On the dimly lit stage at Johnny’s Navajo Hogan bar and restaurant, Al Ortiz stepped up to the mic and cleared his throat. He wasn’t there to tell jokes or sing karaoke.
It was “Pitch Night” and he had five minutes to convince the audience that his idea about an auto parts inventory web site could be the next big thing.
Pitch Night is the local entrepreneurs’ American Idol, where hopefuls go to be discovered and propelled into stardom. It’s the Peak Venture Group’s latest effort to bring fresh blood, new ideas and innovation to the entrepreneurial stage. Over its 11 years, the nonprofit group has worked to create an entrepreneurial community and now feels it has the perfect model in place to guide an entrepreneur from idea to market.
But, for all its work in finding mentors and resources for hundreds of budding and middle market entrepreneurs, the group is still lacking in one important area: investors.
And, that could leave entrepreneurs standing alone up on that stage.
“We’ve been trying to raise venture capital in this community for a long time,” said Loren Lancaster, PVG board member and chair of the group’s foundation. “We’ve had some fits and starts but never anything solid.”
But, in Colorado Springs there is no shortage of interest in local entrepreneurs. Nearly 200 people jammed into Bemis Hall on the Colorado College campus recently to hear entrepreneurial rock star Brad Feld, an early-stage investor and co-founder of the Foundry Group in Boulder which has pumped hundreds of millions into information technology start-ups across the country. The standing-room only crowd proves there is desire for entrepreneurialism in Colorado Springs, Lancaster said.
But, when Feld asked the group how many had invested more than $25,000 two times in the last year, only two hands went up. That’s not enough to create the sort of buzz that it takes to become a vibrant entrepreneurial community, he said.
“If you don’t make more than two investments a year of $25,000, you are pretending to be an angel investor,” Feld said to the group. His advice to would-be angel investors is high velocity investing, like setting out multiple bingo cards and hoping one or two will hit.
“It doesn’t mean you invest in everything with a pulse,” Feld said. “But, when you see something you like, invest quickly.”
Colorado Springs has the entrepreneurial talent, said Tom Neppl, Springs Fabrication CEO who was at the PVG meeting and heard Feld’s advice. It’s the culture that’s lacking.
“I think the money is here,” he said. “I don’t think the people who have the money are used to doing venture capital.”
It’s why PVG has spent the last decade building a program that gives aspiring entrepreneurs support by way of mentors, advice and planning, said Jim Wittenburg, who helped launch PVG. He believes that the group’s efforts to build a system that supports entrepreneurs will convince venture capitalists and angel investors to take more risks on Colorado Springs entrepreneurs.
“To get where we want to go we are probably less than 50 percent there,” Wittenburg said. “We are not at critical mass yet, but we do have a strong base of people who want to make this thing happen . . . it takes that right driving force to hold it together.”
The group needs its Feld, or rock-star equivalent, to energize the investors in Colorado Springs the way that Foundry Group has led the charge in Boulder, Lancaster said.
“We could talk all day about bringing in someone from California or Denver,” Lancaster said. “But, we have enough money here in town. We need somebody, a visionary to pull that piece together.”
Creating an entrepreneurial culture just might start from the bottom up, said Etienne Hardre, PVG board member and Pitch Night director. First get the ideas and then the money will flow, he said.
Pitch Night is modeled after a similar monthly event in Boulder.
Those making a pitch might get advice on how to improve their idea. They might be told not to waste their time. Or, they might make a friend, Hardre said. As a CPA working with start-ups, he knows there are investments in Colorado Springs being made all the time — and most of those are because of personal relationships, he said.
“There is absolutely tons of money available,” Hardre said. “It’s amazing how critical relationships are — that is why (Pitch Night) is important.”
PVG’s new president JoAnn Schmitz said the organization has a renewed commitment to ground-floor ideas and innovation. After Pitch Night, an entrepreneur could get connected to a mentor, massage their business plan and have an opportunity to make a five-minute presentation at a PVG meeting, where about 10 to 15 percent of the membership are qualified investors.
“We will use our connections to get that company in front of someone who can make it happen,” she said.
Ortiz, with his auto parts inventory site, is counting on that. In his five-minute pitch, he described PartsSniffer.com, a website that keeps inventory of all local auto parts geared toward auto mechanics and auto shop managers. Auto parts are a $110 billion industry, he said. But, it has a fragmented supply chain and mechanics spend too much time calling around in search of parts.
“It’s a simple tool to use — you look, you find, you buy locally,” Oritz said while standing on the stage at a recent Pitch Night.
Then, the five-minute buzzer sounded and the next hopeful entrepreneur stepped up to the mic.