I’m not sure what made me queasier: too much of the cheese or my conversation with the weary lawyer pining for a return of deal flow that would allow him to send his kids to the college of their choice.
It was Monday evening and I was at the 2010 Excellence in Local Industry Awards, presented by the Regional Economic Development Corp. and Peak Venture Group and co-sponsored by yours truly at the Business Journal.
The mood in the room at Broadmoor West was generally positive but nothing like the excitement you’d see at a similar event in, say, the Bay Area, in the 1990s. The applause from the audience Monday was definitely modest compared to the hooting and hollering I’ve witnessed in different places and at different times.
Those days, in the view of some, are long gone. That’s not a sentiment I share but it’s hard to overcome some of the pessimism.
Mike Kazmierski, president and CEO of the EDC, tried his best to put a positive spin on it.
“While we are in difficult economic times, we should be very encouraged to see how many thriving companies and entrepreneurs we have in this region,” he said in a release announcing the evening’s winners. “These awards put the spotlight on individuals and primary employers who are leading the way through advanced technology and innovation.”
He’s right; there are definitely some interesting tech companies doing business here. You’ve read about many of them on our pages and on csbj.com. Mind Studios, Spectranetics, Chromatic Technologies, Neumann Systems Group all come to mind.
And that’s the problem: We all know the names of too many of these companies. They’re the same names we’ve heard before, which helps explain the lawyer’s sour disposition. There just aren’t enough startups starting up in our market; we have too few innovators, too few entrepreneurs, too few venture capitalists, and, as a consequence, too few deals.
Finding a venture capitalist nowadays is especially tough in not just these parts. The VC world is coming off two cruel years that saw its ranks thinned worldwide and investor dollars dry up.
Entering 2010, 10-year returns for the industry had dropped to 14 percent, from 36 percent in 2000, according to Cambridge Associates, an investment adviser. Initial public offerings this year are up nationally, but it’s going to be a long while before the two publicly traded companies based in the Springs are joined by any other.
Also, while this year started off better, VC investment slowed considerably in the third quarter, with most sectors seeing declines. Internet companies, for example, received 25 percent fewer dollars than in the second quarter; networking and equipment company investment was down 57 percent, while electronics and instrumentation was down 27 percent.
Yet despite these trends, UCCS might soon be getting into the VC game.
It is counting on its Thomas Duening, the El Pomar chair in business and entrepreneurship at UCCS, to put together a fund that will, among other things, invest in firms that agree to relocate to the Springs.
Pending legal review, his hope is to raise $3 million for the fund, which isn’t really a lot of money but considerably more than has been available given that we don’t have a single locally based fund operating here.
Better yet, Duening will be working with El Pomar Institute for Innovation and Commercialization, which helps local entrepreneurs take their ideas to market. The more that can be done to teach company founders how to professionally manage their business, the better.
It’s an approach that I think helps to keep those founders in their seats, which, in turn, helps keep them connected to the Springs. And that’s better than having some out-of-town venture fund seize control of a promising company and move it Silicon Valley or New York.
I think we’d all prefer to see an honest-to-goodness private VC fund establish itself here, rather than one birthed and sponsored by a public university. But, hey, it’s a start.
By the way, anyone interested in checking out what might be a promising startup should take a look at Eric Skinner’s Spectware.
Skinner, who has more than 20 years of experience in the crane and construction equipment industries, has developed software aimed at reducing crane-related accidents and, thanks in part to new government safety regulations, expects to make his first sale next spring.
He was at Monday’s event, too, a deal waiting to happen. You can find Skinner on LinkedIn. I’ll bet my new lawyer pal gets on the phone with him fast.
Allen Greenberg is the editor of the Colorado Springs Business Journal. He can be reached at firstname.lastname@example.org or 719-329-5206.