Tech founders, workers, and VC billions are increasingly being poached from California by Denver and Boulder.

• The Denver-Boulder, Colorado region's economy is heavily driven by technology, with companies such as Google, Amazon, and Salesforce setting up shop here, while startups are leaving San Francisco.
• A local venture capitalist informed CNBC during filming for the "Cities of Success" series that $17 billion in VC funding has been invested in the ecosystem over the past five years, according to CB Insights.
• After relocating from San Francisco to Denver, a startup experienced significant growth from six employees to over 200.

CNBC's quarterly Cities of Success series examines cities that have evolved into thriving business centers, drawing in capital, corporations, and talent due to their entrepreneurial mindset.

Many U.S. cities are seeking to replicate the success of Silicon Valley, with some achieving this goal to a greater extent in recent years due to California cities experiencing a business and worker population exodus intensified by the Covid pandemic.

The Denver-Boulder metro region in Colorado is one of the destinations for migration. An example of this is AgentSync, an insurance compliance software startup founded by Niji Sabharwal and his wife in San Francisco in 2019. The couple relocated their business to Denver during the pandemic and it is now thriving in the Mile High City.

The company has expanded from six employees in San Francisco to over 200 in Denver. According to Sabharwal, the couple relocated primarily to access talent to support the company's rapid growth and their admiration for Colorado's "business-oriented" governor, Jared Polis, who founded multiple companies before entering politics. Since the move, investment has surged, with AgentSync reporting a whopping $160 million in funding.

Initially, investors were doubtful about the move to the Rockies, but within a short time, Sabharwal said, "we were praised as visionaries for settling in Denver."

The tech industry ecosystem in Colorado, spearheaded by Denver and Boulder, has flourished and attracted both startups and tech giants such as Google, Amazon, and Salesforce. Additionally, the region is gaining recognition as a hub for cutting-edge technology, including quantum computing.

Nearly 17,500 tech businesses are located in the Denver metro area, accounting for about 73% of the 24,000 tech businesses in Colorado, according to the Colorado Office of Economic Development and International Trade. These businesses supported nearly 140,000 jobs as of the end of 2023, representing a 37% increase in employment within the past decade.

Dan Caruso, a Boulder-based venture capitalist who recently established a VC firm concentrating solely on tech in the region, informed CNBC that he believes there is a significant amount of funding being allocated to this ecosystem.

Over the past five years, approximately $17 billion in venture capital funding has been invested in the region, according to CB Insights' research.

"As I slowed down and took a closer look, I realized how many inspiring entrepreneurs were leading exciting companies across various sectors in this region," said Caruso, the former CEO and chairman of Zayo Group.

Despite the significant growth of the Denver startup community, it has not made as much progress in diversifying its business community. A recent Brookings Institute study found that Black-owned businesses account for only 1.5% of all companies in the area, despite the metro area's Black population being 7.1%. Even the top 10 cities for Black-owned business growth in the study fall short of corresponding metro population metrics.

Zaneta Kelsey, co-founder and CEO of Access Mode, stated that the challenges faced by the founders they serve are mainly related to capital and access to capital. Since 2022, Access Mode has provided over 50 startups with a combined $1 million in funding, free educational classes, and access to VC networking events.

Bennett, a Black business owner, has created an app called Mili Llama that simplifies the hiring process for substitute teachers in school districts.

CNBC reported that Donavan stated, "We are like Uber for substitute teachers."

With the $20,000 he received for his startup, he was able to turn his idea into a live app and secure two paying school districts as clients.

Bennett emphasized the need for more inclusivity in the industry in Denver and Boulder, but he also highlighted the city's potential as a great place to start and run a business. He said, "The beauty of living here in Denver is that there is so much support in the city for new startups. As a new startup, you're looking for support and validation to help you get to the next level."

CNBC will air a special on "Cities of Success" featuring Denver and Boulder on April 11 at 10 p.m. EDT.