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Last week’s invite-only Colorado Venture Summit in Denver brought together many great entrepreneurial minds within Colorado and many VCs from inside and outside the state. One such meeting of the minds was a panel discussion on the outside view of tech companies was moderated by Arik Hesseldahl of Recode.
Quick fact: Colorado ranks as the third most venture capital invested per capita of any state and secured half a billion in 2013. But, as any CEO would tell you, we need more access to capital.
At the Summit, Erik Mitisek, CEO of Colorado Technology Association, said that “fueling capital resources and the relationships between them and our entrepreneurs will push the whole state forward." Here’s tips from three VCs from outside Colorado who are working to bridge that geographical gap:
Mike Majors, Managing Director, Siemens Venture Capital from Boston
- Who he invests in: “We invest in industrial tech. More than 10 years ago, we began investing in Colorado companies. Now we have four investments: LogRhythm, Zolo Technologies, Tendril and Aventura.”
- How he views building venture relationships: “Venture is really a local relationship. For those of us who have to jump on the plane it’s a real challenge to keep the same report as we have with local cos. We can hop in the car and have a conversation with the founder. Silicon Valley investors can find a pool of startups in their backyard.”
- What he looks for as an investor: "With our investments, we don’t have to push for the exit. We don’t want to force or artificialize the growth.”
- What companies should look at when choosing an investor: 1) Will they be there for the future? 2) Are they a strategic-driven group? What is behind their investment? 3) What is the value the corporate parent can bring? 4) Due diligence.
Jeff Diehl, Managing Director, Adams Street Partners from Chicago
- Who he invests in: “We have 14 deals, over $100 million in 10 years invested in Colorado companies.”
- The state of talent: “The landscape in Colorado has changed a lot: the seasoning of founders and CEOs has brought a different level of talent. They can pull a team together. It’s not as difficult to recruit talent from Silicon Valley, although product management talent is hard to find out of Silicon Valley.”
- What he looks for in an investment: “Emotional intelligence and a scalable CEO who can recognize when the position outgrows them and who controls the organizational structure. We’re looking also at their expenditures: what are they burning in a month?”
- What companies should do when choosing an investor: Talk with other CEOs who will help give a rounded picture of the investor. Despite being connected to a large fund and investing body, Jeff noted that founders should look at the the exact investor of the fund. “Investing is like a golf game, it’s an individual sport. We come back on Friday and compare scores.”
Geraldine Alias, Principal, North Bridge Growth Equity of Palo Alto
- Who she invests in: “We’re a minority equity investor with 15 investments. We will not stop until we invest in colorado. Colorado is the perfect for us.”
- What they look for in a company: “Are they self-aware? Do they want a partner?”
- What companies should look for when choosing an investor: 1) Are the investors reachable? 2) “Every fund has a different return spectrum philosophy, maybe its not worth your time.”
- The ideal growth rate she is looking for: 30 to 50 percent.