Capitalizing on opportunity is what entrepreneurs do best. For Carl Richell, harnessing the power of open source software in a custom hardware product was a novel idea in 2005. So he and his business partner started a company that specialized in this niche market – building computers for creators.
System76 is a Denver, Colorado-based computer manufacturer specializing in the sale of laptops, desktops, and servers. The company is known for its support of open-source software, including Ubuntu, the only installed operating system it offers. Now a self-funded operation, Carl recalls it wasn’t always that way. “I went everywhere for financing when we started the company. Banks wanted collateral and I didn’t have any at 25 years old.”
Colorado Enterprise Fund involvement
So Carl met with advisors at SCORE, the Service Corps of Retired Executives (an affiliate of the US Small Business Administration), about his expansion plans. He needed money but traditional banks wouldn’t invest in his startup. SCORE referred him to Colorado Enterprise Fund (CEF) where Carl qualified for two loans. The first in 2008, secured by his car, was used to market the company. The second in 2011, helped Carl buy out his partner and invest in hiring new engineers to drive the company forward.
“The second loan was pivotal for the company,” remembers Carl. “It launched us in a new direction in terms of job creation and growth. We went from 4 employees to 17 and from delivering our products to a few countries to over 60 now.”
Having celebrated over 10 years in business, Carl expects growth to continue for System76 now that open-source software is the industry standard. “We recruit people from other states and expect to reach 30 employees in a few years,” predicts Carl. “Thanks to CEF support and a solid foundation, we have an incredible team that can think long term about our company, our products, and our customers.” Carl is also considering moving his manufacturing operations stateside in the next few years.
Seeing his company’s success have a vibrant impact on Colorado’s economy thanks to CEF’s support, Carl made this observation. “There’s more care in establishing businesses recently which raises the bar for quality entrepreneurs. This fundamental change creates an energy and appreciation for how people run their businesses and create stuff. The result is better products from our state and for our customers.”