The Colorado Venture Capital Authority (VCA) supports access to venture capital for Colorado's entrepreneurs and startup businesses. The VCA is a political subdivision of the state and a Special Purpose Authority like the Public Employees' Retirement Association. The VCA is governed by a board of directors that partners with professional fund managers to deploy its capital and the Office of Economic Development and International Trade (OEDIT) staff provides administrative support to the VCA.
The VCA is organizing its fifth investment fund and is seeking input through a request for information (RFI) process prior to soliciting interested fund managers. Through this RFI we hope to identify partners that work with businesses from startup to growth stages - especially those working with underrepresented founders (including women and minorities) and communities (including the state’s urban enterprise zones) so that we can connect with the ideal professional fund management team to implement the plan.
Mission of the VCA
The Venture Capital Authority uses its evergreen fund to fill gaps—areas and stages with limited access—in the VC realm with the goal of growing Colorado’s innovative economy and supporting our entrepreneurs with capital and mentoring to build stellar businesses and products while fostering quality jobs in the State.
The VCA invests throughout Colorado. In addition to investing statewide, the VCA is currently participating in a fund investing in rural business. The new fund will have an emphasis on investing in business located in urban areas with higher unemployment and lower per capita income, but will not exclude businesses in other areas of the state. These urban areas were especially impacted by closings and loss of economic activity due to the COVID-19 pandemic, and we’re looking to create quality jobs and economic opportunity for residents of these areas. The VCA plans to leverage federal recovery funds that are targeted to urban underserved communities to capitalize this fund.
Plan for a new Colorado Diversity, Equity, and Inclusion Fund
Currently, we are focused on investing in business founders who are underrepresented. The VCA board is interested in improving capital access for women and minority-led businesses which only received 2.3 to 2.6% of venture capital investment in 2020. Fund managers and investors are more likely to invest in founders like them, so we’re looking for diversity – gender, race and ethnicity, disabilities – not only in founders, but those guiding the fund investments as well. That said, no one will be denied participation as a fund manager or portfolio company founder on the basis of their race or gender.
The VCA has capital and plans to leverage federal stimulus dollars to build out a $35 million fund.
The objectives for this fifth fund are as follows:
- Expand venture funding opportunities for Colorado’s high growth businesses ready for seed and early stage equity investments with a focus on businesses:
- founded or led by traditionally underrepresented entrepreneurs (including people of color, gender and gender identity, education and socioeconomic standing, and disabilities)
- founded or led by socially and economically disadvantaged individuals per Small Business Administration 8A programs
- committed to Diversity, Equity, and Inclusion (DEI) in their operations including hiring, communications, and procurement practices
- located and growing in economically distressed urban areas (i.e. Colorado urban enterprise zones) providing economic benefit to residents of these communities
- Focus on strengthening Colorado’s:
- economic diversity and resilience
- quality job opportunities including in the advanced industries sectors: advanced manufacturing, aerospace, bioscience, electronics, energy and natural resources, infrastructure engineering, technology and information
- Engaging a fund manager
- whose team exemplifies diversity
- has a successful investment track record
- has a history of, or plan for, investing in businesses with diverse founders and management teams
- has a plan for representing diverse investors
- has working relationships with organizations supporting underrepresented entrepreneurs that will support a pipeline of investment opportunities
- Earning a return on investment which will feed funds back into the evergreen VCA Enterprise Fund
Provide your feedback for the new investment fund plan
We request stakeholder input that will help us to further shape the fund objectives and identify partners and professional fund managers for a Request for Proposals for Potential Fund Managers (RFP) that we plan to publish by year-end.
Please submit this feedback form by the end of day on September 24.