How to Plan for the Future Generations of Colorado Business Owners
Colorado faces two converging shocks: over 76% of Colorado’s 730,887 small businesses are owned by baby boomers, most without a succession plan and today 92% of small business exits occur through closure. At the same time, Artificial Intelligence (AI) is thinning the entry-level job market Colorado’s college graduates have always counted on. The Colorado Succession Through Apprenticeship (STA) Program turns two problems into one solution: a state-coordinated pipeline that trains graduates to evaluate and operate existing businesses, then connects them to owners ready to show them the ropes and eventually hand over the keys. It builds on assets Colorado already owns — its universities, its small-business density, and the Office of Economic Development and International Trade’s (OEDIT) economic development tools — to keep jobs and wealth in local communities and to position the state as the national model for the Great Ownership Transfer, a term used to signify the largest intergenerational wealth shift.
Challenge and Opportunity
The impact of the Great Ownership Transfer on the U.S. economy could lead to significant job losses. While small businesses account for 99% of all U.S. companies, they employ about half of the nation’s workforce and represent 43.5% of our GDP. “Today, an alarming 92% of small-business market exits occur through closure, while only 5% are completed as sales, and 3% are transferred to new owners”.
Over three-quarters of Colorado’s 730,887 small businesses are boomer-owned, and many have no succession plan. These businesses employ an estimated 1.2 million people. According to the Small Business Administration, the leading types of Colorado small businesses include:
- Professional, Scientific, and Technical Services
- Real Estate and Rental and Leasing
- Construction
- Transportation and Warehousing
- Other Services (except Public Administration)
- Health Care and Social Assistance
- Administrative, Support, and Waste Management
- Retail Trade
According to the Exit Planning Institute, a majority of business owners want to ensure their business remains financially viable, with 70% preferring an internal transfer, 17% seeking an external sale, and 13% unsure of next steps. A willingness to find a reasonable succession is evident, and college graduates open a new bridge for ownership transfer.
College graduates are experiencing a decline in entry-level career opportunities due to AI. A 2025 study found that entry-level job postings declined by 35%. Today, according to the Federal Reserve Bank of New York, about 5.6%–5.7% of recent college graduates are unemployed, up from 3.6% in March 2019. New college graduates are facing a career headwind.
The two trends create an uncommon opportunity to create new entry-level jobs while providing boomer-owned small businesses with a potential succession and ownership path for Generation Z. The window for intervention is open, but every year without a bridge means more businesses close and more value evaporates. Colorado has the university infrastructure, the small business density, and the policy tools to act.
The Colorado STA Program addresses both challenges simultaneously by creating a structured pipeline between university students and boomer-owned small businesses seeking new ownership.The program works in sequence across three components.
- Working with local chambers of commerce and Small Business Development Centers (SBDC) in coordination with OEDIT, small businesses whose owners are within a decade of exit will be identified.
- Universities design a dedicated small business curriculum that is distinct from traditional, startup-focused entrepreneurship programs. The STA Program curriculum trains students to evaluate, acquire, finance, and operate an existing small business.
- Selected universities host an annual STA Summit that brings both groups into the same room, creating a matching marketplace supported by legal, financial, and succession planning advisors. The annual conference can be supported by sponsor and exhibitor fees.
The combination of these components results in the STA Program, in which students begin work in a small business, the small business owner transfers knowledge and gains confidence in the potential new owner, and, in several years, a bridge is formed to begin the shift to a new owner.
The model is proven with medium-sized businesses with about $8 million in revenue and thirty-plus employees. Elite MBA programs at Wharton, Chicago Booth, and UVA Darden already offer Entrepreneurship Through Acquisition (ETA) programs for mid-market companies. Colorado also has a few emerging ETA programs. However, what doesn’t exist is a version designed for Main Street that is accessible to a broader range of graduates and aimed at continuity of small business rather than closure. The Colorado STA Program builds that model first and creates the opportunity to export it nationally. It creates a new program – Succession Through Apprenticeship.
Colorado STA Program Recommendations
Recommendation 1. The Governor drafts and signs an executive order to start the STA Program pilot, instructing OEDIT to begin the work.
The Governor should launch the Colorado STA Program by executive order, without waiting for legislation. They hold the authority to direct OEDIT’s priorities, convene state agencies, and partner with local SBDCs and chambers of commerce; each having critical stakeholder roles with a full set of responsibilities the pilot requires.
The STA Program overview
A state-coordinated pipeline in three components:
- identify boomer-owned businesses within a decade of exit, working with SBDCs and local chambers of commerce.
- develop a university curriculum that trains students to evaluate, finance, and operate an existing small business.
