(This story originally appeared in the Denver Business Journal on October 19, 2017)
Denver is one of the top U.S. cities for entrepreneurs and tech startups, but companies starting here aren’t adding as many jobs as quickly or growing as large as they are in the most entrepreneurial American metro areas, two surveys found this week.
The Denver area placed 13th among U.S. metro areas in a ranking of growth entrepreneurship and also reached 13th in a study focused on tech startup job openings.
The 2017 Kaufman Index growth entrepreneurship report from the Ewing Marion Kauffman Foundation found Denver has startup activity and a concentration of high-growth companies by revenue at levels comparable to or higher than many metro areas.
But cities that were ranked higher overall have a higher proportion of “scaleups” than Denver — defined as startups that grow to more than 50 employees before their 10th year.
The Denver metro area held the same ranking in last year’s survey. The metro area as defined in the report encompasses Denver, Aurora and Broomfield but leaves out Boulder County.
Colorado rated seventh among U.S. states for growth entrepreneurship.
The Kansas City-based Kauffman Foundation is an organization focused encouraging entrepreneurship. The study looked at hundred of metropolitan areas, using the federal government’s geographic definitions, and ranked the top 40.
The Kauffman Index found that, nationally, the startup growth rate has reached a pace not seen since 2007, topping pre-recession levels for the first time. Startups turning five years old last year grew an estimated 75 percent, the study found.
The top five U.S. metro areas for overall growth entrepreneurship this year are Washington D.C.; Austin; Columbus, Ohio; Nashville and Atlanta, the Kauffman study found.
Denver has some surprising company in being low on scaleups relative to other U.S. entrepreneurial hubs. Other cities with a lower proportion of scaleups to other businesses include Los Angeles, New York City, Atlanta, Seattle and Portland.
In another report, TechNet, a national association for technology industry CEOs, looked at the number of tech job openings being filled by companies that call themselves startups, looking at postings nationwide over several months in 2016 and 2017.
The association measured that against the overall number of jobs open in each metro area to get a sense of the growth and relative significance of the tech startup scene in each city.
Denver’s 13th ranking placed it just behind the Washington and Atlanta areas and roughly equal with Salt Lake City and Portland, Oregon.