#StartupsEverywhere Profile: Mike Freeman, CEO of Innosphere
This profile is part of #StartupsEverywhere, an ongoing series highlighting startup leaders in ecosystems across the country. This interview has been edited for length, content, and clarity.
Fort Collins, Colorado is the fifth best performing startup community in the country, despite—or maybe in part because of—it’s small size. For this week’s #StartupsEverywhere, we talked to local Mike Freeman, who attributes the area’s success to being jump started by the local government and close-knit public-private collaboration, and who would like to see an increased focus on expanding access to capital and a boost to the state’s grant program.
Can you tell us about Innosphere and the work it does in Colorado?
Innosphere’s headquarters is in Fort Collins, but we also have offices in Boulder and Denver, as well as programming that runs throughout the entire state. We work with startup and scaleup B2B businesses in the science and technology industry -- mostly biosciences, digital health, energy, water, transportation, hardware and software -- by supporting entrepreneurs, most typically technical founders who may or may not have any prior business or startup experience. We provide them with all of the support they need in the first couple of years, including support to secure the first rounds of capital.
At Innosphere, we define startup success as having achieved a million dollars in recurring revenue and securing first rounds of funding. For companies we think are very promising, we will push them into our scaleup program, where they hopefully achieve three to five million dollars in recurring revenue relatively quickly.
How did you get involved with startups and when did you begin working with Innosphere?
My background is a public-private mix, with a strong emphasis on one of the things that is core to Innosphere’s mission: technology-based economic development. My past work, which was mostly in Colorado and Oregon, was focused on supporting entrepreneurship growth, job creation, and capital formation. This really helped prepare me for my time at this organization because these are the same outcomes that we seek here, in addition to supporting companies and helping them to achieve their business metrics.
I began working with Innosphere in 2006, first serving as the Chair of the Board for five years and now almost six years as the CEO. Innosphere reaches 20 years of being in business this year and we are looking forward to serving Colorado for another 20.
What’s the most exciting thing to happen for the Fort Collins startup community recently?
Fort Collins continues to defy the odds. Our population is only around 160,000, but we are consistently identified as one of the “best performing startup communities” by the Milken Institute. Last year, the city moved up three places in the rankings bringing us to fifth place in the country. Clearly, something is really working here, and I think its due to the fact that we are a relatively small community, which makes it a lot easier to collaborate and coordinate between the public and private sectors.
It also is worth mentioning how fortunate we are in Fort Collins to have Colorado State University, a major research university, nearby. CSU has two research facilities which Innosphere collaborates with; one is for advanced biology and chemistry startups called the Research Innovation Center and the second is the Energy Institute. Between all of us, we can support virtually any science and technology-based startup that comes our way. These resources are part of our “secret sauce” and why we consistently appear at the top of important rankings.
What are some of the challenges that startups face in Fort Collins?
As a smaller community, connecting capital with startups is a challenging issue. Innosphere recently launched a venture capital fund and we are the only VC in Northern Colorado. While people generally lament the lack of access to capital here, the reality is that companies are raising money from all over the place, so I don’t really see that as too much of a barrier.
I think our talent pool can also be an issue at times. Population-wise, we’re a lot smaller than some of the other cities that we compete with nationally so ultimately the companies we support rely on the Denver and Boulder markets for talent.
What are some of the inputs that have allowed your ecosystem to grow?
The efforts of the public sector around technology and entrepreneurship have been critical. Colorado State University, as well as the cities of Loveland and Fort Collins, have been essential partners for Innosphere over the years by providing sustainable funding and consistently sticking with their strategies around pursuing technology-based economic development. Innosphere is written into the economic development plan of the city of Fort Collins and we see board-level and strategic support from local government in every city that we work in.
Can you tell us more about how your formed this partnerships with the government?
The city of Fort Collins has been with Innosphere since day one, a partnership that has lasted 20 years at this point. In the run up to the “burst of the .com bubble,” a significant number of tech employees found themselves beginning to be displaced for variety of displaced reasons in northern Colorado. Many of employees went to the city and expressed their desire to stay in the area and utilize their decades of technical expertise to build new companies. As a result, the city came up with the idea of creating a support system for these individuals and the companies they were building. The city provided the first office space for Innosphere and the first seed funding (they are still a major funder today).
What is the role of government representatives and Members of Congress in your ecosystem?
We’re a nonprofit so we stay out of the political arena out of necessity. That being said, our congressional delegation has been incredibly supportive of Innosphere. Because all net new job creation happens in small companies in the United States, our legislators understand that our work helps to ensure small business growth and economic sustainability.
Do you have any items on your policy wishlist?
If you’re not in Massachusetts, New York, or California, where about 75 percent of all venture capital is concentrated, you’re going to struggle to access capital. I would love for the state of Colorado to triple its Advanced Industry Grant Program. The program provides a grant for $250,000 if a company is able to bring $500,000 in private funding to the table. While this may not sound like much, a lot of companies have been successful with these grants, but they do run out quickly. As much as I wish we could do expand things like this in Colorado, I also know that there are a lot of competing budget priorities.
What are some startups to watch coming out of Fort Collins?
Some of the companies getting a lot buzz around town are:
St. Renatus, who is improving the dental anesthesia experience with needle-free technology;
SuperTurbo Technologies, who has developed a super turbo charger for diesel engines based on NASA technology that dramatically improves fuel efficiency; and
KromaTiD, a company that has developed advanced diagnostics for cancer, particularly lung cancer.