In a recent report of Colorado private market trends, Ansarada & PitchBook highlight trends across private equity, venture capital, and M&A transactions. The report lists Rockies Venture Club as among the most active investors in Boulder & Denver. 

Colorado’s private markets roughly doubled in the last decade, with Colorado VCs bringing in about 7% of all US VC deal volume. Also contributing to this growth is strong accelerator programs like Techstars, strong out-of-state investment coming in locally, abundant PE and M&A activity in industries like mining and energy, and over a dozen major tech companies opening offices in the state, bringing in more tech talent.

The report also highlights 6 VC trends to look for in the Colorado startup ecosystem:

1. VC activity is growing in Denver and Boulder

2. Historically diverse sectors, like energy, are shifting

3. Early-stage valuations are climbing

4. VC deals sized up in Denver and down in Boulder

5. Local VCs are becoming more active

6. Outside firm are investing in Colorado startups

Read More Here

According to a new Crunchbase article on cleantech investing under the Biden Administration, venture investors and startup founders believe the president-elect will likely spark renewed private-sector investment in cleantech and clean energy. With Biden’s agenda focusing on steering away from fossil fuels, cutting greenhouse gas emissions, investing in climate progress, investors anticipate an increase in Department of Energy-funded projects, more access to federal land, and expanded opportunities to invest in startups.

Under the current administration, the private sector and many state governments stepped up to fill gaps in federal policy around climate change. Cleantech investments ramped up between 2012 and 2018, leading up to a peak of $4.9 billion invested in 2019. In the past eight years, the most popular industries in terms of venture funding have been renewable energy, solar, and sustainability. In 2021 and beyond, there will likely be a focus by investors on consumer-facing cleantech, energy alternatives and software rather than infrastructure, which remains highly capital-intensive.

Interested in learning more about cleantech investing and implications of the Biden presidency on the industry? Please join us this Friday, December 4, at 12:00pm MT for a free RVC Community Webinar focused on the cleantech industry. Register here!

Read More: McKinsey & Company

In a recent report analyzing the Black-white wealth gap, McKinsey & Company consultants highlight the barriers and interventions to developing community wealth through business ownership and entrepreneurship. The racial wealth gap, exacerbated by the COVID-19 pandemic, is projected to cost the US economy $1 trillion to $1.5 trillion per year by 2028. Statistics around ownership and wealth – only 5% of Black Americans hold business equity (compared to 15% of white Americans); the median white family’s wealth is over 10x the wealth of the median Black family’s – further highlight this gap. 

Barriers to business building for Black entrepreneurs include economic, market, sociocultural, and institutional barriers, which are all linked to racial discrimination in the United States. Economic barriers around access to capital affect scaling and growth; according to the report, Black entrepreneurs are three times as likely as white entrepreneurs to say that a lack of access to capital negatively affects their businesses’ profitability and almost twice as likely to cite the cost of capital.

The article calls for key interventions across public, private, and social sector stakeholders, including implementing policies that produce equitable outcomes, enabling equitable access to capital, building business capabilities, facilitating knowledge sharing, and expanding opportunity for mentorship and sponsorship. RVC is working to increase our offerings of educational and financial resources for BIPOC-owned startups, understanding that the impact of closing the racial wealth gap can restore trust in institutions and strengthen our state and country economically and socially. Looking to contribute? Please contact us info@rockiesventureclub.org to get involved or access resources.

Read Full Report from PwC / CB Insights

Two weeks ago, we highlighted Pitchbook data showing quarterly VC funding for female founders had dropped to three-year low in Q3 2020. Despite this contraction in funding for women-led startups, Q3 funding to US-based, VC-backed companies is the second strongest quarter ever.

VC investments to US-based companies hit a 7-quarter high at $36.5B, up 22% year-over-year and 30% from Q2’20. Other trends in the data include:

–Deal activity remained largely the same from Q2 to Q3, although Q3 deals are still down 11% year-over-year amid the COVID-19 pandemic.
–Mega-rounds accounted for 54% of total funding, with 88 companies raising $100M or more in the US. Seed deals also rose for the second consecutive quarter.
–In terms of industry trends, four emerging areas attracted the majority of deal activity – Digital Health, Fintech, Artificial Intelligence, and Medical Devices.
–Colorado accounted for $250M of investment across 41 deals in Q3.


