In late April, during the Colorado Springs Technology Incubator’s final days, its 22,000-square-foot commercial building at 3595 E. Fountain Blvd. was sold for $650,000 — $2 million less than what was paid for the property in 2007.
In late April, during the Colorado Springs Technology Incubator’s final days, its 22,000-square-foot commercial building at 3595 E. Fountain Blvd. was sold for $650,000 — $2 million less than what was paid for the property in 2007.

Editor’s note: This is the second in a series about the Colorado Springs entrepreneurial environment. 

The leaders and board of the Colorado Springs Technology Incubator were under a great deal of pressure earlier this year when they convened to determine the future of the 14-year-old nonprofit.

Ultimately, coaxed by financial pressures, they chose to do away with CSTI — scrapping its board, selling its building and entering a “rebranding process” that would lead to the creation of a new nonprofit with a new mission.

The newly embodied nonprofit was formed within weeks of CSTI’s disbanding — and the sale of its building — and was dubbed Rocky Mountain Innovation Partners, which took what it needed from its predecessor, left the rest behind and created confusion in the local business community.

“I’m not completely clear on how or why that transition happened,” said Lisa Tessarowicz, founder and owner of Epicentral Coworking in downtown Colorado Springs.

As CSTI transitions to RMIP, it leaves business people questioning its new role, its financial structure and the amount of community involvment it will allow.

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In late April, during the Colorado Springs Technology Incubator’s final days, its 22,000-square-foot commercial building at 3595 E. Fountain Blvd. was sold for $650,000 — $2 million less than what was paid for the property in 2007.
In late April, during the Colorado Springs Technology Incubator’s final days, its 22,000-square-foot commercial building at 3595 E. Fountain Blvd. was sold for $650,000 — $2 million less than what was paid for the property in 2007.

A new beginning

In April, on the eve of CSTI’s collapse, CEO Ric Denton and Operations Director Mary Fox oversaw a swift sale of the 22,000-square-foot building at 3595 E. Fountain Blvd. it had purchased in 2007 for $2.65 million using a $450,000 matching grant issued through the Colorado Economic Development Administration.

The sale to BF Legacy LLC closed April 24 at $650,000 — $2 million below its 2007 purchase price, according to El Paso County records — and RMIP launched within a week. It now occupies two offices on the Catalyst Campus, an enterprise started by Colorado Springs business owner Kevin O’Neil.

April 29 marked the official birth of the new organization, which was portrayed as the next step in a rebranding process commissioned by the now-defunct CSTI board of directors that included several prominent community leaders and educators.

“Equipped with an expanded vision to encourage and support entrepreneurship in Colorado, [the CSTI] board recently unanimously agreed to support a more robust mission — to introduce the Rocky Mountain Innovation Partners as a completely new nonprofit organization,” the organization wrote in a statement on launch day.

“RMIP’s mission is to support and educate clients in entrepreneurship, to create new businesses, accelerate company growth, provide commercialization opportunities, transfer innovative technologies, and expand opportunities for early stage investments.”

However, in contrast to CSTI’s former model as a technology incubator with services offered broadly to businesses of all kinds, RMIP has been labeled a business accelerator focusing on support for technology transfer partnerships and cyber sciences, Denton told the Business Journal in April, a move to complement Denton’s past working for defense contractors in California.

Long-ago accomplishments

The move toward more specialized services was predicated, at least in part, on CSTI’s August 2014 technology transfer agreement with the U.S. Air Force Academy to help the educational military installation market and commercialize the technologies it has developed and patented.

Although the incubator, and now RMIP, have worked with the Academy for nearly a year, the partnership has yet to yield any successful license agreements. No one from the Academy was available to speak about RMIP’s assistance.

The partnership between CSTI and the Academy was one of the few assets RMIP chose to carry over through its rebranding process. In addition to Denton and Fox, RMIP also inherited the incubator’s client metrics.

In 2012, Denton’s first full year as CEO of CSTI, the organization published a list of notable accomplishments as part of its Form 990 nonprofit filing with the Internal Revenue Service. The report stated that CSTI had “helped entrepreneurs secure $2 million of direct investment with subsequent investments of $10 million” to date through High Altitude Investors, an affiliated venture capital firm that Denton became involved with before joining the incubator.

