The Bottlenecks of Every Small Startup Community
Talent and capital
Startup Colorado, version 2.0, focused on building startup communities across rural Colorado, has been in action for six months. In the quest to build a model for fostering small town entrepreneurship, the organization started where any young business would – by talking to customers.
These customers are Colorado’s small communities, towns that share an entrepreneurial spirit, but often lack the network and infrastructure of a typical startup friendly hub.
Car mileage be damned, Startup Colorado is six communities into its journey. With each stop along the way, the team gathers entrepreneurs and community leaders to take an honest inventory of what is working and where they can improve across five major categories:
While each community has its own strengths and weaknesses, there are two consistent problem areas for rural entrepreneurs:
Hiring is notoriously difficult for startups. This issue is amplified when startups don’t have access to many of the candidate pools present within successful startup hubs. For example, a startup in Boulder has access to thousands of potential hires that come through the University of Colorado at Boulder, community programs like Startup Summer and the natural ebb and flow of a robust labor pool.
Fortunately, there are some assets to overcome this obstacle. Rural Colorado startup communities can focus on strengthening ties between local businesses and local colleges like Fort Lewis College, Colorado Mesa University, Colorado Mountain College and Western State University. Not to mention, many towns have an underemployed, overqualified workforce waiting to find career opportunities. The trick is finding and engaging them in the entrepreneurial community as early as possible.
Startup Colorado is actively exploring ways to address this, including how the Startup Summer model can be exported from the Front Range. However, building reliable talent sources will take time, and many Colorado startups headquartered in rural communities need to hire now.
Entrepreneurs raising capital from Boulder – a startup community case study in its own right – still receive feedback from outside investors that their scenic locale is a handicap. Now imagine that conversation if your company were located in Carbondale. Many investors simply aren’t aware that great businesses have and will continue build in unlikely places. Durango’s Mercury Payments (acquired by Vantiv) and Steamboat-based brands like Smartwool, Big Agnes and Honey Stinger are proof that investable opportunities exist all over Colorado.
So how do we overcome this investor handicap?
This January, Startup Colorado hosted its first Venture West Summit, convening five Western Colorado startups and investors from across the state for a half-day event in Gunnison. Six weeks later, investors and entrepreneurs filled Steamboat’s Chief Theatre, once again proving there are entrepreneurs and investors ready to make a match. Sometimes, the solution is as simple as putting the right people in the same room together. Such events not only help attract investors, but also breed a culture of entrepreneurial support.
While more investors and showcase events will help, funding the Rural Startup Revolution will take some long-awaited venture innovation. A healthy rural ecosystem needs to encourage non-unicorn entrepreneurship. For investors, this requires straying from traditional equity mdeols (including convertible structures) to find competitive returns. Many new capital players have stepped up as leaders, including Four Points Funding out of Steamboat and the Greater Colorado Venture Fund; but this new frontier of finance will require the entire ecosystem to embrace a collaborative approach to investing.
As the startup revolution grows and matures, entrepreneurship will become a staple of the economy and culture of every town. Whether or not this happens within 10, 20 or 30 years in your hometown depends on the vision and collaboration of local leaders. Problems like talent and capital will plague rural America’s entrepreneurs indefinitely unless we take an ecosystem-wide collaborative approach now.
Do you have an idea for how to solve the talent and capital problems of rural entrepreneurs? We want to hear from you. Email Jamie.Finney@Colorado.edu.
Ready to get your hands dirty in rural entrepreneurship? Join us at the Mountain Ventures Summit in Telluride, Apr. 5-7.
Jamie Finney is a cofounder at Kokopelli Capital, an early-stage venture capital fund for startups across the Rocky Mountain region. Building off his experience meeting Colorado's small-town entrepreneurs and community leaders, Finney is an author and editor-in-chief at Venture Town Hall, a publication devoted to small-town entrepreneurship. Previous he ran Startup Summer, sourcing interns to more than 50 Colorado startups and providing an education for the nationally recruited interns. Often a champion for student entrepreneurship, he cofounded TEDxCU and was a director at Spark Boulder, Colorado's first student coworking space.