By Joseph Haecker
Aug 16, 2023
Is the Colorado Startup Ecosystem a kegger, celebrating the end of Covid? Or a college friend, headed to rehab?
Denver, CO – In June of 2021, when I held an event at The Commons on Champa (closed at the time to the public), called “Restarting, the Startup Community”, the goal was to talk about how we would relaunch in-person startup events in Colorado.
We didn’t have a huge crowd. But those that did attend are still some of the most common names, hosting startup events in the Denver-metro area.
At the time, we concluded that:
1. When The Commons on Champa re-opens, Commons would fix most of the problems
2. We agreed that ALL startup ecosystems have a “Fragmentation” and “Discoverability” problem.
More than a year later, and we are in full swing with events.
Denver Startup Week is moving away from it’s 2021 hybrid model, and going completely “in-person” again. 1-Million Cups took two months off at the beginning of summer. And in August, Founder Institute has already had a couple of its first in-person events. You can search Meetup and find 3-5 startup events on any given week.
So, everything must be back to, or headed back to, “normal”.
But is it?
Some of the most successful events include “Free Beer” and networking. If it’s not free beer and networking, it’s a pitch event and networking (and beer)(or free coffee).
Which is great!
I’m glad we are starting to get out and attend events again.
But have you been to an event where you learned how to distribute equity? Or learned the difference between a sole proprietor, LLC, C Corp, or S Corp? Or sat in on a panel, learning from Venture Capital Groups what they are looking for and how to engage Angels or VC’s?
They are happening…
They happen on-line. Or in an accelerator pitch week. Or if you get accepted into an incubator or accelerator.
But, did you know that only 1-3% of startups even make it into an accelerator (Forbes - https://www.forbes.com/sites/alejandrocremades/2019/01/10/how-startup-accelerators-work/?sh=5e26395a44cd)?
So, if education in the startup space isn’t happening until the incubator or accelerator level, what happens to the other 97-99% of startups?
This brings me back to the sub-title of this article.
“Is the Colorado Startup Ecosystem a kegger, celebrating the end of Covid? Or a college friend, headed to rehab?”
Are we simply easing out of the Covid hangover, a little groggy, and needing a little “hair of the dog”, before getting back to business?
Or are we starting to form a bad habit?
I recently posted into a Facebook Group called “Entrepreneur Club”, advertising that I would be hosting a “Pitch Decks 101” workshop on Zoom. One of the group admins posted in the comments section, “Can you explain what a Pitch Deck is? Most people may not know what this term means”
Go ahead. You can re-read that.
The “Admin” for the group, didn’t think that “most people” in a group called, “Entrepreneurs Club” would know what the term “Pitch Deck” means…
Without saying the Denver-based Angel groups name, I had an “Angel” tell me that the reason they aren’t involved with teaching startups how to do things like build a pitch deck, is because “they can learn how on YouTube…”
Now, I was recently in a meeting with Founders Institute, and really lavished them with praise for focusing on education. And it’s true. Founder Institute offers a lot of free courses, online, and hopefully soon, in-person education.
But you DO need to be a part of their accelerator to get to the good stuff.
And, I’ll remind you,
“only 1-3% of startups even make it into an accelerator” (Forbes - https://www.forbes.com/sites/alejandrocremades/2019/01/10/how-startup-accelerators-work/?sh=5e26395a44cd)
I was in a Founder Brunch, organized by the organizers of Denver Fuckup Nights. This 3-part, monthly series offered a free brunch, topics and ultimately a VC panel discussion.
Which was great!
And it was a step in the direction of education.
Now, I was in the first “cohort”. In week one, we had a packed house. By week three, the numbers had tapered off.
The event was organized and executed very well. That wasn’t the problem.
So, what’s the problem?
Is the Denver startup ecosystem still waking up, and stumbling to the bar, looking for the “hair of the dog”?
Or are we developing a drinking problem and not getting back to school, after Spring Break?
Should event organizers focus on education, and stop enabling the startup ecosystem’s drinking problem?
Is it even an event organizers duty to god, country and ecosystem to educate and sober up the community?
To be fair, no event organizer wants a "no-show" event.
So, offering free beer and little substance, but getting good turnout, feels good.
So, if it’s not the event organizer's job. Who’s job is it?
I guess you would follow the money?
Who stands to benefit from startups that are well-formed, understand business concepts and principals, have been vetted at lower levels, and have the substance to accept and be responsible with investment?
Well, I’m just going to say it.
Investors in Colorado have the most to gain from making sure that startups, founders and entrepreneurs are gaining their education throughout the ecosystem, that way when a business ends up at their doorstep, they are ready.
In my humble opinion, the investors need to be the “parent in the room”.
The Colorado startup ecosystem needs that call from mom and dad, letting us know that if we don’t get our act together, they are gonna cutoff our funding.
Here’s the problem with that…
I both volunteered at Denver’s 1-Million Cups, and have attended now since they re-opened for in-person events in Summer of 2021. And I can count on one-hand the number of times an Angel or a VC (Scratch that…I’ve never seen a VC at 1MC), has attended a 1-Million Cups event.
In fact, outside of Denver Startup Week 2021, a single Founder’s Brunch, a couple of the panels at Boulder Startup Week, and no other event…have I ever seen an Angel or VC at a startup event.
Why is this important?
Well to be fair, if Angels and VC's don't show up to these lower level (entry point) events, then there are no adults in the room.
We are an ecosystem left to our own vices.
So, how do we fix it?
Plain and simple.
We need the people who stand to benefit from a healthy startup ecosystem, to be present.
We need to see Angels, VC’s, Private Equity Groups, and independent investors showing up to events, networking, connecting with event organizers, and helping to fund education (not just beer money) at the lower levels, or “entry points”.
If investors got involved at the lower levels, the ecosystem would produce better deals, as they filtered upstream.
When a startup got to the level of an accelerator or incubator, they would be prepared and ready.
We would see startups bypass incubators and accelerators, and go directly to Angel, VC and Private Capital.
The ecosystem needs an adult in the room.
Denver Startup Week is not the solution.
It should be the Superbowl. It should be the goal at the end of the year.
Accelerators and incubators is NOT where and how the ecosystem should be learning. At 1-3%, they simply do not address even a slim minority.
We need investors and investor groups to pay attention and get involved.
Or... As an ecosystem, we need to learn why investors are not already attracted to the events and watering holes entrepreneurs are currently gathering at.
And we need to fix it.
ABOUT THE AUTHOR
Joseph Haecker is a serial entrepreneur, with over 23 life-time registered businesses, $4.5 million in raised capital, 3 exits, and advisor to dozens of startups and small businesses. Joseph leans towards education and a more planned infrastructure for small business, tech and startup roadmap. In a world where our local, national and international economies depend on entrepreneurship, Joseph believes that we should be providing more accessible and free education to entrepreneurs.
If you have any questions or comments regarding this Opinion Piece, please feel free to email joseph at:
Excellent article and great points about the Angels and VCs putting money where their mouth is and show up sooner in the process. - Jennie
Joe, great op-ed. You are cutting straight to the bone.