Colorado policy makers and business leaders take great pride in the state’s innovation and cowboy entrepreneurial spirit, but do Colorado’s innovators receive the funding or venture capital necessary to take their companies and ideas to the next level?
Most business leaders and policy makers answer the question with a resounding “No!” It is their belief that the local entrepreneurial community would be stronger if Colorado innovators had greater access to local capital.
On the other hand, the National Federation of Independent Business (NFIB) research resoundingly states that most businesses are adequately funded and that their greatest need is to have more customers. Admittedly, the NFIB customer base includes small businesses other than those who seek VC funding, so their results may not be totally representative of the VC community.
Some venture capitalists claim that Colorado lacks the critical mass of companies in any one cluster to warrant the attention that companies and policy makers feel they deserve. It is their belief that quality innovation will attract sufficient funding, no matter the location.
Price Waterhouse Coopers (PWC) Moneytree conducts research regarding the number of VC deals and investments for the U.S. and the states. Since 1995:
• Colorado companies have received 1.6 to 4.2% of total U.S. investment.
• Colorado companies have received 2.2 to 3.4% of total U.S. deals.
• The average size of an investment per deal is similar for Colorado and the U.S.
• Colorado has approximately 2.0% of total U.S. private sector firms.
Based on the number of companies in Colorado, the state typically receives more than its share of VC funding. The question is, “Do Colorado companies receive their fair share of VC funding?”.
For additional slides about Colorado’s VC funding go to the PWC website.
©Copyright 2011 by CBER.