Celebrating a big transition–and Energize Colorado’s next phase
In March, Energize Colorado kicked off its fourth year by celebrating its major impacts since launching in response to the COVID-19 crisis in 2020, and I announced my transition from CEO to Chair of the organization, effective April 1st.
From the very beginning, co-founder Brad Feld and I along with our fellow co-founders – Marc Nager, Erik Mitisek, Abram Sloss, and Eric Drummond – sought to unite Energize Colorado partners, volunteers, and board members. We also focused on building a dedicated Energize Colorado team to close significant gaps in support for Colorado’s small businesses.
The transition from CEO to Chair allows me to both focus on emerging economic development opportunities at federal and state levels, and it also supports Energize Colorado’s next phase of growth in service to the state’s underinvested in entrepreneurs and small businesses.
The Next Step: Community Development Financial Institution (CDFI) Certification
Over the last three years, Energize Colorado has sought to meaningfully address the nearly half-billion-dollar gap in small business funding in Colorado, particularly for women, BIPOC, veterans, and rural small business owners and entrepreneurs.
Our unique, data-driven approach resulted in Energize Colorado becoming Colorado’s newest and most efficient mechanism for deploying low-cost capital in tandem with dedicated assistance. To date, Energize Colorado has deployed $45M in grant and loan capital to more than 5,000 small business owners and entrepreneurs.
Through that process, it became clear that our state needs innovative ways to deploy capital to those who have been historically underserved. To best meet our mission of “creating a resilient and equitable small business ecosystem,” we decided that the organization should seek to become a certified Community Development Financial Institution (CDFI). Energize Colorado will make this transition over the next two years.
To best support this direction, I recommended to our Board that we seek a new CEO to guide the organization through the process of becoming a CDFI. In the meantime, Scott Romano, Energize Colorado’s Chief Operating Officer and the organization’s first employee (hired in September of 2020), will serve as interim CEO. Current Board Chair and co-founder Brad Feld will stay active on the board as Chair Emeritus, actively participating in selecting the next CEO.
As Chair, I will be focused on fundraising, leading the search committee for a new CEO, and supporting the team on a successful path as the organization seeks to achieve CDFI status.
Contributing to National Policy and Regional Innovation Hub Strategy
In my new role as Board Chair, I will support Energize Colorado’s mission by enhancing my involvement with other state and regional initiatives and federal programs supporting the entrepreneurial ecosystem in Colorado.
In the next phase of my work, I look forward to taking an active role in Colorado’s pursuit of the CHIPS Act Regional Innovation Hub strategy and continuing to serve on Governor Polis’ Revenue Estimation Advisory Council (GREAC). It is my continued goal to provide input to national policy and programs that will benefit Colorado entrepreneurs and beyond.
Highlights from the Energize Colorado 2022 Impact Report
As Energize Colorado wraps up 2022 (our third year of operation), I am excited to share highlights from our Impact Report. Supported by our partners, volunteers and board members, the Energize Colorado team has made significant progress toward building a more resilient ecosystem in Colorado by supporting small businesses, particularly those owned by the most underinvested in groups of entrepreneurs: women, rural, veterans, and BIPOC.
The numbers are impressive. Since Energize Colorado’s founding in March, 2020, we have:
supported 10,000 businesses through Energize Colorado programs
provided 5,000 businesses with $45M in grants and loans
engaged 650 volunteers
collaborated with 75+ partners in the promotion and delivery of first the Energize Community program
In 2022, Energize Colorado:
awarded $41 million in grants to 4,363 entrepreneurs across underinvested in communities
deployed more than $1.7 million in low-interest loan dollars to 92 entrepreneurs across the state
mentored 65 entrepreneurs in the 10-week Energize Community Accelerator
launched the Community Resource Compass, including 75 community resources
surveyed 14,000 small business owners for the Small Business Resiliency Index (SBRI)
Strength in Three Core Areas
In 2022, Energize Colorado shifted focus to strengthen capabilities in three core areas: capital deployment, ecosystem innovation, and research and insights. Energize Colorado now delivers capital through our new revolving loan fund, which expedites the time it takes from loan application to receiving funds. The Energize Community Program (ECP) is Energize Colorado’s fprogram that deploys funds through our revolving loan fund.
From the start, Energize Colorado focused on ecosystem innovation through leveraging the expertise of our team and volunteers to fill gaps within the small business ecosystem. This year, we identified two specific gaps: 1) the lack of a technical assistance resource directory, and 2) the challenges of capital absorption.