- host an annual STA Summit that matches the two groups. Students enter as apprentices, learn the business over three to five years, and transition into ownership. Small business owners learn succession planning requirements and responsibilities.
The Goal is to have measurable structural change. The fewer small businesses closing, more transfers of ownership, and more graduates on a path to own an existing small business.
The Key players include:
- The Governor’s Office directs; OEDIT implements.
- The Colorado Economic Development Commission can facilitate funding; the Colorado Employee Ownership Commission can guide design and implementation, building on OEDIT’s existing cooperative and employee-ownership programs.
- SBDCs, local chambers, and city economic-development offices supply the business pipeline; and pilot universities and community colleges deliver the curriculum and host the Summit.
The Cost would be an estimated $200,000 to $350,000 in seed funding across the three-year pilot, drawn from existing OEDIT economic-development resources rather than a new appropriation. Seed funds cover curriculum development, business identification and outreach, and the STA Summit. No funding is necessary for student tuition or acquisition financing, which are addressed separately. The Summit is designed to become self-sustaining through sponsor and exhibitor fees.
The executive order. Appendix A sets this in motion. It establishes the Program within OEDIT, assigns the three components and the interagency roles above, directs a Request for Proposals to pilot institutions, sets pilot KPIs (100 students, 150 businesses, 25 in-process transitions by Year 3), and calls for a Year-3 evaluation with a recommendation on statutory codification.
Recommendation 2. Identify two higher education institutions (e.g., business schools within universities and community colleges) to design a curriculum, pilot the program, and host a Colorado STA Summit.
The goal is to identify two pilot institutions — one urban, one rural or regional — to launch the STA Program curriculum and host an inaugural Colorado STA Summit. Example candidates include the University of Colorado Denver Business School, Colorado Mesa University, Pueblo Community College, Western Colorado University, and Fort Lewis College. The selected educational institutions should already have a focus on first-generation students, diverse students from Colorado communities, and non-traditional programs that support unconventional career paths.
In many cases, universities and community colleges may have existing small business courses that can be incorporated into the STA Program curriculum (e.g., accounting, marketing). Others may need to be developed, such as an introduction to acquiring a small business, small business strategies, and financing for small businesses (acquisition and operations). The two pilot universities/community colleges would conduct an assessment and return to OEDIT with a proposed curriculum track, including what already exists and the gaps to be filled.
The STA Summit would be a requirement for the selected universities and community colleges. The Summit should be a collaborative effort with key players to determine whether it should be hosted in one city or two as part of the pilot, or held in conjunction with the Rocky Mountain ETA Conference.
Recommendation 3. Map and evaluate the financial resources available to support the new small business owner in the succession plan.
New owners taking over an existing business can generally finance the purchase through a combination of SBA 7(a) debt, seller financing, and outside equity, layered with Colorado’s CDFI lenders (Colorado Enterprise Fund, B:Side), state credit-enhancement programs (Cash Collateral Support, the Colorado Revolving Loan Fund), and community bank and credit union SBA lending. The STA Program should map these resources across the federal, state, CDFI, and depository levels to align them around succession transitions and identify where a targeted state intervention would fill the financing gap.
After the evaluation, if additional tax incentives or financing programs are required, OEDIT should develop recommendations and work with the Colorado House Business, Labor, and Technology Committee. Additionally, funding ideas and recommendations should be coordinated and developed with the Governor’s office.
Recommendation 4. Connect and collaborate with Colorado SBDCs, local chambers of commerce, and city economic development teams.
Working and collaborating with local businesses and development centers is essential during the first year and then ongoing. In Year 1, the Governor directs OEDIT to work in partnership with credible sources (e.g., SBDCs, local chambers of commerce, and city economic development departments) to identify the owner(s) name, business type, location, planned time for succession (e.g., within 12, 24, 36, 48, etc. months), and preferred succession plan (e.g., family member, a general sale and acquisition process, or business ownership transfer through a structured program to a recent college graduate).
A critical objective is to educate local business and economic development centers about the STA Program, identify potential candidates, and host succession-planning seminars. Small business owners attending the seminars become prime targets for the STA program and can serve as key stakeholders in its early development and implementation.
As part of this effort, OEDIT should leverage its existing co-op and employee ownership programs designed to assist with succession planning. The work needs to be complementary and collaborative.
Recommendation 5. Evaluate the STA Program outcomes and recommend next steps for the Governor and state legislature.
As the three-year pilot program concludes, OEDIT publishes a formal program evaluation with a recommendation to scale, modify, or expand. A successful pilot positions Colorado as the national model for connecting the next generation of business owners with the legacy businesses that need them.
