Apply to CSTI
The City of Colorado Springs is committed to a diverse and broad reaching business community. The Colorado Springs Technology Incubator (CSTI) was founded to assist this commitment by providing a Center of Excellence to grow early stage high-tech companies into highly successful corporate organizations. These successful organizations will have a positive impact on the community through increased revenues and employment.
Most of the mentorship and services provided to client companies are free of charge. However, CSTI currently takes 5% of the accepted company's fully diluted stock outstanding as a form of future payment for services and mentorship.
CSTI has developed and implemented a process whereby high-tech companies within Colorado Springs can apply for acceptance. Not all companies that apply can be accepted because of CSTI's limited space. However, high-tech companies that believe they have or can meet the acceptance criteria are encouraged to apply. It is the policy of CSTI to never close the door on any promising high-tech company within Colorado Springs. Those companies that are not initially accepted into the Incubator are given suggestions to improve their application and the opportunity to re-apply.
We look forward to receiving your business plan.
Respectfully,
The Board of Directors
The Colorado Springs Technology Incubator (CSTI) was formed to provide high-tech start-up companies with infrastructure, services and mentoring. These elements are necessary to initiate the growth of these businesses toward self sufficiency through profitability or equity investment. To that end, CSTI has developed a process for reviewing potential client companies and a set of criteria for evaluating the likelihood that they may ultimately become highly successful companies.
Traditionally, a business plan is the most effective way for companies to have the potential of their opportunity evaluated. Consequently, potential client companies must have a business plan that articulates all or a good portion of the following:
- What is the market space for the technology?
- What is the problem within the market space being addressed by the technology?
- How does the technology address the problem?
- How large is the market space (size of the problem)?
- What is the competitive landscape within the market space?
- What is the unique competitive advantage of the technology?
- How does the company plan to sustain its competitive advantage?
- What is the projected financial return for the company (measured through a forecasted P&L, balance sheet, cash flow statement, etc.)?
- What is the makeup of the founding team and the level of experience each member has relevant to the technology and the market space?
- How does the company plan to sell its product (direct / indirect)?
- Does the potential client company have a working prototype, alpha or beta site that demonstrates the technology's capabilities?
If the potential client company does have a business plan that discusses all or a good portion of the above to the extent that the opportunity can be effectively evaluated, CSTI will provide suggestions for sections that should be improved.
The ability to clearly communicate the company's mission, opportunity and vision is essential to attracting equity investments. Therefore, potential client companies must have a presentation that addresses these issues and is reflective of the business plan. If the company does not yet have a clear presentation, CSTI will work with the company to develop and polish the presentation prior to entering the acceptance process outlined below.
NOTE, the business plan need not be limited to the sections above, but should not exceed 25 pages including exhibits.
- The CSTI Application, along with either a business plan, executive summary or feasibility study, must be submitted to CSTI either in hard copy or electronically.
- A letter from CSTI will be sent to the company acknowledging receipt of the business plan. NOTE, because of the volume of business plans submitted to CSTI it is not possible for CSTI to sign a confidentiality agreement prior to receiving the plan. Submitted plans that are not accepted will be returned to the company.
- The feasibility study will be reviewed by the CSTI for its completeness and expression of the opportunity.
- If the Supporting Documents provide a good understanding of the opportunity (as outlined by the acceptance criteria), and does not compete with current CSTI companies, the potential client will be offered an interview. The purpose of the interview is for CSTI to get a detailed understanding of the opportunity in terms of its market potential and technical capabilities. This interview should last 1 - 1.5 hours. NOTE, those companies submitting business plans should review the CSTI web site prior to submitting the plan to see if there are any CSTI portfolio companies that may compete with the company submitting the plan.
- Based on the interview and the judgment of CSTI, if the opportunity is considered "likely to succeed," the company will be invited to present to the acceptance committee. This presentation will be one half hour, followed by 20 minutes of questions from the committee.