According to that same 2012 report, HAI provided $2 million in capital investments to Grant Dental, a company founded by former incubator CEO and Chairman Duncan Stewart that received personal funding from Denton.

“That was sort of a backdoor situation, in the sense that I had already been working as an investor through High Altitude Investors,” Denton told the Business Journal last week. “Then I heard what Duncan was doing and said, ‘How can I get in on the ground floor with this?’ ”

Although sources say Denton claimed to have refused a salary from the organization, he received $36,667 in 2011 and $53,333 in 2012, according to official documents. Stewart received $31,500 in 2011, the year he stepped down as CEO and became board chairman.

The 2012 report also stated that the organization had served 27 client companies to date and helped to file 16 patents (nine granted).

When the organization reported to the IRS in 2013, the metrics remained unchanged.

Now, Fox said RMIP and CSTI have served 37 client companies, filed 30 patents (14 granted) and “helped secure $2 million of direct investment with subsequent investments of $20 million.”

But Denton said metrics don’t mean much in a challenging business climate, which he blames for CSTI’s failure.

“Forget all the metrics — you can make up metrics all day long — but at the end of the day, I would guarantee that no organization has seen a home-run, slam-dunk success resulting in something like an IPO or major acquisition,” he said.

“We have not had that kind of event, in my opinion, in the entire 10 years I’ve been here.”

As part of its rebranding marketing campaign, RMIP salvaged a few client testimonials from companies and partners that had worked with CSTI in the past.

There are currently three of the testimonials on RMIP’s website: Alan Davis, a now-retired UCCS business professor whose quote was recycled from CSTI’s 2012 report to the IRS, was unavailable for comment; Rob Vincent, the founder and CEO of the now-defunct  company ABA Revolution, could not be reached; and Eric Skinner, owner of successful Springs-based company Spectware, declined to comment.

Reasons for decline

The common understanding in the business community is that CSTI’s demise can be partially attributed to a flawed and outdated business model that made funding an uphill battle in a time when it was difficult for entrepreneurs to afford its consulting services.

“I think they were really trying to make it successful, but it was a tough model to sustain,” said UCCS College of Business Dean Venkat Reddy, who served on CSTI’s advisory board for more than five years before leaving in 2012.

“To make that model work, you need to have a good financial base … and I think that constrained them from doing what they wanted to do. They were bringing in startups without money. If the company was successful, they’d leave faster; if they weren’t successful, they wouldn’t have anything to invest back into the program.”

Profit margins shrank from $81,000 in 2009 to just $3,400 in 2013 (the last year financials are publicly available), according to expense reports attached to CSTI’s Form 990 filings with the IRS. While government grants grew and floated above $100,000 from 2011 to 2013, contributions declined from $85,845 in 2009 to $36,738 in 2013, when total revenue reached a five-year low of $227,000.

The city of Colorado Springs also allocated $50,000 for CSTI each year from 2008 to 2012, according to city budget documents. In 2013, that amount dropped to $25,000, and then dropped again to $10,000 in 2014.

“The funding for the then-incubator has always been challenging,” Denton said. “After the crash, everything reversed on us. [The building] went from being completely filled or close to it — at very nice commercial rates — to struggling along with about half occupancy. … In short, we went from surplus status to deficit status.”

Reddy, who said he exited the board to accommodate his growing responsibilities and workload at UCCS, said that there were multiple university representatives on the board during the time he served.

Few local representatives

Between 2009 and 2015, the board of directors was heavily populated with representatives from local colleges and universities, as well as organizations such as Colorado Springs Utilities, all of which maintained partnerships or funding relationships with the incubator. That’s not the case now.

Steve Berry, a spokesperson for Colorado Springs Utilities, said the organization “fully supported the transition,” which it saw as having a “greater impact on entrepreneurial growth and technology transfer for our community.”

Utilities supported RMIP in obtaining $250,000 in grant funding earlier this year from the Colorado Office of Economic Development and International Trade.

