CEO Roundtable: NoCo startups adapt to life under COVID

A group of startup leaders and supporters said Northern Colorado’s startup ecosystem is seeing both opportunities and pitfalls in having to radically shift to the demands from the ongoing coronavirus pandemic. A group of nine executives gathered for a video chat discussion on the state of Northern Colorado’s startup scene Tuesday morning for BizWest’s bi-monthly CEO Roundtable.   Funding pressures Lisa Gumerman, CEO of cloud management platform Sunshower.io, said a fair number of friends and family have made investments in her company because it looks like a safer bet than the volatility of the stock market in recent months. But her company has had less luck trying to land funding from angel or seed investors, particularly within Colorado. “I do sort of feel like if we were to go raise a seed, it almost feels like you need to go through an accelerator, just to get that name recognition and PR, so people know you exist,” she said. LaunchNo.CO executive director Jana Sanchez said Northern Colorado in general has been overlooked, particularly when Boulder draws so much attention from venture capitalists and aspiring CEOs. While some additional steps have been taken to boost the region’s name recognition in the investing community, she called for a larger campaign to spread the word about Northern Colorado’s startup scene. “Those guys are in Boulder, and they don’t drive the 30 minutes north to figure out that we have … highly investable, profitable companies that need angel investors,” she said. For others, finding funding has been easier when looking outside of the state. Red Mountain Scientific Inc. CEO Mike Moses said the company has made connections with startup groups along the Front Range, but the majority of its funding so far has come from groups within the oil and gas industry in Texas. Red Mountain develops software to capture and analyze data from utility inspections, including photos taken from drones. “It’s really become very much a strategic approach of looking at companies and other investment groups that understand our industry domain,” he said. Innosphere chief operating officer Scott Sampl said a recent research project the accelerator did with startup database Pitchbook estimated that about 65% of investors and 80% of venture capital dollars in Colorado-based startups are from out of state. That research also showed that investors are looking for companies to be farther along in the growth stage before making investments, including more evidence of market traction and longevity. “The expectations at the seed level have gotten to be almost like the maturity that you would have expected a few years ago for a Series A,” he said. For other executives, the dramatic uncertainty caused by the pandemic has led to a somewhat different source of venture capital. Vortic Watch Co. CEO R.T. Custer said his company is still doing well and generating plenty of cash from sales. He said a lot of customers who buy his watches are in angel investing, and the discussions he’s had with them suggests they’re more willing […]
Source: BizWest