Until recently, Boulder, Colorado, was best known as the butt of many South Park jokes.Thanks in large part to early stage investor Brad Feld, it’s also becoming a tech town.
Feld moved to Boulder in 1995 on an ultimatum from his wife and has been harvesting entrepreneurs there ever since.
His venture capital firm, Foundry Group, has invested in companies like Zynga, StockTwits, and Admeld. Feld also cofounded TechStars in 2005 which has helped more than 60 startups launch and get funded nationwide.
We spoke with Feld about the Boulder Boom, TechStars, his favourite startups, how he invests, and Zynga’s rumoured IPO.
Business Insider: To be frank, why are you in Boulder?
Brad Feld: I moved here in 1995 from Boston. I was investing in Boston, NYC, the Bay Area, and Seattle as an angel investor, and I was travelling across the country all the time.
My wife is a writer. She grew up in Alaska. She told me she was moving to Boulder and that I could come with her if I wanted to. We were married at the time so I chose to come with her [laughs].
My view was, if I didn’t like Boulder, I’d keep going west, except I never really wanted to live in the Bay Area. But we got here, loved it, and decided to never look back.
BI: What’s the vibe there?
Boulder is a very smart community. It’s a college town [CU – Boulder], so 20% of its population are students. It’s counter-culture, so there’s a hippie vibe to the place. There are a lot of people who moved here because they wanted to, so it’s very independent group with a high concentration of computer-savvy people.
BI: What was the Boulder entrepreneurship scene like when you arrived and how has it grown?
When I moved here, the thing I heard over and over again was that Boulder had great technical people but was lacking management and senior talent.
But during the first internet wave, there was this huge import of talent at the executive level. Many of the companies here recruited people from both the bay area and the east coast.
[Those early hires] developed senior leadership skills, so by the time 2005 rolled around they had been through an internet cycle. Now there’s an awful lot of people in senior executive-type roles.
What’s happened is from 2003 forward, there’s been a steady build of entrepreneurial activity. As the Web 2.0 phenomena started to take off, this was a place that was very encompassing of that, and by 2005-2006, there was a very vibrant, young startup scene again.
BI: How did TechStars come to be?
TechStars was started in 2006, and it fit into [the growing entrepreneur scene here] nicely. David Cohen, CEO and cofounder of TechStars, had this vision of getting many more companies started by integrating different people within the entrepreneurial community like angel investors, experienced entrepreneurs, and first-time entrepreneurs.
We ended up with this thing that was at the heart of the entrepreneurial community that really focuses on startups as a collaborative activity. Over the last six years, TechStars has blossomed. We’re now on our fifth program in Boulder.
BI: Silicon Valley has tech. New York has Wall Street. What’s Boulder’s reputation?
We actually make it a point to not care about Silicon Valley in terms of competition.
We’re also a completely different species of 100,000 people, not 3-10 million people, so to compare Boulder to Silicon Valley or to New York doesn’t make much sense.
The metric that’s useful in the comparison is entrepreneurial density. Namely the number of entrepreneurs per capita, or people who are working for entrepreneurial companies per capita, in Boulder is probably higher than any other place in the US. Maybe even the world.
My guess is that that number of angel-backed Boulder startups is closing in on 250-300. It’s a big number for 100,000 person city.
BI: Are you starting to see any promise of massive companies coming out of Boulder?
Boulder’s always had a handful of technology IPOs on the software side, but there has been a real drought from about 2001 onward.
Most of the technology companies here have been acquired. The result of that is some large companies have a significant presence in Boulder. You’ve got a nice couple hundred people here from Google as a result of the acquisition of SketchUp. Microsoft has an office that’s expanding around Bing properties. Oracle has a very significant presence as a result of acquiring Sun and BEA. IBM is here too.
We also have a number of companies that are well on their way to being public. Return Path, which is headquartered in New York, has two-thirds of its people in Boulder. Rally Software, which just raised a $20M financing, is growing too. So is Tendril Networks.
Beyond that, the biotech universe has always been very active here. The natural foods industry essentially started in Boulder. Look at the origins of the companies that ended up becoming Whole Foods — they were all Boulder-based companies.
Horizon Dairy and Celestial Seasonings began here too. So you’ve got these other areas of entrepreneurial activity, not just software and internet, and as a result you get this nice blend across whatever people are interested in.
BI: You’re on the board of Zynga. Any news about the IPO?
I can’t talk about any of that stuff, but I respect you for asking. But I can’t comment.
BI: What early stage startups are you most excited about?
One-third of Foundry Group’s investments are in Boulder. A couple are starting to grow like crazy.
One that came through TechStars is SendGrid, which does transactional email delivery. Another is called Trada. It’s Google Venture-backed and does crowd-sourced search engine marketing. Trada is closing in on 100 people, while SendGrid is closing in on 50.
Another company we invested, Gnip, has a very tight relationship with Twitter. Lijit started off as publisher search and they’ve really built an interesting ad network on top of a broad network of mid-tail publishers. It just did a $10M financing.
TechStars company Orbotix is making a ball controllable via smartphone. It’s the size of a tennis ball with a little robot inside that can be guided around. It’s fabulous for dogs and cats. Give it to an eight-year-old boy or girl and they won’t let go of it. You can imagine the military applications for something like that too.
BI: Many of the companies you invest in have been acquired, like AdMeld’s $400 million sale to Google. You seem to have a golden touch. What do you look for when you make investment decisions
If I have a golden touch, I’d also say that I have the opposite of whatever a golden touch is, because I’ve had a lot of things fail. I think part of the experience of being successful is that you have to have a lot of stuff not work.
At Foundry Group we have a set of themes that we’re very obsessed about. We use those themes as a filter. So if a startup is outside of a theme, we don’t spend time with it. If it passes through the filter of our themes — and we do make a few exceptions every now and then for entrepreneurs we have worked with before — then we go really really deep on the people and the product.
For us, if we know the people already it’s easy. If we don’t know the people, the only way you really get to know people in an entrepreneurial context is to do stuff with them. All four of us [at Foundry Group] try to interact as much as we can with the founders from the very beginning. If things look like they’re feeling good and making sense and it gets us excited, then we try to do something. If not, we stop. It’s very qualitative for us at this point.
A founder could be an amazing person, but I actually think [you need to invest in both] people and product.I don’t think the idea really matters that much. It’s the people and the people’s ability to create and build something.
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