Colorado Tech Scene May Help Obama's Chances In The State

Once better known for its hard-hatted miners and conservative brewing moguls, Colorado's economy has in recent years acquired some new mascots: the liberal software developer hunched over a laptop in a coffee shop, at least when he or she isn't snowboarding down a nearby slope.

Perhaps that's why President Barack Obama visited startup hot-spot Boulder -- and one of its dive bars -- in April.

As Colorado's tech scene grows, however, it is an open question as to whether Obama will reap the political benefits in what is arguably the swingiest of states. Colorado's tech community has yet to exert the kind of national political influence that Silicon Valley does. And while Obama won points for his stance against the SOPA anti-piracy bill in Congress, some of the state's venture capitalists are worried they will get caught in the political crossfire over Wall Street.

Over the last decade, migration to Colorado from other states -- particularly California -- has played a big part in turning the once solid Republican mountain redoubt into a highly contested swing state, said University of Denver political scientist Seth Masket. Obama leads Romney by a 48.9 percent to 42 percent margin in the HuffPost Pollster average for Colorado.

"I think the tech industry is an important story here," Masket said. And not just developers, he added, but many left-leaning urbanites are coming to Denver and its suburbs to avoid "the cost of life on the West Coast -- people who like that lifestyle but want to be able to afford a home."

The tech industry employed some 50,000 people in the state in 2010, according to the Colorado Technology Association. With its growth has come increased political power. Four liberal entrepreneurs -- Rutt Bridges, Tim Gill, Jared Polis and Pat Stryker -- have pumped millions into the state's Democratic Party apparatus. Polis now represents Boulder in the House of Representatives, where he's become a bulldog for the tech industry.

The industry has also helped keep unemployment in Colorado relatively low, at 7.8 percent compared to the 8.2 percent national average.

But the state's tech community could still become more influential. It's "a little bit like talking about Portugal's wine versus France, when you're talking about Colorado versus California," said Tom Cronin, a political science professor at Colorado College.

When Obama looks for campaign cash from the industry, he still looks primarily to Silicon Valley. He even has a field office there to shake donors down for more.

In Colorado, moreover, there are some spots of concern among the venture capitalists whose funds fuels the startups. One big source of irritation: the president's push to end the federal tax break on carried interest, which dovetails nicely with his attacks on Mitt Romney's past at private equity firm Bain Capital but, some in the industry argue, could threaten venture capital investment.

"Venture capitalists are tired as being lumped in with the private equity people by the president because it's just not true, we do our jobs very differently," said Jason Mendelson, a co-founder of the Foundry Group in Boulder. "We are creating a lot of jobs and a lot of wealth in this industry, and I don't like being painted as the guy who flies private jets."

"By the way," he added, "I'm all for paying more than I am now, so I don't want to come off as a right-wing Republican."

Mendelson's position is at odds with at least one other high-profile venture capital leader, Fred Wilson of Union Square Ventures, who thinks that investors "will still put the capital in the places where they will get the highest after tax return." And while the carried interest issue might hurt Obama among big donors, it's not clear that concern will filter down to rank-and-file software developers.

"They have no idea what that is," said Jud Valeski, CEO of Gnip, a Boulder-based company that helps businesses analyze social media. Instead, tech workers look around them and see a scene that only seems to grow.

"We are a thriving startup community, so people are not walking around on the street kicking rocks, looking down, woe is me," he said.

But Valeski does believe that the federal government needs to do more to allow highly skilled engineers from abroad to move to Colorado.

Visa issues, said David Cohen, CEO of the startup seed funder TechStars, are "a recurring thing, and it just creates difficulties for people to invest in those companies and makes us less likely to invest in the first place."

Cohen cited the case of Vanilla Forums, a company whose founders were forced to move to Montreal and create jobs there -- as opposed to in the United States -- because of immigration issues. He doesn't blame the president for the current stalemate over immigration, but wishes Washington could find some way around it to create opportunities for high-growth firms.

"In my personal community, there's still strong support for Obama," Cohen said.

But it's still too soon to tell whether the transformation that has swept over the Centennial State in the last ten years will hold come November. The famously freewheeling cities and towns where tech is headquartered may not give Obama enough votes to push him over the top in the face of more conservative industries like aerospace, which also plays a critical role in the Colorado economy.

"I'm in Boulder, right?" Cohen said. "My data points are incredibly biased."