Colorado Venture Summit Pairs Top Entrepreneurs, Out-of-State VCs

Last Thursday, the Colorado Venture Summit brought together the CEOs from some of Colorado’s top startups and tech companies and the partners of venture capital firms from across the country. The goal was to help connect promising or thriving companies with investors who are not familiar with Colorado, according to David Gold, chair of the organizing committee. Gold is a managing director at Access Venture Partners, a Denver-area venture capital firm.

Turnout for the event was healthy, with several dozen people convening in Denver at Coors Field. Here are some observations from the afternoon.

The Outsiders’ Views

One of the two main panels featured VCs from around the country who gave an outsider’s perspective on Colorado. The VCs were familiar with the state because they had made or tried to make investments in local companies.

[The second panel featured successful local CEOs talking about the benefits and challenges that come from building a company in Colorado. See this article for their thoughts.]

Overall, the panelists were bullish on Colorado and believe it is home to a growing number of talented entrepreneurs and interesting companies.

Adams Street Partners managing director Jeff Diehl has made investments in Colorado for at least a decade, most notably in MXLogic, which McAfee bought in 2009 for $140 million. Adams Street also invested in the $35 million round Denver-based Sympoz raised last year and has a stake in LogRhythm, which is in Boulder.

“A lot has actually changed since I first started coming to Colorado,” said Diehl, who works out of Chicago. “I’d say that back when I first got out here, the level of seasoning of founders and CEOs and executives was a lot lower than it is today.”

“Now you’re starting to see repeat entrepreneurs and CEOs who have actually scaled businesses into the tens of millions or maybe even hundreds of millions of dollars, which brings a different level of talent to a company,” he said.

“It used to be very difficult to recruit from Silicon Valley, but I think that’s changed dramatically as well,” Diehl added.

Recruiting from out of state doesn’t seem to be as important as it once was, given the amount of homegrown and imported talent, but one gap—product management—has been difficult to fill, Diehl said, although he believes it’s a problem everywhere but Silicon Valley.

Given the importance of the relationship between investor and entrepreneur, geography will always remain a challenge for out-of-state investors, said Mike Majors, managing partner of Siemens Venture Capital. The firm is based in Boston and is the corporate VC division of the German electronics company.

“Venture really is a local business,” Majors said. “For those of us who have to hop on a plane, it is challenging for us to maintain a rapport.”

While some companies have CEOs and leadership teams that are self-sufficient, others can be “needy” and require attention, in which case distance creates a problem, he said.

But long distance relationships aren’t too tough, apparently. Siemens Venture Capital has made four investments in Colorado, which is more than they have in any other area, according to Majors. The firm has backed LogRhythm, AventuraHQ, Zolo Technologies, and Tendril.

There’s something about the attitudes of Colorado entrepreneurs that works well with the people at Siemens, especially in comparison to Silicon Valley entrepreneurs, Majors said.

His view is that elite entrepreneurs in Colorado are more realistic and … Next Page »

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