Founders across the nation are having a hard time raising capital this year due to inflation rates, bank failures, global instability and an increase in the number of companies looking for venture capital backing.
The number of VC deals raised by U.S. businesses in the first half of the year was down compared to the first half of 2022, as was the amount of VC dollars going to these companies, according to recent PitchBook data.
Two Colorado-based investors believe their new online pitching platform and database, Pitch Colorado, can make it easier for founders to find active investors and get the capital they need.
Mat Vogels, a partner at VC firm Julian Capital and serial entrepreneur, and Natty Zola, a partner at Matchstick Ventures and former managing director of Techstars Boulder, launched Pitch Colorado on Sept. 18. They spent the last month building Pitch Colorado to more easily connect VC investors and startup founders.
On Pitch Colorado, local founders can pitch their startups to 15 Colorado-based investors at the same time.
“At the end of the day our goal is to help startups access capital faster and easier and, frankly, help investors find great startups faster and easier, and I think this could be a really powerful platform for doing that in the region,” Zola told Colorado Inno.
Here’s how it works. Founders create a free account and submit a pitch by answering a series of questions about the startup and themselves. This pitch is then sent to all 15 investors on the Pitch Colorado platform, including Vogels, Zola and partners at SpringTime Ventures, Range Ventures, Foundry, the Greater Colorado Venture Fund, and Kickstart.
These investors look at each pitch and individually decide if they want to contact the founder to continue discussions about investment opportunities.
“We want to have local investors investing in local startups,” Zola said. “I think that’s what creates a really healthy ecosystem.”
Submitting a pitch does not guarantee that a founder will receive capital, however. Pitch Colorado is a tool to make it easier for founders and investors to connect, something that’s traditionally been hard to do.
“There’s a lot of inequity in startup land where people don’t have a network of people who can invest in them, or historically, VCs have been kind of hard to find,” Zola said. “And we think that we need to flip that on its head and we all should be easy to find and make sure that startups all have equal access to the capital in the region.”
Since launching at the beginning of Denver Startup Week just four days ago, Pitch Colorado has received more than 50 pitches, Vogels said.
Given the high volume of pitches already submitted, the reality is the majority of startups may not hear back from investors, Zola said. However, Pitch Colorado’s goal is to provide high-level feedback.
About three weeks after a pitch is submitted, the platform will send an email to the founder with some reasons as to why an investor didn’t reach out. These reasons are submitted by investors and vary from lack of traction to the startup’s valuation being too high.
“The odds [of raising capital] are still really tough,” Vogels said. “The unfortunate reality is the vast majority of startups shouldn’t be raising money ... so it’s not even a preference on some things. A lot of businesses just aren’t venture-backable businesses, and it’s tough to know that when you’re a fundraising founder.”
A venture-backable business, according to Zola and Vogels, is one that can generate $100 million in revenue and is led by a founder who wants to reach that goal. (When pitching, Vogels said it’s important for a founder to clearly show a roadmap as to how the company plans to hit that revenue milestone.)
If a founder doesn’t hear back from an investor on Pitch Colorado, Zola encourages them to keep building their startup and reach out to other investors on the platform. It may take two or three touchpoints to get in contact with an investor, he said.
Through Pitch Colorado, founders also have access to a database of local investors and funds, which can be filtered by average check size, round types and more. There are at least 83 active funds currently listed on Pitch Colorado, Vogels said.
The platform is currently geared toward venture-scale startups looking to raise pre-seed to Series A rounds because those are the types of funds and investors on Pitch Colorado.
Pitch Colorado isn’t the only platform operating as a centralized network of investors. Earlier this year, Vogels also helped start Seed Checks, a similar concept that focuses on seed rounds across the globe with an emphasis on U.S.-based startups.
Although Pitch Colorado just launched, Zola and Vogels are already talking about ways to scale the platform. Ideas being tossed around include building out individual investor profiles on the database, adding angel investors and expanding to include Series B-stage investors.
Pitch Colorado also plans to host quarterly live pitch events with four to six startups and a larger network of investors. Details for this event are in the works, but it is slated to take place in Q1 2024.
