University of Colorado at Colorado Springs finance professor Tom Duening has launched a program designed to help startups in sports and health grow from adolescence to adulthood. (Video by Wayne Heilman)
A University of Colorado at Colorado Springs professor has launched a program designed to help startups in sports and health grow from adolescence to adulthood.
Called the El Pomar Institute of Innovation and Commercialization (EPIIC) Venture Attractor, the program is designed to attract startups to Colorado Springs by helping them grow from an entrepreneur’s idea to a point where they are generating revenue, hiring employees and are ready for outside investors. The program began last month with eight companies, including six from the Springs area. EPIIC is a UCCS initiative that helps entrepreneurs and organizations develop new ideas and products.
“When you get to a $1 million valuation, you are barking with the big dogs” of startups, said Tom Duening, the El Pomar chair (a faculty position funded by an El Pomar foundation grant) of business and entrepreneurship at UCCS and founder of the venture attractor. “At that point, you are generating revenue and can support outside investment without excessive dilution (reduction in ownership stake) for the founder.”
For Jett Johnson and his LeadFoot Racing, that means expanding from designing a small racing car he calls the “Little Dipper” to producing up to 15 kits a week that consumers can buy for $12,000 and assemble the vehicle after buying their own motorcycle engine. He came up with the idea for the company in 2018 and qualified to develop it into a business as part of The Garage at UCCS, an on-campus student venture laboratory, before he graduated with an engineering degree in 2019. Johnson turned the idea into a business in September.
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“I came to him (Duening) with the idea of building an affordable racing car. But in engineering, we are taught to build things, not companies. He told me I definitely could build a business around that idea,” Johnson said. “I want this to be as easy as possible (for the customer). I am not planning to be a leader in the race car industry. I just want to get people who want to race off the streets and onto the (race) track.”
Johnson said the Garage program helped him learn about finance and writing a business plan, but he needed to learn more to build a successful business. Through the venture attractor program, he will spend the next six months taking weekly online lessons on everything from product development and marketing to hiring and seeking financing. Then, in late October, he’ll pitch investors during a “demo day” event.
“I thought I would spend about an hour a week watching the video (lessons), but that turned into six or eight hours a week of watching and reviewing the lessons and doing the homework” for each lesson, Johnson said. He has already learned that getting a few of the kits sold to customers to spread the word about the Little Dipper is more important than waiting until the next redesign is finished.
Duening is hoping that kind of help will draw startups and entrepreneurs in the sports and outdoors, health innovation and human performance sectors to the Colorado Springs area. While the program started virtually last month, he hopes the venture attractor eventually will have its own building where it could host up to 20 companies twice a year plus other events for startups in the targeted sectors.
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“We want to attract some of these companies and people to our community and establish a portfolio of services to better provide support to both local companies in these industries and companies that would relocate here,” Duening said. “Our mission is to make Colorado Springs a worldwide destination for companies in the sports/outdoor, health innovation and human performance cluster.”
Duening has spent his entire 28-year academic career researching the role of startups play in building clusters of industries to fuel economic development. After founding two companies that were later acquired, serving as the assistant dean at the University of Houston business school and starting a angel investor fund for startups while at Arizona State University, he came to UCCS in 2009 for the El Pomar-funded faculty chair and to head its Center for Entrepreneurship.
“This (industry clusters) has been a lifelong pursuit of mine — it is a key to economic development,” Duening said. “Since I came here 12 years ago, I have always believed that building a cluster would succeed here. All of the projects I have been involved with have the same goal — to attract people, resources and ventures to this area. The mission has always been the same — to be a driver of economic development for this community.”
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The venture attractor grew out of an idea Duening had developed to attract startups to the Colorado Springs area — a sports and outdoors business plan competition that offered cash prizes totaling more than $25,000, starting in 2011 and continuing for several years. The competition attracted several successful companies, including is first winner — Boston-based running clothing firm Janji — but none of the winners ever relocated to the Springs, he said.