Berry said he does not know whether plans are in the works to give Utilities a seat on RMIP’s board.

Pikes Peak Community College also, at one point, filled a seat on the board of CSTI but has not yet established an official partnership with RMIP, according to spokesperson Allison Cortez.

“We don’t have a formal relationship with [RMIP] now,” Cortez said. “Ric Denton is on an advisory board for us, but he does that as a citizen — not representing [RMIP].”

The same goes for UCCS, according to spokesman Tom Hutton.

“To my knowledge, no one from the university has been involved in RMIP,” he said.

RMIP currently maintains a three-member board of directors composed of local businessmen Bill Miller, Walter Copan and Denton, according to the organization’s website.

Despite the smaller board and compact office space, Denton remains upbeat about RMIP’s future.

“I think the Catalyst Campus will be the center for innovation, in many ways, for years to come,” he said. “It’s still ramping up, but it’s an exciting place to be.”

For the first and third parts in the series, click here: 

Businesses seek ‘true north’

Local groups fill incubator needs.

22 COMMENTS

  1. When I told Ric Denton of significant challenges my company was facing, he rolled up his sleeves and jumped in on a pro bono basis. He has done an incredible job in coming up with a marketing strategy, in researching the relevant regulations that apply to my industry, in bringing other key players into the fray, and also in helping me with my contracts and accounting issues. Even though he is a minor investor in my projects, I never imagined that I would get weeks of his quality time addressing my challenges. I am honored to call Ric my friend and partner. I recommend RMIP highly. —-Justin D. Brown, CEO, Fusion Resources LLC

  2. This is difficult for me to write because, as both a subscriber and a editorial contributor, I hold the Business Journal in high esteem.

    There is so much wrong with what I am sure is a well-intended article. Having been materially present during many of the moments mentioned in the article (tech transfer, HAI, CSTI and the conversion to RMIP) I believe I am more that qualified to respond. In return I invite those behind this skewed article to be written to please describe your entrepreneurial and venture capital track record – especially the successes.

    YOUR POLL: That is the most stilted poll I have ever seen. The lunacy of the old question, “Do you still beat your wife?” pales in comparison. This article feels like a “hatchet job” at a time when we must pull together as a city and look for the good. “Think about things that are pure and lovely, and dwell on the fine, good things in others.” Philippians 8

    RMIP just got started/restarted with some real luminaries lending a shoulder. How about letting it get its new legs under it rather than being distracted by needless attacks? To those stirring this stinking pot, why don’t you simply go off and start your own gig?

    THE BUILDING: The fact that Ric Denton’s predecessor’s predecessor is the one who bought the building during economic “Boom times,” seems to have been missed by the writer. Such a real estate loss is understandable for that time. Having been physically present on Wall Street at that time, no one knows this more than me.

    “PAYMENTS:” The slanderous pubic claim, by one of the article’s interviewees that Denton took payment from entrepreneurs is an outright lie. When advised of the untruth of his statement this person refused to recant. He and his cohort are now trying to use an unwitting press drive a needlessly divisive “wedge” at a time when we should be applauding RMIP’s new alliance with state power The Rockies Fund. Regarding compensation, Denton has never claimed to always have worked for free. He accepted a modest stipend of roughly $30,000 but that ended three years ago. He has been working for free ever since.

    TECH TRANSFER: What Ric Denton, his team and the Air Force are creating is highly commendable. Like most “really good things” the Tech Transfer process was never envisioned as happening overnight. A primary challenge is how to reorient” the R&D program so that it creates products and services that are “commercial” but still primarily focused on satisfying the needs of the Air Force and defense department. This will take a while. That’s why “God created time so that everything wouldn’t happen at once!”

    RIC DENTON: When you get right down to it, this is really about Ric Denton. I spent a good part of the past two years supporting Denton’s herculean tech transfer efforts, among other initiatives. During that time I’ve witnessed his integrity, resourcefulness and willingness to listen. Let the new RMIP and its Rockies Venture Club ally blossom.