Research and insights set Energize Colorado apart from other lenders. The Small Business Resiliency Index (SBRI) has been incorporated with all of our capital programs. The SBRI is the first comprehensive index that tracks the impacts of society’s economic cycles on the Colorado small business ecosystem and the barriers small business owners face in building resiliency and inclusivity into their future growth. By measuring the resiliency of small businesses, business owners can better understand what to do to become more resilient in the event of the next economic downturn.
Looking Forward to 2023—and Beyond
We are excited to iterate on ECP and continue our mission of building a more resilient and equitable small business ecosystem in Colorado. We pride ourselves on being builders and innovators – this is our secret sauce – but none of it would work without the community of volunteers, partners, community leaders, elected officials, and generous supporters who believe in our mission to support the most underinvested in entrepreneurs in our state, as they are the bedrock of Colorado’s culture and prosperity.
In March, Energize Colorado turned two. As anyone on my team can tell you, I’m immensely proud of the work we have done and the impact we’ve delivered in those two years.
Little did I our volunteers know that some of our co-founders and board members were working behind the scenes to have the Governor’s Office recognize our second anniversary with this proclamation:
As we head into year three, Energize Colorado has ambitious plans to deepen its impact through the Energize Community Program, including funding readiness, a community accelerator, and a low-cost loan program for businesses in East Colfax, SW Denver, Pueblo, and the child care industry.
Reflecting on these two years, I see serving Colorado as a natural progression from my experience as CEO of Cintrifuse, the public-private partnership that built a thriving innovation ecosystem in SW Ohio. Leading Energize Colorado has deepened my insights about regional economic ecosystems, how they perform under stress (such as a pandemic), and what is required for businesses to thrive now. It has underscored for me the necessity of lifting small businesses in rural or historically marginalized communities now and in years to come.
Looking further back, I see that the entrepreneurial mindset I’ve learned to trust over the decades—one that embraces big vision while maintaining the flexibility to find the right people and the path to achieve that vision–has served Energize Colorado well. I’ve leaned into strengths in digital innovation as well as my delight in connecting generous people who want to give back with opportunities to do so. This gives me so much joy.
Moving forward, I know that this unprecedented time and experience in launching Energize Colorado has strengthened my resolve to build a sustainable organization, one that leads with understanding and respect for Colorado’s small business ecosystem and remains eager to do our part to connect and collaborate with all who share a mission to lift our state’s underserved businesses.
Which factors contribute most to business resiliency? To the resilience of innovation ecosystems and economies? It may surprise you to learn that the mindsets of people within the business are as predictive as use of technology or access to capital.
That’s the message of Theo Edmonds, JD, MHA, MFA, and Cameron Lister, MPH, co-founders of UPOP, a research firm that uses a data-based approach to look at “specific culture signals that reliably predict performance outcomes, employee wellbeing, and growth.” UPOP helps companies see cultural factors that point to resilience in their future.
Edmonds and Lister started UPOP as a research project within a National Science Foundation-sponsored research center in Louisville, Kentucky. In 2021, they moved operations to Denver and played a leading role in structuring Energize Colorado’s Small Business Resilience Index (SBRI), a tool we designed to help businesses and policy makers better understand Colorado’s current small business landscape.
SBRI Spotlights the Whole Human
The SBRI includes data from surveys sent to approximately 14,000 small business owners from Energize Colorado’s database. Incorporating Edmonds’ and Lister’s holistic approach to business health, the SBRI analyzes metrics of social capital with those of operational capital. More typical business metrics (operations and technology) are measured alongside those of hope, trust, and belonging—the “whole human.”
What do hope, trust, and belonging mean in business? Hope measures how businesses set goals for the future and find ways around barriers to success. Trust includes receiving guidance from the state and trusting state leadership. Belonging measures how owners feel the business and they belong in the broader community, crucial to shared success.
“What has surprised people most is that hope, trust, and belonging are so strongly predictive of success as opposed to operational metrics, like cash on hand, sales, profit, and so on,” says Lister.
The Challenge—and the Opportunity
The SBRI reveals opportunities to improve factors that contribute to resilience among Colorado’s small businesses. For example, during the last two years, a lack of timely and consistent information from all levels of government led many businesses to distrust the wide range of programs made available to them. That distrust further reduced their access to capital, technical assistance, and other resources that could have directly supported them and contributed to the state’s small business economic recovery. Trust was even further eroded among BIPOC and Veteran communities.