Interested in helping strengthen Colorado’s startup ecosystem in Q4? There are plenty of opportunities to get involved with RVC. Learn about industry trends in pandemic technology at the RVC Community Webinar: Industry Spotlight – Pandemic Tech on November 6. Use your expertise to mentor a company at the upcoming Pandemic Tech HyperAccelerator, happening November 9-14. Or, join us at Reversing the Trend: Funding Female Founders on November 19 to catalyze investment in women founders. We hope to see you at an upcoming event soon!

Read Full Report: Pitchbook

Last week, Pitchbook released the results of a global survey of investors and advisors about sustainable investments. Across a mix of LPs, GPs, Fund of Fund Managers, and other private market ecosystem participants (including angel investors), survey participants provided insights into impact investing, environmental, social, and corporate governance (ESG) policies, and the evolution of this rapidly maturing industry.

Of particular interest, the report features an interview with Christine Tsai, CEO and Founding Partner of 500 Startups, on ESG policies in early-stage startups. As she notes, “one common misconception is that it’s too early for young companies to integrate ESG policies…but it’s never too soon [for VCs] to raise awareness by asking startups in their formative stages to think hard about the long-term impact of their actions as they outline their mission.” Strong ESG leadership allows companies, even startups, to capture opportunities and mitigate risk that may otherwise be overlooked.

At RVC, we are often thinking about how to mobilize capital in a more inclusive, sustainable and impactful way. This week, the RVC team is virtually attending SOCAP, a world-renowned conference series dedicated to increasing the flow of capital toward social good (say “hi” if you are attending too!). We are also looking forward to bringing together women founders, funders, and allies for an evening of community-building and angel investing at Reversing the Trend: Funding Female Founders on November 19. We hope to see you at an upcoming event soon!

Read Full Report on Pitchbook

In a new report focused female-founded ventures, Pitchbook has identified a concerning downward trend in VC funding for women-led companies. Their data reflects a decline in both deals and capital invested, with firms investing a total of $434 million in Q3—the lowest figure since the second quarter of 2017. Q3 2020 also reflects a 48% drop in funding from Q2, when female founders received $841 million across 132 deals.

Why is this happening? The report brings forth a few hypotheses: venture capitalists’ unwillingness to adopt new processes related to deal flow; additional caretaking and remote-schooling responsibilities that disproportionately burden mothers; economic uncertainty discouraging risk-taking; and the trend toward follow-on vs new investments in the downturn. 

While RVC’s angel investment portfolio has maintained close to 50% investment in companies founded or led by women, the contracting venture capital ecosystem represents an increased need to mobilize female founders and investors. RVC and the Women’s Investor Network are bringing together women founders, funders, and allies for an evening of community-building and angel investing at Reversing the Trend: Funding Female Founders on Thursday, November 19 from 3-6pm MT. 

At this event, investors and community supporters can learn and discuss with industry experts, hear pitches from women seeking capital, network with founders and funders, and start the RVC angel investment process, all in a virtual setting. 

Like many of you, I attended my first virtual conference a few months ago and while the content was great, I missed the networking that I value so much from conferences. 

Now, I’m planning my second virtual conference of my own and I’m prioritizing not only implementing technology that supports networking, but making sure that I create a culture in the conference around actually using it.  What follows is some advice for both conference organizers and attendees to get the most networking out of an event.

Principle #1:  Talking heads put people into “passive mode” and they check out.

Solution: Mix up engagement models throughout the conference. 

Sure you can have keynotes and panels if you must, but then have breakout sessions where people are encouraged to talk, question and share.  Build in plenty of “white space” – time where people can engage with the networking opportunities your virtual conference has provided.  And finally, provide opportunities for both one-on-one networking and small group interactions.

My first virtual conference had built in networking functionality, but I really couldn’t figure out how to use it, and when I did reach out to others, they apparently couldn’t figure out how to respond either.  Online networking is as much a “warmware” issue as a software challenge.  Conference organizers need to not only have software that facilitates networking and collisions, but they need to train users to make sure that they understand how it all works and that using this functionality is expected of them.

