Colorado Springs Pioneer Community Investment Fund
Colorado Springs Pioneer Community Investment Fund (“Pioneer Fund”) is a private equity fund with a hybrid approach focused on building the Colorado Springs community through job creation and economic impact, and providing investors a financial return.
The Pioneer Fund’s focus on small to mid-market businesses in the Pikes Peak Region presents several benefits for investors and the community alike:
Targeted Criteria for Investment
By concentrating on businesses with 3+ years of $500K-$1.5M EBITDA, the Pioneer Fund can identify companies with a proven track record and growth potential.
Growth Potential
With a target of $2.5M-$5M growth over 3-5 years, the Pioneer Fund aims to fuel the expansion of local businesses, contributing to the region’s economic development and prosperity.
Strong Community Connections
Leveraging its deep roots in the Pikes Peak Region, the Pioneer Fund can tap into existing networks and relationships to support portfolio companies and foster community engagement.
Job Creation and Tax Base Support
By adding jobs to the community, the Pioneer Fund plays a crucial role in enhancing employment opportunities and strengthening the local tax base, thereby contributing to sustainable growth and stability.
Social Responsibility
The Pioneer Fund demonstrates its commitment to social responsibility by giving back to the community through financial contributions, sponsorships, and other forms of support for local initiatives and organizations.
Financial Return for Investors
With a target annualized return of 12%-15%, the Pioneer Fund offers investors the opportunity to achieve attractive financial returns while making a positive impact on the local economy.
Overall, the Pioneer Fund’s strategic focus on investing in small to mid-market businesses in the Pikes Peak Region aligns with the region’s economic development goals and presents a compelling opportunity for investors seeking both financial returns and community impact.
Colorado Springs has a strong foundation in its military/defense industry and nonprofit sector, which likely provides stability to the local economy. However, the lack of diversification in the mid-market business sector poses challenges for growth and job creation. Here are some steps that Colorado Springs could consider to address these issues:
Entrepreneurial Support Programs: Establish programs to support and encourage entrepreneurship, providing resources and guidance to individuals interested in starting or scaling businesses in the mid-market space. This could include incubators, accelerators, and mentorship programs.
Access to Capital: Facilitate access to capital for small and mid-sized businesses through initiatives such as small business loans, venture capital funding, and angel investor networks. Encouraging local banks and financial institutions to provide tailored financing options can also help.
Executive Development Programs: Offer executive education and leadership development programs tailored to the needs of mid-market businesses. This could include workshops, seminars, and executive coaching to help business owners and leaders enhance their management skills and strategic vision.
Networking Opportunities: Foster networking opportunities for local businesses to connect with each other, potential clients, and industry experts. This could involve organizing industry-specific events, business forums, and networking mixers to facilitate collaboration and knowledge sharing.
Talent Retention and Attraction: Work on retaining local talent by creating attractive job opportunities and career pathways within the region. Offering competitive salaries, professional development opportunities, and a vibrant quality of life can help in retaining skilled graduates from local colleges and universities.
Industry Diversification Efforts: Encourage diversification within existing industries and explore opportunities for new sectors to thrive in Colorado Springs. This could involve identifying emerging industries with growth potential and creating an environment conducive to their development through supportive policies and infrastructure investments.
Collaboration with Educational Institutions: Strengthen partnerships with local colleges and universities to align educational programs with the needs of the local business community. This could involve developing curriculum focused on entrepreneurship, business management, and emerging industries, as well as fostering internship and apprenticeship opportunities with local businesses.
By implementing these strategies, Colorado Springs can work towards fostering a more dynamic and diversified economy, unlocking growth potential in the mid-market business sector and creating new opportunities for job creation and economic prosperity.
Creating a Pikes Peak Region Private Equity Fund that meets the needs of the local community and investors requires a strategic approach. Here’s a plan tailored to address these requirements:
Establishment of the Fund
Form a dedicated team comprising local investors, experienced executives, and financial experts to manage the fund.
Define the investment criteria, focusing on businesses with growth potential, preferably in sectors that align with the region’s strengths and future opportunities.
Local Capital & Executive Expertise
Engage local investors who are passionate about the economic development of the Pikes Peak region. This could include individuals, family offices, corporate entities, and institutional investors.
Leverage the expertise of local executives and industry leaders to evaluate investment opportunities, provide strategic guidance to portfolio companies, and foster their growth.
Keep Company Headquarters Anchored in COS
Prioritize investments in companies willing to maintain their headquarters or significant operations in Colorado Springs. This commitment ensures the retention of jobs and talent within the region.
Work closely with portfolio companies to leverage the advantages of operating in Colorado Springs, including access to skilled workforce, supportive business environment, and quality of life amenities.
Build Community Commitment
Engage with local stakeholders, including government agencies, community organizations, educational institutions, and residents, to understand their needs and priorities.
Align investment strategies with community development goals, such as job creation, infrastructure enhancement, affordable housing, and environmental sustainability.
