Launching a Startup? You Should Think About Denver.
Colorado is naturally primed for entrepreneurs. Not only is our governor, Jared Polis, the co-founder of successful seed accelerator Techstars, but the state’s capital of Denver is fast becoming recognized as a more affordable and greener alternative to Silicon Valley. Companies like Salesforce, Google, Facebook and, soon, Palantir, all have offices there. But it’s not just the big players who have recognized Denver’s potential.
The startup scene has long been blossoming, taking advantage of the city’s talent pool, resources, cost of living and quality of life. It’s no wonder Denver is in the top 25 startup ecosystems in the world, according to Startup Genome, and the growth of nearby Boulder is seen as a model for startup communities in small cities.
As one of the founders of the world’s largest pre-seed startup accelerators (and a Colorado resident myself), I’m uniquely positioned to observe the competitive edge Denver has provided many of the entrepreneurs we work with. If you’re tantalized by the Mile High City’s startup landscape, here’s an insider’s guide to starting a new business in Denver.
In 2019, startups in Denver received $931 million in venture capital investment and came in eighth on Bloomberg’s list of the United States’ most educated cities. The city has a large tech labor pool that accounts for 6.7 percent of the state’s overall workforce. You would be hard pressed to find a city with more events dedicated to innovation, networking and early stage support for businesses.
On the financial side, there are multiple government grants and tax incentives that increase access to credit, cover relocation costs and facilitate the commercialization of new products. The cost of living in Denver can also be up to 44 percent lower than San Francisco.
But perhaps the biggest draw for Denver is the lifestyle. The city is packed with cultural activities, boasts more than 5,000 acres of parks and is only a short drive from the Rocky Mountains — giving it a unique mix of urban living and contact with nature on a massive scale. It also has a young, diverse population.
The city has a strong community focus. Even amid the COVID-19 pandemic, Denver has stepped up its entrepreneurial solidarity. The Pandemic Impact Fund is offering sizable financial support for tech companies, while the Rockies Venture Club is hosting HyperAccelerator, a virtual one-week program to grow startups addressing direct and indirect effects of the crisis. Elsewhere, the group of innovators Energize Colorado is helping connect businesses with nonprofit leaders to spur transformative economic growth.
Local Success Stories
Seven out of 10 businesses in the Denver metro area turned a profit in 2019. One of the most famous Denver startup success stories is SendGrid, a communications platform for transactional and marketing email. The company was incubated by Techstars in Boulder, went public on the NYSE in 2017, and was ultimately acquired by Twilio in 2019. Instead of relocating to San Francisco (where its parent company is based), SendGrid remained in Denver — a great sign of the city’s economic health. Other companies you might recognize include eBags, Mapquest, FullContact or rising stars like BlueSuit and CULedger.
Denver startups are also gaining traction when it comes to impact and innovation: Sunday, a startup offering green lawn care delivered directly to customers, was included in Time’s 100 Best Innovations of 2019. While Crusoe Energy Systems, a solution to natural-gas flaring that causes greenhouse gases, has helped eliminate 35 million cubic feet of natural gas in less than two years.
Helix TCS, software that provides compliance and security solutions in the legal cannabis industry, ranked 32nd in Deloitte’s list of the fastest-growing companies in North America after seeing an impressive 3,805 percent growth in revenue between 2015 to 2018.
How to Find Support and Guidance in Denver
The startup community in Denver is particularly strong thanks to a number of public organizations that facilitate local economic development. In particular, the local government provides a selection of resources to new businesses. First-time founders can make use of the startup checklist from the Denver Economic Development and Opportunity office, which is available in seven languages. For financial support, entrepreneurs can take advantage of the MicroLending Program for loans of up to $50,000, the Revolving Loan Fund to cover 25 percent of business expansion projects and other tailored financing opportunities below market rate.
The Denver government also backs The Commons on Champa, a nonprofit public workspace for entrepreneurs with free Wi-Fi, events and workshops that help 170,000 entrepreneurs every year.
The Business Bootcamp helps people planning to start a full- or part-time business, including sessions on how to market products and manage cash flow. Will It Fly is an evening workshop where attendees learn how to test business ideas via a 10-step evaluation process. And the Women’s Entrepreneurial Council aggregates resources and expertise to back women-led businesses in Colorado.
The nonprofit Rockies Venture Club has a range of educational startup events. Workshops range from pitching, patent strategies, crowdfunding, valuations and team building. Its RVC academy is a specially designed curriculum to take founders’ knowledge to the next level. RVC additionally hosts MasterMind sessions where entrepreneurs can deep dive into each others’ strategies to help with specific challenges.
The Denver Metro Small Business Development Center (SBDC) combines the knowledge of federal, state and local governments with the education system and private sector to accelerate startups in the area. The SBDC offers free one-on-one consulting and training programs for startups, as well as online resources that teach how to create a budget, conduct market analysis and access credit. The Small Business Navigator also walks entrepreneurs through the logistics of setting up a company in Denver, including getting a state tax identification number and a business license.
