Today, the Colorado Venture Capital Authority (VCA), and the Colorado Office of Economic Development and International Trade (OEDIT) announced that the VCA has partnered with New Community Transformation Fund-Denver (NCTF-Denver) to expand more equitable access to venture capital for Colorado entrepreneurs and startup businesses. The VCA has committed $5 million to NCTF-Denver in the first closing round for the fund, which is the first Colorado-based venture capital firm that is Black-owned and Black woman-led.
“As a businessperson, I know what it’s like to build something from the ground up, which is why I’m proud that this exciting partnership boosts entrepreneurship and innovation in Colorado. We are continuing to support entrepreneurs to grow and diversify Colorado’s strong economy, as we build an economy that works for all. Congratulations to New Community Transformation Fund-Denver and its partners on this exciting step,” said Gov. Jared Polis.
Former Colorado Trust Chief Financial Officer Danielle Shoots launched NCTF-Denver in 2022 with a focus on investing in startups and scaleups owned and/or operated by business leaders of color. The fund will focus on scalable early to mid-stage businesses as well as transitioning succession companies in the information technology, advanced manufacturing, food and agribusiness, biosciences, health/beauty/wellness, tourism, and aerospace industries.
“We understand that great investments recognize undervalued, underleveraged, emerging markets, and founders of color often fit that bill,” said Shoots. “We’re honored to be recognized and supported by the State of Colorado and the Venture Capital Authority, who share our vision for a more equitable economy and our commitment to making venture capital available to founders who experience barriers to funding.”
In 2021, Colorado ranked seventh in the nation for both the total number of venture capital deals and the total amount of capital invested in those deals. That represented an increase of 220% in venture capital funding over 2020. While venture investing has been robust, the 2021 growth is influenced by several large deals. Securing investments for seed and early-stage deals remains challenging. Additionally, national statistics reveal that minority and women-led businesses have received less than 3% of venture capital investments. By identifying partners like NCTF-Denver, the VCA is working to create more equitable access to these important sources of capital.
“In 2021, venture capital funding in Colorado shattered previous records, and we want to see more Coloradans benefit from that growth. The Venture Capital Authority partners with professional fund managers who share our mission to fill gaps in our state’s venture capital market, and New Community Transformation Fund-Denver will be a key partner in expanding access to funding. We are thrilled to support their historic launch while also making venture capital more widely available to Colorado entrepreneurs,” said Thea Chase, Chair of the VCA Board of Directors.
“Through our historic public-private partnerships, the Venture Capital Authority is supporting economic equity by helping to make Colorado a leader in expanding access to venture capital for underrepresented entrepreneurs and startup founders,” said Nikhil Mankekar, Vice-Chair of the VCA Board of Directors.
The VCA investment in NCTF-Denver is funded through the State Small Business Credit Initiative (SSBCI) awarded to the State of Colorado by the U.S. Treasury Department in August. SSBCI is focused on expanding access to capital for businesses with less than 10 employees and to businesses led by individuals that identify as coming from under-resourced communities and geographies.
Of the initial $31 million of SSBCI funding received by the State, more than $19 million was directed to the VCA for the purpose of establishing new partnerships with venture capital firms that focus on companies located in Colorado Enterprise Zones and expand access to capital in Colorado. Over the next 5+ years, Colorado could receive approximately $104 million in SSBCI funding, with over $59 million going to the VCA.
“As a state, we have committed to catalyzing private investment in Colorado companies because we know that it leads to economic growth and quality jobs,” said OEDIT Executive Director Patrick Meyers. “Through the Venture Capital Authority, we are able to promote equity in investing across the state and to diverse founders. This first-of-its-kind partnership strengthens those commitments and the Colorado communities where these companies put down roots.”
The VCA expects to announce three additional limited partnerships that also focus on under-resourced communities and geographies within the next few months. By leveraging private capital and equity investments to fuel new businesses, these new partnerships are collectively projected to create or retain 2,900 jobs over the next 10 years.