Many small businesses also lacked a strong future orientation (hope). Those with higher levels of optimism and adaptability fared far better in economic recovery.
“We’re used to thinking about business in linear processes,” says Edmonds. “Looking at people and businesses—at innovation ecosystems—in that way is no longer serving most of us by any data measure. Research has clearly shown that hope, belonging, and trust are predictive of how willing or not willing people are to engage, to create social capital, to utilize resources offered to them, all of which contributes to business resilience.”
The Future: Culturally Responsive Economies
The SBRI provides an efficient way to identify the earliest signals of where the economic and business market may be going, and how to unlock the dormant capacity of diverse entrepreneurs to build those markets. “What we’ve done over the last several years is essentially find a Rosetta stone for understanding different types of groups that allows us to understand where people might fall within resilience and innovation,” says Edmonds.
When state economic leaders address cultural factors, explains Lister, “not only will you solve economic issues and problems, but at the same time, you’ll solve human issues and problems, which will provide more resiliency in the face of challenges in the future.”
“Let’s get state and local leaders to understand the role hope, trust, and belonging have on economic development” says Lister. “Let’s take the measures to start figuring out culturally responsive approaches to solving system problems that impact our economy.”
As Energize Colorado nears yet another milestone—entering its third year in March 2022–I’m pleased to share that Kaiser Permanente has made a $1 million contribution to Energize Colorado’s Gap Fund. Since 2020, the Gap Fund has deployed nearly $27M directly to small businesses in the forms of grants and low-interest loans. Philanthropic enterprises like Kaiser Permanente are taking note, recognizing the value of contributing to efforts that reach the businesses and communities most in need.
“In the midst of the COVID-19 pandemic, community-based organizations are creating ways to serve businesses and community members,” says Stephanie Ledesma, interim senior vice president of community health programs for Kaiser Permanente. “Awarding grants to these organizations furthers our shared commitment to inclusive economic growth, which builds upon our long-standing commitment to supporting the social needs of our members and communities.” With the support of Kaiser Permanente and its leaders, especially Mena Yaft who serves on the Gap Fund Executive Committee, Energize Colorado has been able to help businesses bridge a gap during an unprecedented time.
In addition to supporting small businesses directly through the Gap Fund, grant money received from Kaiser Permanente will help us execute our new Square Mile Program. The Square Mile Program aims to improve the economic outcomes in underserved communities in the Pueblo, Southwest Denver, and East Colfax corridor areas, as well as in the childcare provider industry. The intent is to meet small businesses owners where they are, helping them prepare to with loan readiness and providing business advising and technical assistance while creating a community cohort of businesses that support one another. The Square Mile strategy is a top initiative for 2022. Read more about the Square Mile Program in Kaiser Permanente’s recent article.
Join me in congratulating the Energize Colorado team and in thanking Kaiser Permanente for its support.
In the wake of COVID-19, which factors have contributed most to the economic resilience of Colorado’s small businesses? As the state looks toward recovery, how are our underserved small businesses faring? The team at Energize Colorado and I were eager to know.
With a green light from the State of Colorado, I set to work forming a diverse and creative group of economists, public health experts, and business leaders to answer those questions. The Energize Colorado team and I collaborated with CU Leeds School of Business, McKinsey & Co., and Underestimated People of Purpose to create the first comprehensive index tracking the COVID-19 pandemic’s impacts on the Colorado small business economy.
The Small Business Resilience Index (SBRI) is a culturally responsive dataset that includes social capital as well as business capital, critical factors for resilience. We analyzed 750 responses from surveys sent to 14,000 small business owners in Energize Colorado’s database, measuring the correlation between the SBRI, demographics, and overall business performance in order to understand predictors of small business resilience. We included measures of social capital—hope, trust, and belonging. How were small business owners, the individuals who matter most to the success of the business, coping?
The SBRI data point to common barriers small businesses face, including access to capital, which disproportionately impacts businesses with net revenue under $500,000 per year. Because of this and other factors, Colorado’s smaller businesses continue to lag in recovery.
Key Findings of the SBRI
82% of respondents said the 2020 pandemic and lockdowns had hurt their businesses, and 46.5% of businesses said they believed they would not be able to continue to operate if another lockdown happened today.
We estimate that small businesses in Colorado making under $500K/year in revenue lost an estimated 7.5 to 8.2 billion dollars in profit over 2020, equal to 2.3% of Colorado’s total GDP or a 160% of the state’s total GDP loss alone last year.
