Actuator program to assist entrepreneurs' early exits

Fort Collins tech hub Innosphere will unveil a new program Tuesday aimed at helping entrepreneurs map early exits for their companies.

Three Boulder startups are participating in the first year of the Actuator program. Leo Technologies, Yonomi and VAIREX air systems will work with their teams, investors and Innosphere with the goal of being sold to or partnered with larger companies.

"There are certain companies that you can build, own, operate and run for a period of time," Innosphere CEO Mike Freeman said. "Then there are others where the logical path is going to be building value, building sales and then selling the company at some point when you think you're at peak value creation."

Actuator is for companies in the latter category working toward the payoff that comes with being sold. The program will help three to five companies navigate the merger or acquisition (M&A) process each year. It was partly based on the 2009 book "Early Exits: Exit Strategies for Entrepreneurs and Angel Investors," Freeman said.

M&As make up the majority of Colorado company exits followed by initial public offerings, according to the venture capital and angel investment database CB Insights.

Colorado-based private companies saw 101 exits in 2013, and 92 percent took place through M&As. Numbers on how companies transferred ownership in 2014 weren't immediately available.

To aid young, growing companies in their M&A goals, the Innosphere partnered with Boulder-based Covalency for the Actuator program. Covalency, co-founded by Steve Adams and Rob Geller, partners startups with resources, including people who can provide executive management support.

In recent weeks, VAIREX has been working with Covalency while piloting Actuator.

Founded in 2010, VAIREX manufactures and sells air compressors used in hydrogen fuel cells — an energy conversion device that can efficiently capture and use the power of hydrogen to produce electricity, heat and water.

"We knew someday that we were going to need to leverage this company. Five people can only take it so far," VAIREX CEO Ski Milburn said. On Saturday, Milburn flew to Europe to meet with a "huge" German-based industrial conglomerate to talk about a possible acquisition.

Without Innosphere or Actuator, he still believes he'd be talking to the undisclosed German company, but VAIREX "wouldn't be talking to them as smart."

"Being in the Innosphere program raised the quality of our presentations and discourse," he said. He added that the program also gave him the confidence to lead a small startup in negotiations with a a big company.

Growth and data reporter Adrian D. Garcia can be reached at 970.224.7835 or Twitter.com/adriandgarcia.