-based energy technology company. Instead, it will stick with its remaining three partners, one operating partner and an advisory network of eleven “connectivity partners,” including Dignan.

Appian was formed in 2002, and focuses on early-stage IT companies in the Rocky Mountain region. It closed its $80 million debut fund in 2003. Appian’s debut fund has invested a total of $64 million in 20 companies, with the majority (13) in the computer software sector. Another three are in the Internet sector, two in computer hardware, one in communications and one in financial services, according to Thomson Reuters (publisher of VCJ).To date, two of Appian’s portfolio companies have been acquired: Evolutionary Technologies International Inc., an Austin, Texas-based developer of software tools and utilities for data integration, and LeftHand Networks Inc., a Boulder, Colo.-based developer of software for storage area networks.LeftHand was bought by Hewlett-Packard Co. for $360 million in October 2008. It had previously raised about $85 million from about a dozen venture firms, including Appian, Garage Technology Ventures, J.P. Morgan Partners and Sequel Venture Partners, according to Thomson Reuters.Evolutionary Technologies was acquired by Versata Inc. in May 2008 for an undisclosed amount. Appian, Access Venture Partners, Osprey Ventures and the company’s management had previously acquired the company for $6.5 million in March 2006, according to Thomson Reuters. Prior to that, Evolutionary Technologies had raised close to $22 million in venture funding from BancBoston Capital, Cornerstone Equity Investors, Kinetic Ventures, Menlo Ventures, New Enterprise Associates and others between 1991 and 1996, according to Thomson Reuters. —Dan Primack with additional reporting by Lawrence AragonDEALWATCH: Five recent investments by Appian Ventures

AdPay Inc._Online classified advertising solutions

Nunami Services LLC_Services to facilitate securties lending

OpenLogic Inc._Open source solutions to acquire and support open source software

Ping Identity Corp._Secure Internet single sign-on software

SkyeTek Inc._RFID reader technology in multiple frequencies

Note: Investments made from October to December 2008. Sources: Thomson Reuters