These businesses struggled to access relief funds as well.
Those making more than $500k in revenue performed significantly better.
36.0% reported a >15% decrease in profit last year, compared to 8.0% reporting a >15% increase.
“Trust” in local and state governments from small business owners scored the lowest (getting a 56 out of 100 possible).
The greatest contributor to low trust scores, in addition to difficulty receiving recovery funds/loans, was a lack of timely consistent information about economic conditions and policy changes.
Companies that were more adaptable to new technology and its uses performed significantly better than companies that did not focus on these areas.
Educational attainment is significantly related to technological adoption and goal-setting/KPIs.
A Culturally Responsive Index
Cultural responsiveness is the ability to learn from and relate respectfully with diverse groups of people. The SBRI looks at the dormant capacities of diverse entrepreneurs to build markets, and Energize Colorado’s culturally responsive approach to using quantifiable data science to find these early signals supports the growth of the Colorado business community.
It’s our vision that, by quantifiably measuring the small business ecosystem, the SBRI will be a guiding light for future program development for Energize Colorado as well as a tool to help small businesses access specific resources to improve their resilience. To that end, we have presented the data to state economists and will be sharing our insights with Colorado’s small businesses in the first quarter of 2022.
Each small business that responded to the survey will receive a specific report that includes a resilience score and actionable insights, plus connections to resources across the state that can help bolster their resilience. We are also planning small educational events to teach businesses about the vectors of resilience that are unique to our findings. Although we can’t predict when the next downturn will happen, it’s our hope that the SBRI will help businesses when that time comes, that with these insights they’ll be stronger and they’ll navigate better.
Which macro trends are driving changes in Colorado’s small business economy? And what do those trends look like at the ground level? These are some of the key questions that Colorado Governor Jared Polis asks of the economists and business leaders who serve on the state’s Revenue Estimating Advisory Committee (GREAC).
I’m honored to announce my appointment to GREAC as of October 2021. Housed under the Governor’s Office of Planning and Budgeting, the committee is led by Luke Teater (Chief Economist, Governor’s Office) and Lauren Larson (Director, Governor’s Office of State Planning and Budgeting). I’m delighted to serve alongside Energize Colorado’s Brian Lewandowski, Executive Director of Business Research at CU Boulder, as well.
I look forward to joining these and other outstanding committee members and to contributing insights gleaned from the 20-plus months I’ve led Energize Colorado. It’s my hope that what I’ve learned in serving Colorado’s small business community—particularly rural-, minority-, women-, and veteran-owned businesses—will help economists not only predict revenue, but influence policies and programs that can bolster Colorado’s small businesses over the long term.
On March 24, 2021, Energize Colorado officially marked its one-year anniversary as an organization powered by inspired innovators, all working together to build a resilience and equitable small business ecosystem.
As we were putting the final touches together for our one-year celebration another crisis was occurring just a few miles from my home in Boulder, Colorado. A gunman killed 10 innocent people in a grocery store. Shaken and overwhelmed, I was doing my best to process it all on the morning of March 24th as our community of volunteers gathered with our co-founder and Chair Brad Feld to reflect on our wild and crazy first year.
To mark our one-year anniversary, our partners and volunteers shared personal stories and we reviewed our impacts across Colorado’s diverse small-business community. Our Gap Fund efforts alone provided $26M to over 2,000 businesses across Colorado, 97% of which belong to underserved communities.
Coloradans helping Coloradans
As I reflect on year one, I carry deep respect and immense gratitude for the hundreds of volunteers who came forward to listen, learn, build, execute, and iterate our programs (all in record time) to help small businesses navigate economic upheaval triggered by COVID-19. As Aaron Clark of Justice Reskill reflected, “Energize Colorado has been resilient in learning and moving forward and helping the people who need it most.”
Our volunteers—“Coloradans helping Coloradans”—never wavered. As Marc Nager of the Greater Colorado Venture Fund said, “What a shining example of bottom-up leadership. To go out and listen and understand first and foremost.” “The mindset was: We don’t know what’s happening next. But we’re going to fight for what we want and we’re not going to do it alone,” said Jesus Salazar of Prosono.
A few of my top learnings from year one
#1 The significant role the small business sector plays in Colorado’s economic viability.
#2 The experience and expertise of a range of entities across Colorado that are dedicated to supporting small businesses, including small business development centers, community development financial institutions, technical assistance organizations, entrepreneur support organizations, workforce development councils, and economic development organizations.
