Engage Colorado – The Honest Assessment: A Brief Summary

Newsletter — Issue 18 — June 11, 2026

This newsletter has been published by Engage Colorado.

A Companion to The Innovation Vision

The Honest Assessment: A Brief Summary

This Engage Colorado Newsletter reflects the personal opinions of Dan Caruso, written with the support of the Caruso Ventures team. The Ensuring Colorado's Innovation Future Coalition did not review and has not endorsed this Engage Colorado Newsletter.

Before continuing the section-by-section walk through The Innovation Vision for Colorado, I want to step back to its companion document: The Honest Assessment.

The Innovation Vision describes where Colorado should go. The Honest Assessment describes where Colorado is — and why we got here.

Two things are worth saying upfront before you read what follows.

First: the summary below is intentionally not a prescription. It does not say what Colorado should or shouldn't do and does not advocate for specific legislation or other changes. Its purpose is to document, with the data, why Colorado has been losing momentum as a geography that attracts the founders, investors, and operators who build America's innovation economy.

Second: what follows is an abbreviated version of the Executive Summary. The full Executive Summary — and the full Honest Assessment, including the twelve-factor framework, the state-by-state scoring, the methodology, and the sourcing behind every claim — lives at thehonestassessment.com. I strongly encourage you to read both in full.

A note on authorship: As with The Innovation Vision, I led the preparation of The Honest Assessment. Its substance reflects conversations, observations, and data shared across the state by people who care deeply about Colorado's future. However, it has not been reviewed nor endorsed by the full coalition that signed The Open Letter.

The Honest Assessment in Brief

A clear national pattern — the founders, investors, and executives who drive America's innovation economy are making observable choices about where to live, build, and deploy capital. Those choices favor a consistent set of states — Arizona, Florida, Georgia, Idaho, Nevada, New Mexico, North Carolina, Tennessee, Texas, and Utah (Destination Geographies) — and disfavor another set: California, Illinois, Maryland, Massachusetts, Minnesota, New Jersey, New York, Pennsylvania, and Washington (Departure Geographies). The pattern is confirmed by IRS migration data, U.S. Census domestic migration figures, corporate headquarters relocation records, and venture capital deployment trends.

The pattern is driven by policy — not partisanship, and not by lifestyle. California has among the best lifestyles in the country and is hemorrhaging talent. The states losing capital are losing it because of tax structures, regulatory environments, and political postures that compound — not because of inferior quality of life. The states winning are winning on deliberate policy: Texas, North Carolina, Tennessee, and Arizona have each made specific, intentional choices to compete for founders and capital.

A twelve-factor framework across four categories — the Honest Assessment identifies twelve factors across four categories — quality of life and institutional depth; business and political climate; cost of doing business; and regulatory landscape. Scoring Destination and Departure Geographies on each factor (1–5 scale) reveals a stark divergence:

Colorado is strong where it matters least to the current migration pattern, and weak where it matters most. On Category 1 — quality of life, infrastructure, and institutional depth — Colorado scores 4.3, exceeding both Destination and Departure Geographies. But on political climate (1.9 current, 1.4 trajectory) and regulatory burden (1.5 current, 1.4 trajectory), Colorado sits squarely in Departure territory — and on regulatory burden, Colorado actually scores below the Departure average. On eleven of twelve factors, Colorado's trajectory equals or falls below its current position — meaning the state is not only poorly positioned, it is getting worse.

The consequences are already visible —

98 companies have relocated from Colorado since 2019, eliminating 13,607 jobs — and the annual rate has accelerated sharply: 6 relocations in 2022, 11 in 2023, 22 in 2024, and a record 27 in 2025. Colorado recorded its first net negative domestic migration since 2004, with 12,100 more people leaving than arriving. The share of Colorado businesses expecting to grow their workforce has collapsed from 48% in 2022 to 29% in 2025, and 45% now plan to invest out of state. 81% of Colorado executives now say state policy is negatively impacting their business — up from 65% just six months earlier.

Yet Colorado's position is uniquely promising — no other state combines Destination-caliber natural assets and institutional infrastructure with the policy flexibility to change course. Colorado's tech sector — $7.46 billion in venture capital deployed in 2025, the state's second-highest year on record — demonstrates that the innovation engine has not stalled. It is operating despite the policy headwinds, not because of them. The factors where Colorado scores poorly — political rhetoric, regulatory burden, fiscal trajectory — are precisely the ones within the power of state leadership to change. The playbook is proven elsewhere: North Carolina moved to a 4.25% income tax on a glide path to 2.5%; Arizona built a flat 2.5% income tax and a semiconductor manufacturing corridor anchored by TSMC's $165 billion fabrication complex. Both added policy competitiveness on top of the assets they already had. Colorado's Category 1 assets are stronger than either of theirs.

The full Executive Summary develops these themes in greater depth — with state-by-state factor scoring, additional Colorado-specific data including the SB24-205 case study and Denver's office vacancy indicators, the methodology behind the scoring framework, and the full body of evidence underlying each claim above.

The Innovation Vision section-by-section walk will resume in the next Engage Colorado newsletter — picking up at Section II.

Read the Source Documents

— Dan Caruso

Managing Director of Caruso Ventures, Host of The Bear Roars Podcast, and Board Chair of Boulder Roots Music Fest