FORT COLLINS - The Rocky Mountain Innovation Initiative is moving forward on two of the biggest hurdles for the region's technology startups - facilities and funding.

The organization is preparing to launch a new model to connect local startups to angel investors. At the same time, a volunteer committee is preparing its proposal to the RMI2 board to lay out plans for a new facility just north of downtown Fort Collins.

Despite the best efforts of local groups, Northern Colorado has yet to form a lasting, successful network of angel investors to provide early-stage funding. Several attempts to create an event-centric network did not take off.

Brad Florin, investor and entrepreneur, has been in the loop on several attempts at developing an angel network in the region.

"It's been a challenge because we're not as big as Denver or Boulder in terms of an angel network," he said.

CTEK successfully launched a Denver angel network in 2003, but an attempt to copy the model in Northern Colorado was not as fruitful.

Previous attempts in the region usually included trying to gather investors with potential deals about once a quarter and were rather informal. The issue is that the meetings were just not timely enough, and it was difficult to coordinate the calendars of the investors.

"It's a busy, dynamic group," he explained. "The investors are a category of business people that are go-go-go."

Florin feels the latest attempt will circumvent all of the past obstacles. In late July, RMI2 in conjunction with the Larimer County Bioscience Initiative and the Northern Colorado Clean Energy Cluster launched NoCo Angels, a Web-based portal for investors and entrepreneurs.

RMI2 Executive Director Mark Forsyth said the committee was considering some kind of low-overhead, e-mail-based system for exposing angel investors to potential deals. But another Colorado angel network steered him to Angelsoft LLC, a Web-hosted software program that provides platforms for both potential investors and for entrepreneurs.

"It would have taken us a year to develop something on our own, and we would have needed significant funds," Forsyth said.

Angelsoft was launched three years ago by serial entrepreneur and investor David Rose, the president of the New York Angels investor group. The company provides the software to angel investing groups free of charge - using the data matrix it gathers through the network as a basis for revenue generation. About 375 angel groups are now using the platform, and it processes more than 2,000 potential investments every month.



Angels on the Web

RMI2 created a Web site - www.nocoangels.com - incorporating the Angelsoft software tools. The site allows companies to upload business plans and other pertinent information. On the other side, it allows investors to view the plans, create discussions with other investors, comment on deals and even customize the types of deals about which they would like to receive notification.

Six companies have submitted or are preparing to submit deals for investment and RMI2 has identified about 70 potential investors. In addition to connecting local investors to local companies, the Angelsoft program will open doors to other groups.

"It taps us into a worldwide network," Forsyth explained. NoCo Angels can opt to allow other groups in the network to view and participate in local funding deals or for investors to view deals in other areas.

"One thing that the program does is provide some structure," said Florin, who is part of the steering committee for NoCo Angels.

Companies seeking investment will be required to submit certain information, so the site acts as a guide. If they don't have the information, then they are not ready to ask for a capital investment, Florin explained. Companies will receive directions on what is needed on the Web site and can also receive consulting through RMI2 and its mentors.

Florin warns that angel investing is not for the faint of heart.

"It's very high risk," he said. Because of the risk, it has to be about more than seeking a return. It is also about investing in the local community and being a mentor for another entrepreneur.

"For me, this is a payback activity," he said. "It's rewarding."

New but temporary space

While RMI2 is expanding virtually with NoCo Angels, it is also expanding physically. The city of Fort Collins is leasing the former home of its Natural Resource Department to RMI2 and two incubator companies. The space is attached to the existing RMI2 facility on Mountain Avenue, but is only a temporary fix.

Mike Freeman, CFO for the city, is leading the committee evaluating new facilities for RMI2. He pointed out that the organization will need to move by early 2010, as a new outdoor amphitheater is proposed for the space RMI2 currently occupies. But Freeman said the group is on track and will present an initial proposal to the RMI2 board in August.

RMI2 began an informal site selection process at the end of 2007.

"Originally, we had narrowed it down to two sites," Freeman said. However, one of the potential sites was sold, so the group has focused on creating a proposal for a facility at 200 E. Vine Drive. The site, formerly the home of Waste Management Inc., is owned by real estate developer Mike Jensen.

The committee is now working on preparing a proposal for the board that will include basic site planning, a firm commitment from the developer and a review of the financial models available.

"The big question is what role does RMI2 play as an owner, or not," Freeman said. In the next few weeks, the committee will look at the costs and benefits associated with leasing space vs. owning space. Freeman said that RMI2 is not in the business of facilities management, but that the committee is seeking the best long-term options.



Loveland makes progress

As details are being hammered out for a new facility, RMI2 is seeking to secure continued financial support from the city of Loveland. At the July 15 city council meeting, RMI2 representatives presented the progress of the organization specific to its impacts in Loveland.

The city of Loveland shelled out an initial $10,000 to help morph the Fort Collins Technology Incubator into the regionally focused RMI2. The money was used to cover organizational costs. Kelley Peters, chief operating officer for RMI2, said the organization is hoping to secure a commitment from Loveland for $40,000 for the next five years, which would represent about 20 percent of RMI2's funding commitments.

"We're starting down the road with Loveland," Peters said.

Right now, there are six Loveland companies receiving some level of service from RMI2. A funding commitment from Loveland would mean the organization could add another staff member, allowing Peters and Forsyth more time to dedicate to landing state grant funds.

Peters hopes the end result of a funding commitment can be a facility in Loveland to help house some incubator companies.

"I'm pretty passionate about putting up a shop in Loveland's downtown," she said, adding that RMI2 wants to avoid relocating companies to Fort Collins because that is the only place available.

Betsy Hale, business development manager for the city of Loveland, said that the funding commitment will be considered during the 2009 budget process, which has already started and will continue through September. City council has final approval.