#3 The learning required for me to understand my own equity journey so I can be a culturally responsive and inclusive leader for Energize Colorado.
The power of building a state-wide volunteer model that delivered consistent impact
Above all, though, I’m particularly mindful of the new lifelong relationships I’ve created (virtually) across the State. The people I’ve met along the way have gracefully taken me “under their wing” as we built and iterated our strategy and structure to drive towards a more resilient and equitable future economy.
As Chris Erickson of Range Ventures reflected during our anniversary gathering, the people and partners working together through Energize Colorado helped us have “a significant impact across the state, really quickly. It’s incredibly unique for a state to have people and organizations that are willing to volunteer their time to have impact.” Yes, I’m mighty grateful for our volunteers, and I am eager to collaborate with our community and our ecosystem partners to map out the next phase of our contribution to Colorado’s small business economy.
As Energize Colorado passes its one-year mark, I am proud that our efforts—our model, our comprehensive statewide strategy, and our successful approach—have gained national recognition. In a recent analysis by Brookings Institute, “Overcoming Bias in Small Business Relief in Colorado,” authors outline the Energize Colorado Gap Fund’s successful approach to serving Colorado’s sizable small-business community—particularly rural, black, hispanic, women, and veteran-owned businesses.
Our model and our approach to overcoming bias in small-business relief funding included three keys areas:
1. Comprehensive outreach efforts designed to engage small businesses in underrepresented communities that are typically less connected to technical assistance and capital access.
3. We centralized the application process through our website and partnered with the Colorado Housing and Finance Authority (CHFA), and a network of community development financial institutions (CDFIs), and other nonprofit lenders across the state to successfully underwrite and deliver funds to businesses who often times do not have relationships with traditional banking institutions.
To date, Energize Colorado has given $26M in funds to over 2,000 businesses across Colorado. 97% of our Cares Act funding went to priority groups. As the Brookings piece highlights, 80% of recipients were women-owned entities, 37% were rural entities, 24% were Latino- or Hispanic-owned enterprises, and 16% were Black-owned enterprises.
It is my hope that Energize Colorado’s approach and our learnings can inspire and inform other efforts to serve diverse small businesses across the U.S.
In the summer of 2014, while serving as the CEO of Cintrifuse in Cincinnati, I met Steve Case and the Rise of the Rest team when they visited Cincinnati on their bus tour. Launched in 2014 to promote investment in ecosystems and startups outside of Silicon Valley, Rise of the Rest has now “raised $300 Million to invest in early stage startups across America — startups that we believe will be successful at driving local economies by yielding successful returns for investors.”
Our regional Cincinnati startup ecosystem had been growing through the efforts of entrepreneurial ecosystem support organizations The Brandery and CincyTech, as well as Cintrifuse. During the Rise of the Rest visit, top-tier startups presented to a panel of investors and entrepreneurs, including Steve, and the winning startup received a $100K investment. A fun first experience with Steve and his Rise of the Rest team—and the beginning of an important collaboration!
Since then, I have been honored to accompany them on several Rise of the Rest tours (I’ll always remember Green Bay, WI!) and to participate in several annual meetings with Rise of the Rest portfolio companies in Chicago and Washington, DC. I have gotten to know the amazing Rise of the Rest team—Anna Mason, Mark Rucci, and now Jamie Rodota—and as part of their Expert Mentor Network, I have worked with and learned from many outstanding founders across the Midwest.
2021 Playbook: Supporting Startups Through COVID-19
Rise of the Rest’s support of startups hasn’t wavered through this global pandemic. In January, they published a series of case studies, Responses to COVID-19: How Cities Across America are Supporting Startups, that includes a look into Energize Colorado’s successful model, highlighting three primary areas: funding, navigation, and founder support. What the report points out has been true: “While the pandemic has wrought extraordinary public health and financial hardships, it will accelerate innovations in critical industries.”
Now approaching the one-year mark, Energize Colorado’s tested model is now ripe for replication in other regions or at national scale. As I share in the report: “Energize Colorado was designed in such a way that it’s a blueprint which can be adopted by others. We are in active discussions with multiple states, and envision a future where there’s an Energize America effort. There are the tactical elements that others can implement: funding, mentorship, mental health support, and reopening guidance. Each of these products can then be adapted to serve different types of organizations, from startups to nonprofits, in both urban and rural settings.”
