For nearly 17 years, there’s been only a trickle of venture capital in Colorado Springs. Despite efforts by groups like High Altitude Investors, advice from the Rockies Venture Club in Denver and help from individual investors like Bill Miller — the city’s businesses haven’t realized much in the way of outside venture investment.
That changed this week. Cherwell Software received a $50 million investment from the Next Generation Technology Fund of the New York-based private equity firm Kohlberg Kravis Roberts & Co. The company also has received investment capital from Insight Venture Partners.
While Colorado ranks sixth in the nation for venture capital, the Springs seldom sees any of that money. According to PricewaterhouseCoopers, the state’s companies raised $138.6 million in the third quarter of 2016, up from $91 million for the same time in 2015. It’s a far cry from the $388 million California companies received in the third quarter of 2016, but it is positive news for the state’s startup companies and tech firms.
It’s a sign that Colorado is being taken more seriously by venture capitalists around the globe — and the latest news could be a sign that the Springs is finally on their radar as a place for investment dollars.
Colorado Springs and El Paso County are home to a number of startups and technology firms, but few receive the kind of attention that Denver and Boulder companies get from venture capitalists. That in turn creates a kind of catch-22. The city’s tech sector isn’t as robust as those in other parts of the state — and that’s because it doesn’t have venture capital. But until investment firms get a strong sense that the city’s technology companies are on solid ground, they won’t invest.
A year ago, Miller told the CSBJ that the local business climate has “never developed critical mass like some places. There’s just not the vibrancy of those cities.
“Not very many people in Colorado Springs made their money in the technology business. They made it elsewhere. It’s not like in Silicon Valley or Boulder or Austin; they have the right critical mass of tech companies that create investments in other tech companies.”
But as more Millennials opt to create their own firms, perhaps that equation is changing. Think about fledgling tech companies like Titan Robotics, which entrepreneur Clay Guillory started in his garage. The company’s now in an industrial warehouse and has attracted Silicon Valley’s attention. But Guillory is determined to stay in Colorado Springs. And that determination — along with others also building tech firms — could bring more investment to the Springs.
Already, the city and county are reaping benefits from cybersecurity firms, software companies and technology businesses. El Paso County and Colorado Springs have seen wages grow at the fastest rate in 10 years as high-tech jobs bring higher salaries. And firms across the nation are noticing. Just last week, the Colorado Springs Chamber of Commerce & EDC announced a software firm was relocating from Chicago to the Springs, bringing with it the potential for 90 new high-tech jobs.
Colorado Springs is finally at a real tipping point — and that includes more than just a robust downtown or vibrant housing industry, although both are important. It also means the rest of the nation is paying attention to the city’s reputation as a cybersecurity hub and as a low-cost place to live, work and play.
It’s about time that the Springs gets a share of the millions in investment pouring into Colorado.