talking with local VCs who have no more money to invest. And they have little interest in attending the dozens of innovation-oriented events that nonprofit groups like Connect, CommNexus, and the San Diego Venture Group hold each month. They don’t think the topics or speakers relate much to what they’re trying to accomplish—and even if they did, they’re not going to pay $50 to attend. Generally speaking, they say they just don’t get much out of networking with the folks who attend such events, including San Diego’s older generation of enterprise software executives.
It was this situation that prompted Spencer to arrange a call with the Foundry Group’s Mendelson. As we recounted our discussion with him, Mendelson said it sounded much like the software scene in Boulder when he moved to the Colorado college town five and a half years ago. With a population of only about 100,000, Mendelson said Boulder now ranks, “at worst, as the fourth-largest in terms of new company formations and companies getting funded.”
He talked about the factors that helped lift Boulder’s software sector out of the doldrums, beginning with the key role the University of Colorado has played in fostering a startup community, a common theme in most tech clusters. UC San Diego has served a similar role here through programs offered by the Jacobs School of Engineering, the medical school, and the Rady School of Management.
People tend to over-rate the importance of homegrown VC firms, Mendelson said. He estimated that 70 to 80 percent of the venture capital flowing into Boulder these days has been coming from firms outside the city. Likewise, Foundry Group does not restrict its hunting grounds to Boulder or even the Rocky Mountains. Like most VCs these days, Mendelson says Foundry is making investments throughout the United States.
So what’s the missing ingredient?
“Do you have somebody there who is willing to do something like TechStars?” Mendelson asked. “You need somebody to be a promoter, somebody willing to work 24/7, to live and breathe this stuff.”
Mendelson said David Cohen has done that as the CEO of TechStars, the business accelerator that was founded in 2006. Since then, the mentorship-driven, seed-stage investment fund has expanded to Seattle, Boston, and New York City. But Mendelson said he doesn’t see TechStars expanding
