By Andy Vuong
The Denver Post
POSTED: 04/20/2014 12:01:00 AM MDT2 COMMENTS
J.B. Holston, director of a new $4 million entrepreneurs network that will be based in Denver, says: "You create and keep much more wealth within the state" by keeping company headquarters in Colorado. (RJ Sangosti, The Denver Post)
While Colorado is recognized as a top hub for entrepreneurship and innovation, the state's startup ecosystem still struggles to keep potential large-scale successes from uprooting in search of capital, engineering talent or other resources.
The Blackstone Group, one of the nation's premier private-equity firms, will announce this week the launch of a $4 million program in Colorado to help address that shortcoming.
The Blackstone Entrepreneurs Network will also aim to strengthen Colorado's startup community by encouraging greater collaboration among local businesses, which are generally siloed by geography and industry.
"This is really a different and new and additive effort to everything else that is going on in the state," said serial entrepreneur J.B. Holston, who will serve as the network's executive director.
The network will identify so-called gazelles — high-growth companies that may be on the cusp of Google-like success — and connect them with resources to reach the next level without defecting to another state.
"We've got a lot of great conditions for fostering entrepreneurship and innovation ... but we have too many companies that get to a certain stage, then either stall out or sell out rather than scaling up," said Holston, chairman and founder of Denver-based enterprise software maker NewsGator, now called Sitrion.
The Blackstone Entrepreneurs Network, or BEN, has attracted 20 advisers that include the likes of Foundry Group's Brad Feld, Zayo Group's Dan Caruso, Wild Oats Markets' co-founder Libby Cook and iTriage CEO Peter Hudson.
Advisers will help find gazelles and the support they may need, which will include identifying prospective mentors, or "master entrepreneurs."
BEN will focus on five industry segments: technology and broadband, biotech and health, aerospace, natural foods and energy.
Companies that fit certain criteria, which will vary by industry, can apply to join the network. For digital technology companies, the requirement will be $5 million in revenue, 50 employees and 25 percent top-line growth.
The Blackstone Charitable Foundation will fund the program with a three-year, $4 million grant to be overseen by the Silicon Flatirons Center for Law, Technology, and Entrepreneurship at the University of Colorado at Boulder.
"It's a program that's been designed to create a deep network of experienced entrepreneurs in a variety of industries to help mentor high-growth companies," said Jonathan Gray, global head of real estate for Blackstone.
Gray said the idea to create the program in the state started with conversations Blackstone officials had with Sen. Michael Bennet, D-Colo., a little over a year ago. Blackstone has a similar network in North Carolina, but that initiative is primarily focused on identifying and supporting innovations from area universities.
Blackstone's presence in Colorado is set to surge with its pending $5.4 billion buyout of Denver's Gates Corp. The deal will take the number of employees who work for Blackstone-backed companies in Colorado to 4,000.
Bennet said the company's entrepreneurs network will help grow jobs in Colorado.
"What we've seen is there are companies that are founded in Colorado, but then they move, they go to California, or they go to Boston, or they go to Austin," Bennet said. "We want this to be a place where they stay, and where they can generate those jobs."
The benefits of keeping the headquarters of a highly successful startup would stretch beyond jobs.
"You get a lot more management experience," said Holston, who co-founded six Colorado enterprises over 16 years. "You create and keep much more wealth within the state. And typically you also then start to create a micro-ecosystem of companies around those really big successful companies."
Holston will be based at the Galvanize tech campus in Denver's Golden Triangle neighborhood. The network will also operate out of Galvanize's Boulder office.
Amy Stursberg, executive director of the Blackstone Charitable Foundation, said the goal of the foundation is to strengthen entrepreneurial ecosystems across the country. She said Colorado will serve as the steppingstone for the creation of similar networks in other states, helping Blackstone establish a "tool kit" for such programs.
The Blackstone foundation is issuing its largest grant to fund the Colorado network.
"This is an incredible inflection point for our entrepreneurial and growth-company community," said Erik Mitisek, CEO of the Colorado Technology Association. "When you think about Blackstone, one of the largest real estate and private equity operations in the world, for them to personally invest in the state of Colorado at this level is a head nod to the activity, to the opportunity and the type of companies that are coming out of our region."
Andy Vuong : 303-954-1209, email@example.com or twitter.com/andyvuong
Read more: Blackstone grants $4 million to create Colorado entrepreneurs network - The Denver Post http://www.denverpost.com/business/ci_25597592/blackstone-grants-4-million-create-colorado-entrepreneurs-network#ixzz2zZ3bUAth
Follow us: @Denverpost on Twitter | Denverpost on Facebook