    Gregory Olinyk, founder and managing partner of Point-of-Reference, LLC (P-of-R), is a venture management expert with extensive international entrepreneurial experience providing analytic, functional and administrative skills in all aspects of corporate
    management and turnarounds.

  3. Your voting mechanism is not working. So how accurate can it be?

    This is difficult for me to write because, as both a subscriber and an editorial contributor, I hold the Business Journal in high esteem.

    There is so much wrong in this article. Having been materially present during many of the moments mentioned in the article (tech transfer, HAI, CSTI and the conversion to RMIP) I believe I am more that qualified to respond. In return I invite those who caused this stilted article to be written to please describe your entrepreneurial and venture capital track record – especially the successes – it is time for this shadow-land cabal to be held accountable for their own actions and performance.

    There are simply too many falsehoods and misunderstandings to address in a short set of comments. Here are just some of them:

    YOUR POLL: Other than it is not working at times, it is the most stilted poll I have ever seen. The lunacy of the old question, “Do you still beat your wife?” pales in comparison. This article feels like a “hatchet job” at a time when we must pull together
    as a city and look for the good. “Think about things that are pure and lovely, and dwell on the fine, good things in others.” Philippians 8

    RMIP just got started/restarted with some real luminaries lending a shoulder. How about letting it get new legs under it rather than being distracted by needless attacks? To those stirring this pot, why don’t you simply go off and start your own gig?

    THE BUILDING: The fact that Dr. Ric Denton’s predecessor’s predecessor is the one who bought the building during economic “Boom times,” seems to have been missed by the writer. Such a real estate loss is understandable in today’s market. Having been physically present on Wall Street in those times, no one knows this more than me. The building has always been heavily utilized by non-CSTI clients. A capital loss on the
    building has little to do with the past performance of the CSTI mission, which is not at all what is implied by the excessive focus on the building.

    “SALARY and HAI:” First, Denton correctly stated that he was taking no salary and had taken no salary for some time when he made such statements. He never asserted he had taken no salary from the beginning of his employment. Specifically, he took no
    salary at all in 2013. He took no salary in 2014 except for a one-time payment of $5,000 in December 2014. He has taken no salary for the first half 2015. It borders on slander for these shadow-land “sources” to misrepresent the situation by “discovering” that he took a very nominal salary in 2011 and 2012, which calls into question his statements.

    This is not the first time that slander has been used to attack Denton. A public claim, by one of the article’s shadow land “sources” that Denton took payment from entrepreneurs is an outright lie. When advised of the untruth of his statement this person refused to recant. He and his cohort are now trying to use an unwitting press to drive a divisive “wedge” at a time when we should be applauding RMIP’s new alliance with state power The Rockies Fund.

    HAI has been run to the highest of professional standards throughout Denton’s tenure: A suggestion of anything else, which is being put out by rumor and innuendo, represents outright slander. Such persons should and will be held accountable for their slander.

    Due to the seriousness of these matters, it is surprising that the reporter did not want to get a statement from Denton before going to press. This is unethical and unprofessional journalism.

    TECH TRANSFER: What Ric Denton, his team and the Air Force are creating is highly commendable. Like most “really good things” the Tech Transfer process was never envisioned as happening overnight. A primary challenge is how to “reorient” the R&D program so that it creates products and services that are “commercial” but still primarily focused on satisfying the needs of the Air Force and defense department.

    RIC DENTON: When you get right down to it, this is really about Ric Denton. I spent a good part of the past two years supporting CSTI’s herculean tech transfer efforts, among other initiatives. During that time I’ve witnessed his integrity, resourcefulness and willingness to listen. It is unfortunate that some members in the community are suggesting otherwise.

    • Gregory, our reader’s poll is based on your computer’s cookies. If you have already voted you cannot vote again in this poll. If you are having troubles casting your vote, please delete your cookies and try again. Thank you!

  4. Colorado Springs is a small community, and many of us know who the people are who have consistently worked to promote entrepreneurs, start-ups and small business. Ric Denton, Duncan Stewart, and Mary Fox are among these people, and I have a great deal of personal respect for each of them.

    Somehow, this article just made me sad.

