Originally published in the Boulder Daily Camera
By Nancy Stevens
Call it “Hippy town hits it big.”
That’s my shorthand for the potential for massive wealth creation here in Boulder, fueled by the innovative spirit of our many startups. This magnet for lovers of the outdoors, including me, also has become a darling of financiers doling out dollars to promising new ventures — a whopping $1.4 billion in estimated venture capital funding pouring in since 2007.
VCs look for an exit and a return on their investments by the 7 year mark — which means startups that have incubated over the last few years could be ready for acquisitions. That could mean a big wave of acquisitions — and the resultant new wealth creation- could be coming, and soon.
What kind of effect will new wealth have on Boulder? From a business perspective, we’ve done something most cities fail to do — establish boundaries. We have zoning rules that limit office space expansion, and we don’t allow the city limits to sprawl in every direction. Boulder is ringed by open space and we don’t have a tall skyline downtown, so there’s not much room to expand.
While this may have made Boulder notorious for being unfriendly to business, what this has done for our business landscape is remarkable. Not only does it sustain our way of life, surrounded by gorgeous open space, but it also edits us. Our business story cannot become a run-on sentence of growth.
In that sense, we’re like Twitter. We are improved by having a limit on the number of characters.
While there may have been more VC funding pouring into Boulder in the dot-com boom days, that bubble popped and didn’t amount to much in terms of durable wealth. This time, we are already seeing real businesses, paths to profitability, and a couple of acquisitions.
When a company like Twitter buys a company like Gnip, they are really buying the engineering talent. That talent likes living in Boulder. So the start ups — and their employees and their new wealth — are likely to stay here, so they can work where they want to live, and not the other way around.
From my perch as a wealth advisor, I’m seeing early signs of these liquidity events. I’m starting to field more financial questions about what to do with cash, stock option plans, concentrated stock positions, 10b51 plans, and more.
And I’m only hearing from people making the time to get advice. Most are too busy building their companies, riding their bikes and enjoying the outdoors.
As the Yahoos and the Microsofts and the Googles come to Boulder to look for deals, they see this fantastic life we have here. So in addition to the potential for new wealth creation, there is also a lot of young wealth moving here.
I met a woman who was employee number 30 at Twitter, who moved to Boulder because she wanted more of a lifestyle. There are people from Yahoo, people from Google. They’ve made the money elsewhere, and they want to live in a beautiful place, and they want to engage in the startup community.
Of course, this wave of wealth could be both good and bad for the character and texture of life in Boulder.
Fortunately for Boulder, the strict limitations we’ve placed on growth mean that the startup culture in Boulder is that of an incubator, and it will always be so. If a company gets too big, it needs to go someplace else. It keeps Boulder businesses forever young, making its startups creative and fresh.
This is a city that already has a wealthier vibe than it ever has, and our housing costs are only second to Aspen’s in the state of Colorado. We may see both of those trends continue. This is crowding out affordable housing; normal working folks can’t afford to live here anymore.
Higher rents downtown make it tough for local merchants to compete on the outdoor pedestrian Pearl Street Mall, and only national chains can afford the primo retail space.
On the other hand, Boulder continues to attract interesting people from all over the world for the lifestyle. We have lots of new restaurants with ethnic and other fine foods, and that has been a boon to local organic farmers, farm to table, and the farmer’s market. Families with young children are moving back downtown and newcomers are embracing the arts. Successful entrepreneurs support hairstylists, doctors, lawyers, dentists and of course, bicycle shops. The beloved, iconic McGuckin Hardware has prevailed and flourished despite Home Depot opening blocks away.
To sum it all up, The New York Times once described Boulder as heaven on earth for “the bike-riding, cliff-rappelling, latte-loving, eco-certified boho tycoon.” For my part, I’ll stick with “Hippy Town Hits it Big.”
Nancy Stevens is chairman of First Western Trust Bank in Boulder.