or even successful established firms don’t face, Holston said. One is finding “C-level” and other senior executives who have experience building billion-dollar companies and who know how to manage rapidly expanding companies that might have hundreds of employees spread across the world.
That requires different skills than building a startup, and people with that kind of expertise generally have to be recruited from outside Colorado, he said.
Another issue is buying up rivals. Acquisitions are an important way of scaling up companies, but the founders and managers of gazelles might not know what it takes to successfully acquire and integrate a competitor.
Holston said that’s where the advice of a mentor who has done that before, even if she is not in the same industry as the company that needs help, could be very valuable. And while Colorado companies tend to be acquisition targets rather than acquirers, he said that there are enough potential mentors in Colorado to help companies develop acquisition strategies.
6) How will BEN find gazelles?
Holston acknowledges there isn’t a ready-made list of gazelles and it isn’t clear how many there are in Colorado.
“I don’t know if we know, that’s the short answer,” Holston said.
But based on meetings with companies and hearing the chatter among the various industry networks, Holston is confident there are many out there.
“There’s a general belief we must have 100 entities with these characteristics, but that’s not a very scientific assessment,” Holston said. “Are there 100 prospective billion-dollar valuation companies lurking in Colorado? Probably. Will we have 100 that will get to that valuation in three to four years? Probably not.”
The criteria to qualify for BEN Colorado’s assistance are yet to be determined. Holston said he will work with the network’s advisers to draw up guidelines that will be released by the end of May. The guidelines will vary by industry, and in practice BEN will be pretty flexible and allow for judgment calls.
Factors like revenue growth, venture capital funding, number of customers, and number of employees are likely to be considered when determining which companies qualify.
In the meantime, Holston is not waiting around. He said he’s already making connections with companies and advisers that have expressed interest in being part of the program.
“Right now we are casting a very broad net, both on the adviser and on the company front. We’re encouraging any company that thinks they have gazelle-like prospects to reach out and contact us,” he said.
While Holston and BEN’s advisors will be working their own personal connections to find companies, he concedes they could miss some candidates, which is why they’re also taking applications.
“There are going to be great companies that we just don’t know about because they’ve been heads down doing great work, and they never had the chance to stick their heads up,” he said.
Holston said he wants to be able to tell some success stories within 60 to 90 days.
“We’re already talking to companies, I’ve already got advisers engaged with companies, and we are accelerating the pace at which the networking is happening already.
7) Challenges and problems ahead
There’s great excitement about Blackstone’s involvement and the network’s potential, but there are a number of potential pitfalls, Holston said.
First, BEN Colorado will be breaking new ground. While the Blackstone Charitable Foundation established a program in North Carolina’s Research Triangle in 2011, Weiser said that initiative is more focused on startups spun out of area universities that are in an earlier stage of their development.
Neither will BEN Colorado be involved in technology transfer, for which there are many models, including the technology transfer office at CU.
That means there isn’t a playbook for Colorado to follow, Holston said.
“This hasn’t been done before. It’s not like there’s a model. There are things like this that have been happening in certain ways, but nothing exactly like this happening with this set of characters,” he said.
Holston said a second challenge will be avoiding the perception that the network is only for software and IT companies and has a narrow geographic focus. An example he gave would be creating the impression that BEN Colorado is oriented toward Boulder-based software startups at the expense of other companies and industries.
“Everyone who participates across the geographies in these industries, we need them to feel this is helpful for them, and if this is felt in anyway to be competitive or exclusive, that would be bad,” Holston said.
BEN also will need to stay entrepreneurial and be willing to try things that might not work out, he said.
“It would be very easy to get caught up in process and not just getting shit done,” Holston said.
8) How will the $4 million be used?
Along with the Blackstone connection, a lot of attention has been given to the $4 million the Blackstone Charitable Foundation is putting up. That money will go toward supporting BEN Colorado.
“We’re not going to be giving out money or anything like that. It’s an operational budget for staff and programming,” Weiser said.
BEN’s leaders are working out how they’ll use that money, Holston said.
“Exactly how we spend that budget is going to be determined as we roll forward over the next 60 to 90 days,” he said.
9) What role will Blackstone play?
Blackstone is one of the world’s largest global investment and advisory firms, and according to its website it manages $272 billion in assets for public and corporate pension funds and academic, cultural, and charitable organizations, among others. Blackstone (NYSE: [[ticker:BX]]) is publicly traded, and as of Tuesday it had a market cap of $16.9 billion.
The firm’s charitable arm, the Blackstone Charitable Foundation, is responsible for the local network. It’s part of a $50 million program known as the Blackstone Entrepreneurship Initiative, which will create networks similar to BEN Colorado and BEN North Carolina around the country.
The relationship with the firm and foundation comes with few strings attached, Weiser said. Blackstone hasn’t made a commitment to invest in the companies in the network, he said, and while the foundation wants to see that its money is well spent, it is largely up to Holston and Silicon Flatirons to give the program its shape.
“The Blackstone vision is they want to help get this launched and then it’s up to us to maintain it in whatever form that we can that’s sensible and sustainable,” Weiser said.
That doesn’t mean Blackstone won’t be involved and contribute to BEN Colorado’s success.
“The firm is a huge asset, and their excitement and engagement is part of the opportunity as well, so we will look for good points of connection and leverage,” Weiser said. That could include connecting local companies with mentors from Blackstone.
There’s also the intangible value that comes with having what Holston called “the Blackstone imprimatur,” which is a sign it believes Colorado is one of the leading centers for innovative companies and has faith in its local partners.
10) Building a legacy
Blackstone’s $4 million will support BEN Colorado for three years, but Weiser and Holston hope to establish something that lasts well beyond that.
“Our vision is that we’d be able to incorporate this into the community for longer than that,” Weiser said.
At best, BEN could help provide key assistance to several gazelles that make the leap to billion-dollar companies, which would lead to an influx of cash and managerial talent into Colorado. Those companies could become “tentpoles” that lead to spinoff companies that also go on to success, Holston said.
“If some companies get to a bigger outcome by virtue of BEN existing, then I think we will have accomplished our goal,” he said.
Another measure of success would be breaking down silos so successful entrepreneurs and executives in various industries continue talking with each other.
Ultimately, Holston said he’d like BEN Colorado to be a vital part of Colorado’s innovation ecosystem for years to come.
“There are a lot of things in Colorado that have started over the years that have started and stopped, maybe because they were funded by government, or they weren’t managed to add value over the long haul. This shouldn’t be one of those,” Holston said.