    Facts matter. For example, High Altitude Investors is not a venture capital firm. Instead, it is a loose affiliation of successful, local business people who believe in building up business in the Springs and Colorado, and who are willing to put personal money behind that belief. They have banded together under the umbrella of HAI to help find good, investment-worthy companies. HAI is simply a group of individual angels investing in individual entrepreneurial companies.

    Perspective matters. Anyone who has built a business (or a non-profit) knows that it takes hard work, year after year, to succeed and make an impact on the local community. Only in a world that expects instant gratification would anyone think that there should already be licensing agreements from the relatively new arrangement with the AFA, that metrics formally reported in FY2012 and 2013 are “long-ago,” or that all of the organizational alliances from CSTI should be totally in place with the only 3-month-old RMIP.

    And tone matters. Colorado Springs is big enough to do many things, but not big enough to have the critical mass or deep enough pockets to do everything we want to do. Still, we have many people who work hard to build and promote the community, and also the inevitable few who find it easier to criticize than to deliver.

    Normally, CSBJ gives us good stories and exhibits a good understanding of the local business community. In this case, The Gazette and Innovation News simply did it better.

  5. I have had the privledge of knowing and working with Rick over the last decade, and am very confused by the tone and direction of this article. Rick has and continues to be a leader in the Colorado Springs entrepreneur community with his wisdom, leadership, relationships, and with his own capital. To question his motives, especially without directly talking with him, is not up to the standard of journalism we have come to expect and enjoy from the CSBJ.
    We know and expect you to do better.

  6. Thank you for your perspectives and for taking the time to comment. CSBJ reporter Cameron Moix did speak with Ric Denton for this story as well as the first in the series that ran last week. He spoke with Mr. Denton about the metrics reported by CSTI, the entrepreneurial climate in Colorado Springs and the reasons for RMIP’s change in name, location and mission. He is quoted in both stories.
    amy_gillentine
    Amy.Gillentine@csbj.com

  7. This article comes across as a massively unfair “exposé” at many different levels. I personally know Rick Denton and representatives in this article bear no relationship to the Rick Denton that I know and have worked closely with. My own personal interactions with Rick Denton has been with the highest integrity and I hold Rick in the highest esteem and integrity of business leaders that I know…- Douglas Hinkley, CEO, The CIERA Group LLC.

  8. Ric Denton didn’t get me a million dollars for my
    communications business. He didn’t bring me lot of clients. What Ric DID do
    through the SCORE program and later at CSTI was to mentor me in some sound
    fundamentals of business and marketing so I could make my own way as an
    entrepreneur for 21 years. Hey there, mister hot shot reporter, sounds like the
    incubators up north need your insight and gravitas. Why not join them and make
    room for someone at the Business Journal who can portray folks as they really
    are: competent, committed and caring? It’s not all about big names and big
    money, you know.

  9. Count me as another Colorado business person who has worked with Ric Denton on several occasions and is therefore perplexed by this article. I have always respected and admired Ric and know him to be an accomplished professional who has solid integrity and cares a great deal about entrepreneurs and the community. The team at RMIP (including Mary, Bill and Walt) is on the right track and will remain so with community support and accurate media representation. I believe that a balanced follow-up article is in order.

  10. Ugh, this article just doesn’t represent what I saw happen. Sorry guys, poorly done reporting. Get your bias out of the way. I’ve served with Ric on boards, advisory groups and worked with HAI and CSTI back when Duncan was stil CEO and this tone could never be used when referring to these men and women. What is the purpose of an article blasting one of the few long-term established entrepreneurial support organizations in town? I worked my tail off to bring Colorado Springs from obscurity to 10th best city in America to start a business and orgs like the Incubator supported our efforts. So what if they saw fit to change focus or if some things weren’t slam dunks? At least they worked on something every elected leader and hired analyst for Colorado Springs has been saying needs work.

    “It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat.”

