When you think of Colorado, startups and venture capital don’t come to mind. Snow-capped mountains, Birkenstock-clad hippies, and the Denver Broncos are more like it.
So it came as a pleasant surprise when I met Colorado-based venture capitalist Seth Levine during the Democratic National Convention. Patrick Ward, a New York transplant who founded tech PR firm 104 West Partners in Denver, was nice enough to set up a meeting with Levine and I at the swanky Capital Grille in the city’s attractive downtown district.
[Driving to Denver from the airport, a few miles outside of town.]
By the time lunch ended, I came away with the impression that Colorado had a lot more going on technology-wise than I realized, and I think it’s role will only grow in the future as the New West takes on an increasingly prominent role in the tech economy. Colorado Governor Bill Ritter, who was quite active during the DNC, is trying to position his state as a leader in developing a post-fossil-fuel economy. (Ryan Lizza’s feature in The New Yorker, “The Code of the West,” is required reading that nails why the West is becoming an growing force in green energy and Democratic politics.)
Last year, Levine and a few of his associates split off from Mobius Venture Capital (they are closing out the management of one Mobius fund, though) and launched Foundry Group from Boulder, Colorado. Yes, that Boulder. The rustic foothill town where poet Allan Ginsberg set up Buddhist-inspired Naropa University, and hippies ruled the earth. When I drove cross country in 1990 and stopped in Boulder I don’t recall seeing one computer in the whole patchouli-smelling town.
Now, Levine tells me that over the last 15 years Boulder has become a bit of a tech hotbed. His best argument: After acquiring @Last Software in 2006, a Boulder-based software company, Google recently set up an office in town with 200 people, Levine is proud to tell me.
“Entrepreneurs got their feet wet during the 1990s,” says Levine. “There were a few home runs. Today, there is a good and steady stream of solid technology assets coming out of the area.” Among the big wins: In 1999 Exodus Communications acquired Service Metrics for $280 million, and in 2004 IAC acquired ServiceMagic for reportedly several hundred million.
[Denver from the 50th floor of the Qwest building with the Pepsi Center and Invesco Field in the foreground.]
Foundry Ventures is one of a new breed of back-too-basics VC firms that are focused on funding early-stage tech startups. By the end of 2007, the firm had raised an impressive $225 million, $50 million more than its initial fund-raising target. Foundry’s strategy is to invest in certain themes. Its top themes are human computer interaction, gaming and infrastructure software.
In addition to Foundry, Boston-native Levine noted that Colorado boasts several area VC firms, including Boulder Ventures, Vista Ventures, High Country Venture and two older Denver-based firms, Centennial Ventures and Meritage Funds.
Besides a growing pool of venture capital, Colorado also enjoys some of the other key ingredients for creating a Silicon Valley-like economy: several good universities, a rising number of entrepreneurs, an appealing climate and lifestyle, and hub of larger established tech companies, including Qwest Communications, Echostar, Level III, and the former TCI.
To nurture the entrepreneurial community, last year Foundry helped launch TechStars, a Colorado-based tech incubator. Among the first class, says Levine, seven of the 10 companies that participated received some type of funding.
If you want to learn more about the Colorado venture scene, a good place to start is Venture Capital in the Rockies (VCIR), a conference that has been running for 26 years. Next spring, in the mountains at Beaver Creek, Colorado, about 20 startups will be there to tell their stories, along with a great cast of speakers and moderators. Not bad, eh?
Tags: @Last Software, Allan Ginsberg, Bill Ritter, Boulder VEntures, CentennialVentures, Denver, DNC, Echostar, Foundry Group, Google, High Country Venture, Level III, Meritage Funds, Naropa, Qwest Communications, Service Magic, Service Metrics, Seth Levine, TCI, VCIR, Venture Capital in the Rockies, Vista Ventures