Filling the void

FORT COLLINS — A Japanese-based venture-capital firm has come to the rescue of some Northern Colorado entrepreneurs. EnConnect Holdings, doing business as FVC Americas, moved quickly to lease the coworking space being vacated by Galvanize at 242 Linden St. in Fort Collins, with the promise to maintain the status quo for existing tenants.

Denichiro Otsuga, president of FVC Americas, said this is the first venture for the firm outside of Japan. “When (we) decided to go into the U.S. market, we knew that getting access to a place where people could gather was very important, and Galvanize already announced that they would be leaving the Fort Collins market, so we took the opportunity to take over the building,” he said.

That announcement by Galvanize came in late November. The company operates several campuses across Colorado, where it provides both coworking space and Web-development classes. Galvanize opened its Fort Collins facility in 2015, but made the decision to close a little more than a year later. In an earlier statement to BizWest, Galvanize CEO Jim Deters said the Fort Collins campus was “not economically sustainable” and would therefore be shut down by the end of 2016. The company also offered to help tenants move to its Boulder facility.

Though the announcement caused some initial uncertainty among Fort Collins’ coworking community, it didn’t take long for the situation to stabilize. Sam Houghteling, an economic analyst with the city, put it this way: “Luckily, we live in a place that tends to look at challenges through the lens of opportunity, and right after Galvanize did make the decision to pull out of the Linden Street location, there was kind of a collective will to keep the space operational.”

Several parties showed an early interest in maintaining the property, owned by Blue Ocean Real Estate Management, as a coworking facility. Within a month, FVCA had finalized details of a lease agreement to take over from Galvanize on Jan. 1. The facility will now be called “Mesh Fort Collins.”

“It’s a place for entrepreneurs and investors in the ecosystem to gather and work,” Otsuga said. “There are people who have money, and there are people who have ideas, but they aren’t necessarily woven together so by creating ‘Mesh,’ we can bring all those people together in the community.”

Future Venture Capital, the parent company of FVC Americas, has been assisting what it sees as underserved areas of Japan for nearly two decades.

“They have been creating a venture-capital fund in places outside of major metro areas like Tokyo,” Otsuga explained. “The reason for that is the founder of the company had a belief that people in rural areas are just as innovative and smart and hard-working, but they just don’t have access to capital.” Now the company is hoping to repeat its successful model not only in the United States but also worldwide, with Fort Collins as the headquarters for its American operations.

It’s a move the city sees as critical to maintaining momentum for a burgeoning entrepreneurial scene, Houghteling said. “We’re very pleased that 242 Linden St. will continue to operate as a coworking tech hub for entrepreneurs and small businesses,” he said. “There was a great community forum there under Galvanize and a palpable positive energy among the startups, and I think that Mesh Fort Collins will only enable our community to retain that momentum.”

While the timing may have been advantageous, several other factors played into the decision. Otsuga believes that, as a growing community, Fort Collins offers more opportunities for a venture-capital group than a more-established startup city such as nearby Boulder. And recent word-of-mouth helped seal the deal.

“The Smithsonian Institute … did some research, and they looked at historical areas of innovation like Silicon Valley, and they looked forward to what could be the next city of innovation,” Otsuga said. “They actually arrived at Fort Collins as a city that has all the potential key pieces that could become the next Silicon Valley.”

Houghteling echoed those sentiments. “Over the last few years, Fort Collins has been recognized by a number of different associations and organizations, including the Kaufman Foundation in 2014 highlighting (the city) for having a critical mass of startups in the tech space, and very recent articles like tech.com listing the Top 10 communities for entrepreneurs around the country, and three of the 10 were Fort Collins, Boulder and Denver.”

Still, Otsuga said Mesh Fort Collins doesn’t plan to limit itself to the tech sector. “Galvanize was a lot more focused on tech, while we’re more generalist, with a much wider interest in other areas,” he offered.

Houghteling sees it as a perfect fit. “Fort Collins has historic industry-cluster strength in agricultural technology, beer brewing, technology related to hardware and software, strength in our local food ecosystem and our creative sector,” he said. “We really have a very diversified startup ecosystem that I think we are doing our part to support, but it’s a business that requires support from multiple entities and startups … and Mesh Fort Collins joins a number of established organizations in providing that support.”

In keeping with its business model, FVC Americas is looking at expanding into even smaller communities across Colorado and bring them together in another Mesh network.

“We’re really about community building,” Otsuga said. “We do investment, but people should really think of the ‘VC’ part (of our company name) not so much as ‘venture capital’ but more ‘value creation’ in the community and hopefully people see that we’re a very different type of group focused on building communities. That’s the part that I really want to emphasize.”

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