- Based on the presentation to the acceptance committee, the committee will make an acceptance decision.
- If the company is accepted into the Incubator, it will be expected to sign a contractual agreement with the CSTI reflecting the terms and conditions of its acceptance and criteria for maintaining its status as a "CSTI company in good standing."
If you have questions about the application process, please email info@cstionline.org or call 719.685.7877 x100.
Develop a Feasibility Plan for your new venture by responding to the questions listed in the following outline.
- Executive Summary
- Describe the type of your business venture (retail, wholesale, manufacturing, service). What is the current stage of development (concept, start-up, initial operation, expansion).
- Describe the uniqueness of your product/service; what problems or need it addresses. Intellectual property position.
- What is the market in terms of industry, target market, customer needs, product benefits, and market penetration?
- What amount of money will the venture require and how will it be spent? Is debt or equity financing planned and who will provide the start-up capital?
- What is the unique value proposition in your venture?
- Product/Service
- What is the purpose and unique features of your product/service? Consider how cost, design, and capabilities meet customer needs.
- Describe the current stage of development (idea, prototype, small production runs, etc.), with projected timetable for completing development. What are the limitations of your product/service.
- What is the status of intellectual property (patents, trademarks, copyrights), status of agreements, e.g., licensing, royalty, distribution, etc.; and, state of governmental approvals required?
- Address any product liability issues and type of insurance to cover.
- Describe potential for new products spinning off to meet market needs.
- Describe the production/manufacturing process. Breakout costs of production/subcontracting with both percentages and dollar amounts. Identify variable expenses, e.g., labor (production people), repairs, maintenance, etc.
- Product Market
- Describe the size of the market (national, regional, state, etc.), growth potential, life cycle of product in industry, predict industry trends, describe your competitive advantage. List the demographic features of your customer base. Give the primary benefits of your product/service, features, advantages in terms of satisfying your customers.
- Describe and prioritize your target market(s), including size and potential volume. Detail market segments.
- Describe your method for penetrating the market. How will the product be sold?
- Price and Profitability
- Give prices for products/service and explain your pricing assumptions.
- Estimate sales over a three-year period and explain your assumptions.
- Give the cost of providing the product/service for three years and explain your cost of goods sold assumptions.
- Calculate the gross margin (sales-cost of goods sold) and include in assumptions the gross margin percentage and compare to industry averages.
- List operating expenses for a three-year period with associate assumptions. Cover marketing, administrative, and general expenses.
- Estimate the sales, cost of goods sold, gross margin, operating expenses, and profit by year for three years.
- List start-up costs, those items which do not have a income tax benefit (e.g., telephone, security and utility deposits, opening inventory, rent, etc.)
- List start-up expenses, expenses incurred prior to first sales (e.g., legal and accounting fees, sales tax permit, pre-opening advertising, etc.)
- Describe capital expenditures (equipment, furniture, etc.)
- Plan for Further Action
- Identify the pitfalls and provide possible strategies to overcome. Identify the positive aspects of your plan.
- Describe how you will secure the capital you need (bank, venture firm, friends and family).Describe the entrepreneur's role in the venture. Who are the other key team members that need to be brought on board as the venture progresses through its funding stages. What is the compensation philosophy that you expect to pursue with your key personnel?
- Describe what more is needed to enable the writing of a business plan (e.g., in-depth market research, creating a management and organizational structure, preparing operating budgets and pro formas, developing operating and control systems, and planning for growth).
- If a license is anticipated, identify the company and the reasons why.
- If there are potential corporate partners, list who these are and why.
- If you have proprietary rights that could be sold, indicate to whom and how much.
- List key advisors and manner and cost of compensation for those who are available to assist in preparing a business plan.
Download the application form here: CSTI Company Application Form
This is a Microsoft Word "forms" document with fields that can be filled in. Save the document with your company name and submit to the email below.
If you have questions about the application process, please email info@cstionline.org or call 719.685.7877 x100.
