Denver’s startup community has experienced a rapid increase in size and activity over the last several years. In 2015, it was rated as one of the best cities to create a startup. According to the Ewing Marion Kauffman report on entrepreneurship, it came in number five as the U.S. city with the greatest startup activity, surpassing San Francisco and New York. (Startup activity is based on the number of new startups that are a year or less old.)
Last year, 95 Denver tech startups were funded, raising a total of $683 million. There were also 59 exits, which earned Denver tech companies a total of $2.7 billion. This was even a decrease to a record-setting 2014 in which 140 Denver startups were funded bringing in a composite investment of $758 million.
In speaking to tech startup founders in Denver, it turns out that physical aesthetics have a lot to do with the city’s appeal.
Brian Beyer, founder of a Denver-based cyber security startup, called Red Canary, said that he was planning to work in Virginia. But then he took a trip to Colorado.
“It was November and it was 50 degrees. I was driving with all my windows down, and the mountains were majestic,” he said.
Almost everyone else I spoke to said something similar about the mountains. Tech startup founders must have a special affinity for the mountains. Perhaps it’s the symbol of a great challenge that inspires them.
Symbolism aside, many who live and work in the Denver area, say that people really value a healthy work/life balance.
“We made a conscious decision to build our company here because it embodies the type of work/life balance that we want for our employees, and that is shared by our customers,” Beyer said.
Furthermore, Beyer said that employees stay at one company for longer in Denver. He said that the average engineer stays at a startup for nine months in the San Francisco Bay area, and for an average of 13 months in Boston.
“We want people to be happy and stay for several years,” Beyer said of his company.
In addition to the scenery and the strong work/life balance mentality in Denver, startup founders are establishing companies in the city because there is a sizable and well-educated talent pool.
Denver is among the most educated cities in the U.S., with 53 percent of the population holding a bachelor’s degree. And Colorado is the number one relocation destination in the U.S. for skilled workers ages 25 to 44.
While tech companies are able to attract talent from the west and east coasts because of the high quality of living in Denver, Eric Remer, founder of Denver-based startup, PaySimple, a payment management platform for service businesses, says, “there is great talent that already exists here.”
Many are young college grads from schools in the region, including University of Colorado Denver, University of Colorado Boulder and Colorado State University.
“If you’re from the Mountain West states, like Montana, Nebraska, Wyoming, Denver is your big city,” Remer said.
Transportation is another key factor, and Denver wins big in this department. It has a new, multi-billion dollar rail system called FastTracks, which is continuing to expand.
The fact that Denver has a new, well-designed transportation system, among other infrastructure benefits, is no coincidence, said Mizraim Cordero, Vice President of Government Affairs for the Denver Metro Chamber of Commerce.
He says that this is the result of significant and purposeful local and federal government investment in the city from as far back as the 1980s. In addition to the expanded rail system, other fruits of this investment include the new Denver International Airport, which Cordero says is now the largest American airport by landmass, and is only half built.
Additionally, the National Renewable Energy Lab (NREL), a federal lab built in Denver in 1974, has recently brought new tech jobs to the city with the completion of a new facility in 2014.
Back to that new airport. Rachel Kim, who works in communications for Gusto, a San Francisco-based payroll compliance startup that just opened its second office in Denver this month, said that Denver’s close proximity to the bay area, made it a convenient location. (Denver is 2.5 hours from San Francisco by plane, and has just one-hour time difference). Kim also focused the fact that Denver was appealing to Gusto because of its vibrant entrepreneur community.
“We have a really supportive startup environment, partially because we’re a relatively smaller community,” Remer said. “The companies out here, they’re rooting for each other.”
The technology startup community is not brand new to the Denver area. But it used to be concentrated in Boulder, Colorado, a smaller city a little less than 30 miles north of downtown Denver. Boulder is where the prestigious Techstars startup accelerator program originated. It’s also the home of the Foundry Group venture capital firm, co-founded by Brad Feld, who has been a thought leader in the startup world for decades.
“Boulder used to be the tech hub,” said Rod Buscher, founder of Denver-based Blinker, an app that allows users to learn detailed information about a car by taking a picture of it. “But it’s now migrating to Denver.”
General Assembly newest campus is opening in the LoHi (Lower Highlands) district of Denver, the heart of Denver startup community, and home to some of the newest stores and restaurants.
It is also close to Union Station, the city’s main train station that connects to suburbs and other cities. This means that GA classes will be accessible to people throughout the Denver area and beyond.
“Techstars and the Foundry group did a great job of bringing exposure to the tech community in Colorado,” Remer said. “Now no one looks at Denver as a stop-over anymore.”
Get to know GA Denver.