The program is modeled after Arch Grants, a 9-year-old startup competition that offers $50,000 grants to companies to move their headquarters or most of the management team to the St. Louis area. Duening had planned to offer similar grants but the COVID-19 pandemic made raising funds for the grants nearly impossible, so the program was restructured as a pilot to instead offer a variety of support to startups to get them to move to Colorado Springs.
Duening said the program won’t compete with outer startup facilities and initiatives in the Colorado Springs area, such as the Catalyst Campus for Technology and Innovation near downtown, which focuses on aerospace and defense startups, and the Exponential Impact Accelerator and related programs for emerging technology startups at the National Cybersecurity Center near the UCCS campus. That’s because the venture attractor is targeted at companies still in the earliest stages to get them ready to join an accelerator program.
“Only 4% of the companies that apply actually get into accelerators; the other 96% don’t (get in) but could benefit from the support we offer,” Duening said. “This will help the companies in our program tell their story about their ability to scale the business and makes them more valuable to investors. Will they all make it? Probably not, but they will have the foundation they need to do so.”
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Besides the 24 weeks of lessons, the attractor also will offer each company a mentor, a peer group forum for companies to meet for discussion, feedback and collaboration, and a monthly forum to pitch what progress they are making toward goals and milestones. While companies don’t have to be incorporated to be selected, they must have moved beyond the idea stage and have a prototype or viable product and have growth potential and plans. The attractor doesn’t invest or require an ownership stake in participating companies and instead charges $2,900, which is discounted $300 for University of Colorado alumni, students, staff, faculty and instructors at any campus.
Shawna Lippert, the attractor’s program director, is working with the Colorado Springs Chamber & EDC to come up with relocation packages for startups in the program. She also is working on ways fir UCCS students to work with the companies in the program as interns or, after graduation, as employees.
The attractor’s Scale to $1 million program sought applications form mid-January to mid-March and received interest from 43 companies, with 23 completing the application process, including firms from Turkey and Russia. A committee of UCCS students evaluated and provided written reviews of each applicant and a second panel of experienced entrepreneurs reviewed the student committee’s work to select eight participants that started in the program May 3.
Besides LeadFoot Racing, the seven other companies include:
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• Momentum Training Center, a Colorado Springs gym for post-rehabilitation exercise treatment for injuries that also offers safe and effective personal training programs designed to improve overall health. Owner Ian Merrin formerly worked at Lifetime Fitness and started the center in 2019 to offer medically prescribed exercise for pain and physical limitations. Merrin hopes to grow the company to two locations, each with three trainers offering the same services.
• Altitude Ninja Gym, a Colorado Springs facility for ninja-style, obstacle-based competitions, training, classes and special events. Michelle Freddolino, a special education and gifted student teacher, started the company in 2019. She wants the gym to be a training site for athletes in ninja competitions and host local, regional and national competitions. Freddolino eventually wants to franchise the business to multiple locations.
• Defender Imports, a Colorado Springs company started in 2019 by John Rubley that specializes in importing and restoring classic Land Rover Defender vehicles. Former Army special forces soldier Rubley wants to expand the company by moving from a shared location to its own shop, hire employees and sell more vehicles.
• EZHNT, a Colorado Springs company, is developing an mobile application that allows private landowners to rent their land to hunters, anglers and trappers. Zachary Galindo started the company in September after leaving the Army when had trouble finding private land on which to hunt. He hopes to have the app available by early 2022.
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• Neuroathlete Clinic, a Monument medical clinic started by Dr. Grove Higgins in 2015 to offer chiropractic care, exercise therapy and performance training, massage therapy and performance psychology. The clinic is looking at ways of expanding its offerings virtually and conducting more educational sessions for professionals.
• Local Energy, a Boulder company started by John Eckhardt that wants to develop an online system for growers and other food providers to connect with customers to promote and sell healthy locally produced small batches of food.
• Globbr Co. Foundry, a Lagos, Nigeria, company owned by Prudence Ogatcha that produces sports apparel and physical education programs for schools in Nigeria and eventually wants to expand throughout Africa.