Grow Quality Jobs & Retain Graduates
Invest in companies that have the potential to create high-quality jobs with competitive salaries, benefits, and career advancement opportunities.
Partner with educational institutions to develop programs that equip students with skills and knowledge relevant to the needs of local employers, thereby increasing retention of graduates in the region.
Diversify Local Careers & Economy
Seek opportunities to diversify the local economy by investing in emerging industries, innovative startups, and high-growth sectors beyond the traditional strengths of the region.
Support entrepreneurship and small business development to nurture a dynamic ecosystem that fosters innovation, creativity, and economic resilience.
Financial Return with Visible Community Impact
Strive to generate attractive financial returns for investors while simultaneously creating visible and measurable community impact.
Develop key performance indicators (KPIs) to track the social, environmental, and economic outcomes of investments, and report progress transparently to investors and stakeholders.
By executing this comprehensive strategy, the Pikes Peak Region Private Equity Fund can play a pivotal role in driving sustainable economic growth, fostering local entrepreneurship, and enhancing the quality of life for residents in Colorado Springs and the surrounding areas.
Our Growing Market
Population Growth: With the Colorado Springs MSA expected to reach 1.1 million people by 2040, there’s a significant market for businesses to tap into. This growth presents opportunities for expansion and diversification across various industries.
Economic Growth: The expanding population and entrepreneurial culture contribute to a thriving economy. This growth can attract investment, talent, and innovation, driving further development and prosperity.
Entrepreneurial Culture: Colorado Springs’ entrepreneurial spirit is a valuable asset. Encourage and support local entrepreneurs through mentorship programs, access to funding, and networking opportunities to foster innovation and business success.
Vibrant Downtown: The development of a vibrant downtown area signals positive urban revitalization. This creates a hub for businesses, entertainment, and cultural activities, attracting both residents and visitors alike.
Job Quality: While job growth is expected, the majority of new jobs may be low-paying. Focus on attracting businesses that offer higher-paying jobs and invest in workforce development programs to upskill employees for better opportunities.
Retention of Graduates: To retain graduates, create an environment that offers attractive job prospects, a vibrant cultural scene, and opportunities for personal and professional growth. Engage with local businesses to create internship programs and career pathways for graduates.
Support for New Companies: Provide support for startups and new businesses to help them overcome challenges and succeed. This could include access to mentorship, incubator programs, and resources for business development.
Investment and Exit Options: Increase local investment options and create pathways for successful exits for businesses. This could involve cultivating a network of angel investors, venture capital firms, and strategic partners interested in supporting local businesses.
Fund Structure
Capitalization
The fund will raise $12.5 million in equity offering, supplemented by local bank debt.
Investment Strategy
The fund will target the acquisition of 6-8 companies in the $3-7 million range. These companies should have a history of profitability and are not distressed businesses.
Investor Favorability
The fund structure heavily favors investors, with a 3% call at close and the ability to call additional percentages per acquisition. This suggests that investors have significant control over capital deployment.
Management Fees
The fund charges a 2% annual management fee, which ends at year 5. This fee is treated as contributed capital in the waterfall distribution.
Profit Distribution
85% of profits are allocated to investors, indicating a high return potential for them.
Value Addition
Portfolio companies will receive board and executive expertise from the management company, investors, and the broader network associated with the fund.
Investment Period & Liquidation
The fund has a 5-year investment period, during which it will acquire and manage portfolio companies. After the investment period, there’s a 5-year liquidation period, presumably for divestment and distribution of proceeds.
Community Impact
Prioritize industries such as medical, sports, energy, and technology manufacturing, which offer high-paying jobs and have the potential for significant economic impact.
Encourage companies in these industries to provide high-paying jobs that are anchored in the community. This involves not only creating jobs but also investing in employee development, retention, and career advancement opportunities.
Collaborate with colleges and universities in the area to establish internship programs, job placement initiatives, and workforce development efforts tailored to the needs of targeted industries. This ensures that graduates have access to relevant job opportunities and helps bridge the gap between education and employment.
Foster connections between companies and the COS community by actively involving them in local organizations, such as Chambers of Commerce, Economic Development Corporations (EDCs), and industry associations.
Encourage participation in community events, corporate volunteering programs, and corporate giving initiatives to strengthen ties and demonstrate a commitment to the well-being of the community.
Focus on attracting and retaining talent and investment within COS by promoting skilled technical manufacturing and other high-value industries.
Emphasize the importance of building a diverse economy resilient to economic fluctuations, where businesses from various sectors contribute to sustainable growth and prosperity.
Encourage both the fund and portfolio companies to commit to COS for the long term. This involves not only financial investment but also active participation in community development efforts, supporting local businesses, and nurturing a supportive ecosystem for growth and innovation.
Portfolio Companies
Our Team
Chris Cipoletti
CEO of Pioneer Fund
Brian Pope
General Manager at Colorado WaterJet
Murray Johns
General Manager at Integrity
Rebecca Schwaderer
Cross-Company Bookkeeper