I started planning by thinking about how networking happens at face to face conferences.  There were six main ways that I connect with my peers at conferences:

  1. “Collisions” where I run into peers in the hallways at events.
  2. In session connections – it can be rude, but finding someone you know and sitting next to them and chatting when appropriate.
  3. “Clusters” where three to five people meet up casually in-between sessions and chat.
  4. Meals and Cocktails where you seek out people you want to meet with and have lunch, dinner or cocktails with them.
  5. Trade show style booths are also a way to meet with vendors you’re hoping to connect with.
  6. Pre-scheduled meetings are a more intentional way to make sure that you meet up with the people you need to see at an event.

All of these are based on finding a physical space or place to connect which seems to run counter to the structure of a “virtual conference.”

When planning for my upcoming conference, I thought of it not so much as a website, but as a physical event space.  Here’s a blueprint I came up with to designate the reception and checking area, hallways, breakout sessions, plenary sessions, and vendor booths. 

By breaking all of the different ways that people would interact with each other into a physical space model, it makes it easier for conference attendees to get a feel for how they are supposed to interact in this unfamiliar virtual conference space.  As an attendee I can see the expo hall options, the network drop-in sessions, one on one opportunities and the presentation spaces.

To make this work, we ended up doing something a bit unconventional.  We used Hopin as the reception and networking areas for the conference, and Zoom for the Plenary and Roundtable sessions.

We did this because Zoom is well established and familiar to everyone.  We needed a platform that our speakers could plug into easily and that would have familiar interfaces for presenters to share their screens while viewers had the ability to connect via chat.  But Zoom means talking heads and we wanted to break out of that mold. We really like the concept of Hopin and it has some of the best networking options we’ve seen, but the Main Stage is quite difficult to navigate and getting someone backstage is tricky.  Once they’re there, sharing screens and seeing what you’re presenting is not so easy.  Rather than risk a disaster, we opted for the dual platform.

Hopin’s networking allows us to facilitate multiple types of networking on the platform, which is really great.  Here are the ways we used Hopin to facilitate connections at the conference:

  1. Hang out rooms – We created Hopin “sessions” where participants can join in with smaller groups to get to know each other.  These sessions are open during the entire conference, so attendees can stop by any time and see who’s in the rom.
  2. One-on-one Networking is a great feature in Hopin.  This zone automatically pairs participants who opt-in to be connected with each other for three minutes (or longer if they want to extend) and then the platform facilitates sharing contact information if they want to connect later.  I found this function to be fun and to be a great way to meet people in a way that I wouldn’t easily have available to me at a typical in-person conference.  It is similar to speed-dating networking sessions I’ve seen at certain events, but not typically at conferences.
  3. Wine-Down:  We’ve created an end of day small group networking opportunity for participants to grab a glass of wine, beer or cocktail of their choice and connect with others at the conference in a casual setting.  We supply sample discussion points to get things going, but those are strictly optional and people can chat about whatever they like.  We set up a wine sponsor who sent discounted gift boxes of high quality single serve wines to participants who opted in for that. 
  4. Trade Show Booths
  5. Impromptu Sessions with one or more participants

For the Roundtable sessions, we opened up Four Zoom Rooms so that each of the different breakout topics would have their own room.  With this structure, we were able to allow all participants to be able to turn on their video and microphones and actually engage in discussion.  (Of course, microphones go on mute when not speaking.)  We could host between 100 and 500 people in each of these sessions.

Plenary sessions where everyone is viewing keynote speakers or, in our case, venture capital pitches, were also done in Zoom.  This allowed us to switch rapidly between presenters and everyone was already familiar with the platform.  The key, though, is never to have more than sixty minutes with any one kind of interaction.  Keep it moving by switching up how attendees interact and their brains will be stimulated.

Final advice for attendees:  be proactive in how you approach a virtual conference.  If done right, attending a virtual conference with a good networking platform can provide you with MORE rather than fewer networking options! 

Look through the registrations (if available) and identify who you want to meet with in advance.  Learn the connection options and reach out to make connections with one or more people at a time.  Make sure you get contact information to follow-up with people you’re interested in.  If you have to miss a panel or two in order to make great connections, don’t worry.  Most virtual conferences record the sessions, so you’ll often have a chance to catch up on the content later while focusing on relationship building during the conference.