Entrepreneurs at the idea stage can leverage our own program, the Founder Institute, which will be running a digital program this year, led by local startup leaders Alex Cooper (founder and executive director of The IronCEO) and Diane Bailey (founder of RipTide). Since first launching in Denver in 2010, we have helped build 81 promising technology companies in the region, like Kindara (acquired in 2018) and Cipherpoint (acquired in 2017).
For those willing to go a bit further out of town, Techstars runs an accelerator program out of Boulder. Each year, 500 startups are selected to join its three-month program, complete with hands-on mentorship, funding opportunities and access to the vast Techstars network. Other notable seed accelerators and incubators in Colorado include Innosphere Ventures, Boomtown Accelerators and Exponential Impact. For more information about extra resources, check out this Denver Ecosystem Guide our team put together.
Plugging Into the Community
Denver makes it easy to connect with like-minded entrepreneurs and mentors. Denver Startup Week has been running for eight years and is the biggest free networking event in North America, bringing together more than 200,000 people to participate in 359 programs. Startups can get involved in the event by hosting presentations, submitting blogs, taking over official social media accounts and chairing discussion panels.
Colorado Startups offers connections and resources to plug founders into the Colorado ecosystem — the largest online startup community in the world. Here, entrepreneurs, investors and startup enthusiasts can meet and exchange insights. The website also has an integrated calendar showing startup events taking place throughout the state.
Another packed calendar comes from Silicon Flatirons, which brings together stakeholders from across different sectors — entrepreneurs, academics, lawmakers — to talk about pressing issues and catalyze positive impact. The online and in-person events range from panel discussions and roundtables to guest speakers and lively debates, and are extremely valuable for entrepreneurs looking to meaningfully disrupt their industry.
There are also opportunities to socialize via Startup Denver MeetUp, which features fireside chats, seasonal parties and investor introductions. There is a monthly event dedicated to Women Who Startup, which aims to inspire and build connections between female entrepreneurs in Denver. Elsewhere, 1 Million Cups puts on a weekly virtual event where Denver entrepreneurs can provide valuable feedback to start-up presenters.
Alternatively, SCORE Denver has more than 80 retired entrepreneurs and executives running seminars and mentoring programs for startup founders. All information is free.
Finding Talent in Colorado
As of July of 2020, the unemployment rate in Denver fell to 7.8 percent, which highlights the strong demand for its highly educated pool of talent. Startups therefore have to move quickly to secure top candidates, many of whom emerge from colleges like Colorado College, the University of Colorado–Denver and Colorado Technical University–Colorado Springs. The majority of schools in the area have job fairs where startups can open their doors to young and promising talent. Startups can also showcase their vacancies by speaking at business schools in the city, such as CU Denver Business School and MSU Denver.
Another good route to hire people is with Denver Economic Development and Opportunity, which offers an expansive training and wage subsidy program, enabling startups to source and hire talent in a fast and affordable manner.
There are plenty of coding camps that are ideal recruiting grounds for developer and software engineer roles: Flatiron School, General Assembly and Hack Reactor are a few of Denver’s most popular courses.
Accessing Early Stage Funding
The Mile High City is no stranger to fundraising rounds, and founders in Denver can tap into a multitude of channels to secure the right funding. There are more than 6,000 angel investors in Denver alone, along with investors groups like the aforementioned Rockies Venture Club and Denver Angels. In terms of events, Angel Capital Summit is the best place to connect with angel investors, drawing 400 participants including seasoned angel investors, private investors and early stage ventures.
Startups can present their pitch at the summit, which is free and welcomes entrepreneurs from all sectors. Previous companies that have pitched there have collectively raised above $30 million.
14 of Denver’s Best-Known Venture Capital Firms, Offering Early to Growth-Stage Funding
Another option is to seize the startup grants offered by privately run organizations. The Denver Foundation (TDF) has several different grants ranging from $5,000 to $20,000 for companies working in areas like education, leadership and equality.
Rocky Mountain MicroFinance Institute (RMMFI) acts as both a business-development program and a lending service. As founders move through a program, they can access four types of loans: a $500 seed loan, a $2,500 launch loan, a $5,000 thrive loan and a $75,000 growth loan.
For companies with high-growth, scalable impact and a community-focused vision, The Colorado Impact Fund (CIF) invests $1 to $3 million in initial funding rounds. In return, the fund provides operational support, talent and recruitment development and mission and impact alignment.
For startups expanding food access for low-income or disadvantaged communities, Colorado Fresh Food Financing Fund provides up to $50,000. However, only businesses past the idea phase with a completed business plan and financial projections are eligible. For female entrepreneurs, the Amber Grant awards monthly sums of $10,000, as well as a $25,000 grant to one applicant per year.
Denver’s vibrant business community and plentiful resources have no doubt fueled its startup success, shaping a city that welcomes entrepreneurs from a professional, personal and recreational perspective. Denver is well into its growth stage and is now scaling as an international startup hub. Ask yourself: Could this be the place that can make your big idea a reality?