Boulder Ventures, a venture capital firm that targets startups in Colorado and the mid-Atlantic region, closed a $58 million fund this month to deploy over the next few years.
This is the eighth fund for the firm, which started in 1996 to focus on startups in the Front Range and around Washington, D.C. — two regions with burgeoning startup ecosystems in the 1990s. Though those ecosystems have grown in the 26 years since the firm's founding, Boulder Ventures still considers them underserved when compared to startup hubs like Silicon Valley, New York and Boston.
"There's a whole underserved piece of the market, both economically speaking and also geographically speaking, and that's what Boulder Ventures has always played in, in those two geographies," said Kishen Mangat, a general partner at the firm. "Both of those markets are second-tier venture markets that have two principal characteristics that we think are beneficial: superior economics and a close-knit founder and investor community."
Kyle Lefkoff, the founder of Boulder Ventures, focuses on life sciences — a sector that accounts for about a quarter of the firm's investments. The other general partners target software startups. Mangat, the firm's newest general partner, has a special focus on 5G.
The firm's eighth fund is the first that Mangat has handled as a general partner. His affiliation with Boulder Ventures began when the firm funded his startup, BroadHop Inc., which provided policy control and service management technology for carrier networks. Cisco Systems acquired Broadhop in 2013, and Mangat joined Cisco as a vice president. There, he led multiple technology and business-model transitions and led Cisco's 5G business development.
Before joining Boulder Ventures as a general partner, Mangat participated as a limited partner in the firm. His experience with the firm, as a founder, then limited partner and general partner, is a cycle that Boulder Ventures would like to repeat, Mangat said.
"Our investor base, it's not transactional. We view our limited partners as ... real partners in this business and in this fund," Mangat said. "My story is typical, where Boulder Ventures will invest in a company, and the founders will have a successful exit. And then the founders will typically become limited partners in the fund and then help drive deal flow and pipeline opportunities in their areas of expertise."
Boulder Ventures invests solely in Series A rounds, with investments of between $1 million to $5 million. The firm likes to come into a company once it has proved out its product or technology but hasn't scaled its business, Mangat said.
"That's the point we come in as professional investors and try to help these companies go from a proven product to a proven business," he said.
The firm is looking to make 10 to 12 investments over the next few years, or about three to four per year. Rather than making a lot of small bets across many startups, Boulder Ventures aims to nab the one to three best deals in Colorado every year, Mangat said.
The firm plans to do that by using its deep roots in the areas in which it invests.
"When you're operating in a smaller ecosystem like Colorado, the relationships and knowing what's happening on the ground is really, really important," Mangat said. "The way that you get that premium deal flow is by having your your sensors and feelers out in the market."