Shameless Plug:

If you’d like to see all this in action, and get great startup content about resiliency during the pandemic, be sure to check out the Colorado Capital Conference.  Even if you’re not from Colorado, this event is open to anyone and the speakers and pitches apply virtually anywhere.  We’ll have Brad Feld from Foundry Group to talk about many types of resiliency and some of the themes in his new book, The Startup Community Way: Evolving an Entrepreneurial Ecosystem  We’ll have Denver’s Mayor Michael Hancock sharing the unique resiliency the city has shown in responding to the pandemic.  Join us! 

First of all, you shouldn’t create an exit strategy for an investor – it’s actually the first question you should answer for yourself if you’re thinking about a startup.

The Exit Strategy – Cornerstone of Startup Success

You see, the exit strategy is about understanding who your customer is. Not the customer who buys your widget or app that you make, but the customer who buys your customer. The value proposition for this customer is different from the value proposition that you may have for your “first” customer who buys your product – the “second” customer who buys your company is much more important.

The second habit of the Seven Habits of Highly Successful People is “Begin with the end in mind.” This is more true for startups than anything else I know. Startup founders who understand their exit strategy are able to align all their strategies and people towards that single value proposition.

So how do you articulate a great exit strategy? There are six things you should think through carefully.

  1. Look at that past. Who in your industry is acquiring companies. Why are they acquiring them, and what patterns can you find in their acquisition activity? Specifically, if you can find 1) what is the average acquisition amount for companies, 2) what is the revenue multiple (how much the company was acquired for, divided by the trailing twelve month revenues for the company), 3) what drove the strategy behind the acquisition? Following these patterns will let you know who the likely acquirers are and how big you need to grow to be in the “sweet spot” for acquisition.
  2. Look at the future. What are the trends in your industry that point to your solution being a big solution to gaps that the big incumbents in your industry will need to fill? This is the Wayne Gretzky point to learn “where the puck is going and not where it is.” If you can be ahead of the incumbents and innovate, then you’ll be ripe for acquisition at a high multiple.
  3. Understand your values and the values of your acquirer. More than half of acquisitions fail because of values misalignment. You’re passionate about what you’re doing, so you want to make sure that your acquirer is also passionate about carrying on what you’re doing, but with ten times the impact in the communities you sell into.
  4. Build a team. I don’t mean the team on your “team slide” on your pitch deck. You need another team for your exit that includes direct employees who have been through acquisitions before, investment bankers, M&A transactional attorneys, and CPAs familiar with audits, valuations and transactions. You’re going to be acquired by professionals and you can’t take an amateur approach.
  5. Timing Strategy. You can’t define when you’ll be acquired, so you should always be ready for acquisition. I know a company who was acquired for $20 million before they ever had a customer, or an investment round. The two founders pocketed $10 million each for seven months of work. Early exits can be awesome, so long as you understand your early exit value proposition. Later, your value proposition evolves as you prove product market fit and gain many new customers which might be attractive to growth stage VCs or strategic acquirers. Even later you’ll have positive cash flow that may be attractive for Private Equity acquisition. The point is that you should know your value at each inflection point, know who you’re valuable to, and how much your company is worth at that stage.
  6. Know your acquirer. If you’re going to be acquired, it helps if the acquirer knows you exist. As you go through your timing strategy, you should define the potential acquirers and how their company is structured. Some acquirers drive M&A through the CEO and CFO, others have Business Development teams, others have M&A departments that execute the wishes of the board, and still others will drive acquisitions through product managers who bring in acquisitions to build out their product lines. Remember, companies don’t acquire companies, people do. You need to define who in the company does the acquiring and get to know them. Connect on LinkedIn. Write blogs and include them on the distribution lists. Go to trade shows they go to. Do podcasts, guest visits, and reach out via email introductions. The more well known you are as a thought leader and innovator in your space, the more likely you’ll be considered for acquisition. Don’t even think of being in “stealth”mode for more than a few months while you develop your MVP.

Investors don’t make money on your cash flow, so make sure you’re developing a capital strategy designed for growth. Investors only make money when you exit, so if you don’t have a great answer to the “what’s your exit strategy” question, then you’re not ready to raise capital since you can’t answer the question they’re really asking – how will I get my money back?

Interested in learning more about exit strategies, capital raising, valuation, term sheets and more? Check out the Angel Capital Summit, membership for both angels and founders at Rockies Venture Club and upcoming classes, workshops and accelerators for BOTH angel investors and entrepreneurs!