VC execs weigh in on ‘State of Venture in Colorado’

BOULDER — When it comes to venture capital, there is a pendulum that swings between too much money for a market and not enough. Right now, the Boulder Valley is suffering from a dearth of venture capital, panelists said at Monday’s Boulder Startup Week panel, “The State of Venture in Colorado.”

“When it comes to fundraising, we’re very much talking about an underserved market,” said Kirk Holland, managing director of Access Venture Partners. “When I got here [in 2002], there were about 25 to 30 firms with $2 billion under management. That was too much money for the market, and the returns weren’t great. But the pendulum always swings. Now it’s swung too far, and we could use more Series A funds.”

Groups such as Access Venture Partners and the Rockies Venture Club, run by panelist Peter Adams, are trying to remedy that by connecting angel investors and VCs with startups.

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Of course, it’s not an issue that’s limited to the Front Range.

Panelist Marc Nager, managing director at Telluride Venture Accelerator, said that much of the Western Slope gets passed over for the Front Range.

“There is way more than just the Front Range,” he said. “You can do this in more-rural economies and get access to amazing — and different — resources. The important thing is to make sure you really want to be an entrepreneur. It’s the hardest thing you’re going to do. Be careful to not get caught up in the romanticism of startups.”

Startups should also be cautious about the money they take, Adams said. Corporate venture capital is increasingly becoming a trend, with large corporations investing in startups. But it can be a double-edged sword, Adams said. Although startups can get connections and validation in the market, they can also be overvalued by the corporation, which can result in the next round of funding decreasing and the company looking poorly.

Although the Front Range might not have as much capital as it should given the amount of startups in the area, the panelists said they were confident that the talent and quality of life would attract venture capitalists to the area.

“I think they’re on their way,” Adams said. “I think they’ll come. They want to be a big fish in a little pond making strategic deals. When large VCs in Japan send someone to Silicon Valley, they send them for three years. That’s just enough time to make relationships and leave. You can make relationships here really fast. It’s a smart and open community.”