10 Things to Know About BEN, Blackstone, and Colorado’s Gazelles
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which is a three-month boot camp for some of the world’s more promising startups. It was founded in Boulder and ranks as one of the most successful accelerator programs.
At the grassroots level, there are organizations like New Tech Colorado, which hosts monthly meetings for aspiring entrepreneurs and gives fledgling companies the chance to make their first public pitches.
With so much going on, it might seem like every niche has been filled. But that’s not the case, Weiser said.
“There’s increasing collaboration at the startup layer, but not necessarily at the scale up layer, and across sectors, there might not even be much collaboration at all,” Weiser said. “I believe there’s a real opportunity to give both specific companies support as well as more broadly to build interconnected ecosystems, which will have positive impacts as well.”
BEN is focusing its efforts on five industries: technology and broadband; natural foods; energy; biotech and health; and aerospace. Locally, those industries are considered to be some of Colorado’s strongest, but while they’re heavily concentrated in Colorado’s Front Range, there isn’t much intersection between them.
The network wants to change that to benefit companies that have potential for rapid growth, which Holston likens to “gazelles.” He believes lessons learned in one industry can transfer to another.
“The theory of the case is that we have these disaggregated, somewhat disconnected silos of great expertise and experience that if we can connect in a functional fashion, particularly around companies that can be ‘gazelles,’ we’ll increase the probability that more of those companies become gazelles,” Holston said.
4) Focusing on scaling up, not starting up
BEN will be highly selective about the companies it helps.
“What will be unique about us is the type of companies we’re helping. They’re not going to be early stage startups,” Holston said.
Instead, BEN is looking for companies that have grown past the startup stage and are looking to scale up.
While companies will have to show both promise and results, they are likely to be early enough in their lifespans that they have not settled on a long-term strategy. Mentors from BEN could help them set a strategy.
“You’ve got to be a real company with real revenue and employees, but whose level of ambition and outcomes is yet to be determined,” Weiser said.
BEN Colorado is taking this approach for several reasons. First, startups and entrepreneurs are being well served by organizations like New Tech Colorado and events like the startup weeks in Denver, Boulder, and Fort Collins, Holston said.
“There are all kinds of things helping earlier stage companies at the moment. You can argue we need more of that, but there’s a lot of really great stuff going on. I think everyone’s agreed there’s really not much attention focused on this particular issue, which is let’s get some scale-up successes,” Holston said.
Colorado already has demonstrated it is fertile territory for startups, but its track record for creating companies capable of going public or remaining independent over the long run is not as strong, Holston said.
Indeed, many of Colorado’s most successful or promising tech companies get acquired. In April, for instance, Twitter (NYSE: TWTR) purchased Boulder-based Gnip for an undisclosed price. Gnip collects and archives public social media activity and was one of the few companies with complete access to Twitter’s “firehose.”
It is also rare for startups in the state, especially software startups, to go public. One recent exception was Rally Software Development (NYSE: RALY) last year. With a market capitalization around $325 million, Boulder-based Rally is considered to be one of the Colorado tech industry’s biggest successes.
“We have too many companies that get to a certain point and then stall out or sell out,” Holston said. “I think that if we can intervene and help them get on a different strategic arc, then we will have succeeded.”
That doesn’t mean there won’t be any indirect support of startups. Holston said the network might support existing community events and organizations that focus on startups as long as the network can add value.
Of course, if the help the network provides leads to more billion-dollar companies, more IPOs, more experienced entrepreneurs and executives, and more money flowing into Colorado, odds are good early stage startups will benefit too.
5) Helping gazelles with their problems
Holston frequently uses the word gazelle to define the type of company the network wants to help. He admits it’s a concept without a fixed definition, but the main idea is that the company has the potential to grow into something very big.
“It could be $500 million, it could be $5 billion, but it’s a company that has a prospect to get to a very large valuation, that’s how I think about it,” Holston said.
At first glance, gazelles might seem relatively rare in Colorado, especially in the industries BEN Colorado will focus on. To use one very rough measure, the Denver Business Journal’s 2014 Book of Lists counted 64 public companies in the state with market capitalizations above $500 million. The publication used data from mid-2013.
Two biotech companies, Clovis Oncology (NASDAQ: CLVS) and Array BioPharma (NASDAQ: ARRY), made the list, as did Ball (NYSE: BLL), the parent of Ball Aerospace & Technologies. No software company made the cut. In comparison, Massachusetts has eight software companies with market caps over $500 million (with seven of them are over $1 billion).
“Historically, the view is we have a lot of companies that could get to that but don’t get there,” Holston said.
But it doesn’t have to be that way, Holston believes, if companies with potential for growth could get help from people who are already in Colorado.
“There’s a tremendous amount of experience and expertise that could help them avoid that kind of an outcome, if we’re thoughtful about opening up those networks,” he said.
How can BEN and its master entrepreneurs help? Gazelles face “a unique set of issues” that startups … Next Page »