    — Theodore Roosevelt

  11. I applaud Ric Denton and Mary Fox for hanging in there and continuing to press forward to help entrepreneurs grow and thrive in our community under the new RMIP. When I heard that RMIP was moving to the Catalyst campus I thought it made perfect sense for them to leverage the significant investment made by the O’neil group and be a part of the collaborative campus of innovation. Our community needs more entrepreneurs and they need your support. I work with many people in this community that invest their time and money to help make this city a thriving, diverse and sustainable place to work, play and raise a family. We need to get behind them by talking about the good things they are doing and encouraging others to be part of it. As a entrepreneur that started my business in Colorado Springs I am proud to say that our business is headquartered in Colorado Springs. Let’s work to stay positive about the good things happening and help respected members of the community like Ric Denton and Mary Fox by supporting them. Let’s change the dialogue in this city to be supportive. The business community and our elected officials are working together collaboratively across the city and the momentum is growing rapidly. We need to lean in and change the dialogue together.

  12. This story has all the evidence of being a hatchet job with information supplied by competitors. Many new ‘start-up assistance groups’ seem to be starting up with nothing but a Facebook page who have achieved nothing and do not have the record that Ric Denton has.

  13. Article does such an injustice to the entrepreneurial community and the history of job creators in Colorado springs. Leaders such as Ric Denton have made such a difference in so many ways, taking coaching and mentoring to a very high level. Ric and Mary spent years laying the foundations for building our community for years to come. Disappointed in the article, Moix and the CSBJ for its lack of insight, objectivity and factual presentation.

  14. I have know Rick Denton and Mary Fox for over 7 years. Rick and I have counseled together for SCORE and I have had the opportunity to see first hand Rick’s professionalism and passion to assist and guide our clients. I read Mr. Moix’s article in the the CSBJ and was angered by the distortions and inaccuracies expressed by the author. I might suggest that Mr. Cameron Moix would be better suited for a position at Rolling Stone and partnering with Sabrina Rubin Erdely.

  15. As a founding Owner and CEO of Rim Technologies, a business directly positively impacted by CSTI, I’d like to personally thank Rick Denton and Mary Fox for all the free educational events I attended at the CSTI, specifically the business IT series co-hosted by the SBDC. From this series of meetings I was able to make key decisions about how to stand up my company’s email, internal electronic information architecture, and virtual development environment while managing complex export regulations for employees travelling overseas on a very lean budget. I estimate Rim Technologies saved $227,000 in infrastructre costs by attending and acting on the recommendations from technology experts at these free forums. I appreciated the opportunity to network with other business owners at no cost many of whom have now become close professional contacts. When your aptitude tests recommend your best career is “inventor” you’ll be hard pressed to find a job that fits. The puzzle of business has continued to be fun to solve for me. CSTI was a piece of the puzzle for making my small business work and succeed all while helping me connect to people who “get” what I’m trying to build. As an Air Force Academy graduate, I’m excited to support the new partnership the Air Force Academy and the RMIP are forging. It’s easy to get caught up in the buzz about small business and hope someday you’ll be a business owner. But if you want to get real, get down to RMIP at Catalyst Campus, the PTAC or SBDC, write out your plan and talk to some entrepreneurs who can help. I’m proud to be part of the ecosystem of entrepreneurs starting, growing and thriving in Colorado Springs because of the great efforts and investments of visionary community business leaders like Kevin O’Neil, and Ric Denton.

  16. As I read through this article, I felt a deep concern that it could have been presented to the business community in Colorado Springs with a straight face by the Colorado Springs Business Journal. I will not take the time to reiterate the untrue or skewed “facts” in the article that were exposed by previous commentors but rather simply state my own personal experiences with the CSTI folks mentioned.
    As a stakeholder in a small Colorado Springs start-up for the last 4 1/2 years, I have been at numerous events and meetings in which Mary, Ric, and Bill have shown the utmost professionalism, concern, and care for countless small businesses including mine. It is tough down here in the trenches and their advice and guidance was, and will continue to be, invaluable to me. I hold them in the highest esteem and commend them for their efforts to mentor, foster, encourage, and help get funding for our local fledgling businesses.
    Mr. Moix and The Colorado Springs Business Journal … Lets see what we can accomplish if we all pull on the same side of the rope!
    William E. Pounds “Doc”, Vice President of Engineering, ConcealFab Corporation

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