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A new co-working space at the Colorado Springs Technology Incubator aims to get the entrepreneurial party started and help proprietors find their groove.
The Startup Factory looks like a typical office with desks, a white board, high-speed Internet and a small refrigerator stocked with caffeinated beverages.
But backers are hoping the factory becomes the most-talked-about entrepreneurial scene in the city, where ideas turn into business plans and plans turn into viable startups.
“This kind of idea is all over Silicon Valley as a precursor to the incubator, where people can come and hang out and informally get together and realize synergies of interacting with us and interacting with each other,” said Ric Denton, Colorado Springs Technology Incubator CEO.
Denton, who has started companies from scratch, knows that half the battle in startups is getting good advice. He cites the research: Startups fail because of bad personnel decisions about equity, partners, hires and investors.
“There is a lot of poor advice out there, which can seriously damage or kill a new company,” said Robert Vincent, founder and CEO of ABA Revolution, a startup specializing in web-based autism behavioral therapy. “Entrepreneurs must be very careful about who they invite on their journey and what advice they take.”
Denton calls the Startup Factory a safe haven. And entrepreneurs who hang out with those who’ve been around the block and back, like Alan Davis, a successful entrepreneur and business strategist.
“At the incubator, entrepreneurs are surrounded by like-minded individuals and plenty of professionals who have been ‘there’ already to help guide them through the tough times and help them integrate all aspects of their business,” Davis said.
There has always been entrepreneurial activity in the Springs. But lately there’s a new vibe, said Bill Miller, managing partner of PV Ventures, an investment firm that has a $3.2 million fund for startups.
Entrepreneurs are out pitching their ideas; others are meeting over coffee and drinks with seasoned startup veterans; and still others are sitting down with business savvy professionals to talk details about finances from how to fund a startup to how much equity goes to investors.
“There is more good activity now,” Miller said. “There is a little more in the way of activity where people beginning to start companies are finding their way to financing — that is being facilitated partly by the activity around the incubator.”
Nolan Bushnell, founder of Atari and Chuck E. Cheese Pizza franchise and king of the startups, is often quoted by entrepreneurs on his version of a Thomas Edison line: “doing a successful startup is 1 percent inspiration and 99 percent perspiration.”
“We’re here to help on how to actually do the perspiration piece,” Denton said.
The Colorado Springs Technology Incubator is a nonprofit with three employees and about 30 volunteer mentors who provide the incubator’s eight clients with services including product development, funding, operational guidance and go-to-market strategies.
“Our ideal client is somebody who has a big idea for a growth business and a business that might hypothetically become a primary employer,” Denton said. “Simple way of saying the sales footprint is nationwide.”
Those mentors likely will frequent the factory, which is available to startups for free. They will help budding entrepreneurs, who might be engineers or scientists, speak the business lingo and learn the moves that will keep them safe when investors start calling.
“We believe that as an organization, with our mentors, we are uniquely able to provide the kind of mentoring advisory services, financial modeling — I mean really serious financial modeling — that is needed for a company to get keyed up to get equity financing,” Denton said.
Bring on the money
There is talk in certain circles that Colorado Springs is super-conservative when it comes to investing in startups, something that might chase entrepreneurs out of the Springs, Denton said.
No doubt, it’s been tough to shake down investors and Denton and others have been working on getting locals to take a risk and put their money into startups. Venture capital money — anything above $2 million — has eluded Springs’ entrepreneurs. But there is angel money, and good ideas will get funded, Denton said. He’s been on a push to double — even quadruple — the membership of the town’s only angel investment group, High Altitude Investors, to have the financial clout that makes a difference.
“The more vibrancy we can get in the risk capital domain, the better job we will do at capturing people out of the university where we can fund some of those ideas,” Denton said.
Miller agrees. He had taken a hiatus from investing, he said. Then about a year ago he started seeing a change in the Springs — entrepreneurs seemed to be more savvy in their business valuations.
“They became more realistic,” Miller said.
That drew him back as an angel investor. This year, he’s invested in five startups — from a software company developing touch-screen technology for auto dashboards to the ultimate social networking and event planning site.
He sees the Startup Factory as the place where entrepreneurs can train for the dance they will do with investors.
“The factory will get entrepreneurs an opportunity to plug into the scene,” he said.