One of the more recognizable pieces of the Denver skyline, this is the Wells Fargo building as seen from Grant Street.

Jim Hill/CPR News

While big firms like BP and Arrow Electronics grab headlines when they relocate to Colorado, it’s new businesses like Jacob Zax’ app startup, Edify, driving much of the state’s job growth as it comes out of the recession. Colorado has the seventh highest concentration of new businesses: One in every three businesses here are no more than five years old, according to the CU Leeds School of Business.

But a tech startup in Denver? Silicon Valley might seem more likely.

“The Bay Area is an amazing place for entrepreneurs,” Zax says. “But when you talk about young entrepreneurs, or people that are just starting, it’s a balance of factors.”

According to a new report from the Kauffman Foundation, Colorado has the highest rate of young entrepreneurs in the country, for many of the reasons the Edify co-founder and CEO cites: educated workers, access to capital, great mentors, an international airport.

Jacob Zax, CEO and co-founder of Edify, at his Denver office. The sound wave is of a song created on his app that helps novices learn to compose music.

Ben Markus/CPR News

“It also doesn’t have horrid rent prices and the traffic is doable and you can go outdoors and not spend all day in a windowless office that you’re paying $3,000 a month for,” Zax says of Denver.

To be sure, parts of Colorado are not cheap (see: the burgeoning Front Range and the mountain resorts), but it’s a lot cheaper than California, where office and home costs can be twice as expensive. Zax says that is critical to young firms, run by young people, where every dollar is precious.

“That directly tradeoffs with the amount of time you have to become successful,” Zax says. “And if you do become successful, the amount of ownership you have over your business, because you’re going to need to raise more capital to raise those expenses.”

OK, so cost is obviously big factor in why entrepreneurs are moving here, but Kelly Brough, the CEO and president of the Denver Metro Chamber of Commerce, has a second reason she thinks is compelling.

“I think we’re one of the few regions in the country, maybe in the world, who have figured out the distinction between when you compete and when you collaborate,” Brough says.

That appears to be especially true in Colorado’s tech scene, where more established business people here provide a lot of mentorship to younger firms. Entrepreneurs like Zax point to a culture of “giving back,” getting face time with people who’ve been through startups before. That kind of access is tough to find in the Silicon Valley. That gives the state a clear edge for a critical industry.

“Technology saved Colorado,” Brough says. “And it allowed Denver to start to compete at an international level that without it we never could have.”

In the 1980’s, oil and gas firms dominated up to half of downtown Denver’s office space. That left the city and the state vulnerable to the boom and bust cycle of energy. But 30 years later, the region has become one of the most diverse economies in the country — a somewhat surprising turn of events to long-timers like Richard Wobbekind, a senior associate dean at the CU Leeds School of Business. He moved here in the late 1970’s.

“Quite frankly, when I told my brother I was moving here he said, ‘you’re moving to a cowtown, you know, I hope you realize that. It’s beautiful, but you’re moving to cowtown.’”

Since then, there’s been tremendous investment in that “cowtown”: Denver International Airport, downtown sports arenas, light rail and commuter rail. The kind of things that attract businesses of all types. Add to that the sunshine and especially the mountains, Wobbekind says, and it’s no wonder entrepreneurs are choosing Colorado.

“So you have people that love to climb mountains and do crazy things and take on risk, and risk taking is an important part of an entrepreneurial spirit, and certainly the climate matches up with the entrepreneurial spirit.”

Which describes guys like Jacob Zax to a T. He says Denver’s draw is about way more than cost of living and other facts and figures about doing business.

“For me, it’s being outdoors all year ‘round, whether that’s to the mountains, skiing snowboarding, or I play ultimate frisbee in the summer and fall,” he says.  

If Zax’ business ever makes it big, the Colorado life is something he believes will help him attract more talent.