Key metrics for evaluating structural change are simple to measure: fewer businesses closing, more businesses transferring, and more graduates on a path to own an existing small business. Within the three-year pilot, other KPIs include:
- 100 students in the STA Program curriculum across a minimum of two higher education institutions.
- 150 small businesses interested in learning about STA and connecting with enrolled students.
- Year 3 target: 25 in-process ownership transitions.
At the end of three years, the STA Program should be evaluated, with recommendations for moving forward.
Conclusion
The cost of waiting is concrete: businesses close, jobs disappear, communities weaken, and graduates remain underemployed. Today, 42% of recent college graduates are underemployed, working in jobs that don’t require their degree. At the same time, Colorado’s small businesses generate more than $225 billion in annual economic output, a foundation now at risk as a generation of owners approaches retirement. We cannot afford to lose our young talent to underemployment, nor to let the value small businesses create slip away for want of a succession plan.
The cost of acting is far smaller: a pilot program that connects two assets Colorado already has — its higher-education institutions and its legacy of small businesses — and builds a bridge between them. New undergraduates gain the chance to learn a business and, in time, to own it; aging owners gain a ready-made succession plan and a capable successor. It is an ideal match: one that preserves the state’s economic foundation while keeping our next generation of talent rooted in Colorado’s opportunity.
Initially, the program would be designed for undergraduate students. The primary reason: it is expected that an undergraduate student would spend 3-5 years as an apprentice in the small business. The process would be:
- Students enroll in the STA Program curriculum. By enrolling in the track, they indicate their interest in eventually owning a small business.
- In their senior year, the students will identify the types of small businesses they would like to pursue as a career. Information will be shared on the types of businesses that have expressed interest in working with a student.
- A capstone project during the last semester before graduation is to complete a co-designed project with a small business owner. By doing this, the small business owner and the student could determine whether they could work together.
- Before graduation, a match will be made, and a succession agreement will be signed by the owner and the student, outlining expectations and potential outcomes.
- When the student begins work at the small business, they should receive a mutually agreed-upon salary and stock ownership plan.
- In the two years before the small business owner retires, the new owner (i.e., the former student) develops a financing plan to acquire the business.
- The new owner takes over the business as the succession plan ends.
Succession through apprenticeship occurs over a three- to five-year period.
ETA has a strong, well-documented record, mostly above Main Street. The 2024 Stanford GSB Search Fund Study, covering 681 funds since 1984, found that about 57% of searchers successfully acquire a company, with an aggregate pre-tax internal rate of return of 35.1%. Programs at Wharton, Chicago Booth, and Darden have built durable pipelines around the model.
Two caveats matter for Colorado. First, traditional search funds target mid-market companies — with a median acquisition enterprise value near $8.8 million — not the corner businesses at the center of the succession crisis. Second, the model centers on young entrepreneurs backed by mentorship and capital, but typically by experienced MBAs rather than undergraduates.
The STA Program’s job is to adapt a proven mechanism to a smaller deal size and an earlier-career operator, which is precisely why structured curriculum, vetted matching, apprentice-based learning, and a tailored financing pathway are essential rather than optional. Undergraduate students would begin working in the small business as apprentices to learn the business and gain the necessary expertise and knowledge.
Because for many owners, those other doors are already closed. The Exit Planning Institute finds that 70% of owners would prefer an internal transfer, and a new graduate joining the business as an apprentice can fill this preference. In a large share of cases, no family member wants the business, and the owner has no clear succession plan. That’s who the STA Program is built for: the owner staring at closure because the obvious successors don’t exist.
The STA Program doesn’t compete with family or employee transfer. It catches the businesses that those paths leave behind and gives a prepared, vetted graduate a reason for the owner to pick continuity over a liquidation sale.
During the last two years or so, Colorado has developed an ETA ecosystem, concentrated on the Front Range. CU Boulder’s Leeds School, through its Deming Center for Entrepreneurship, is building ETA courses, an executive-education program, and the Rocky Mountain ETA Conference, whose inaugural event drew more than 200 attendees in partnership with Colorado State University, the Colorado School of Mines, and the Denver ETA Meetup. The University of Denver’s Daniels College has added ETA to its Entrepreneurship@DU offerings, launching a one-credit ETA “sprint” for undergraduate and graduate students in early 2026. In short, the model has momentum here.
That activity and the STA Program serve different people, different businesses, and a different transaction. Colorado’s existing ETA is a graduate, MBA, and executive-education offering built on the search-fund model: A buyer with capital and operating experience raises money, searches for a target, and acquires an established business — often mid-market, and typically financed through a mix of SBA loans, seller financing, and outside equity. The STA Program is an undergraduate, apprenticeship-first pathway aimed at Main Street. A student works inside a small business for three to five years, learns how it runs, and transitions into ownership through a planned succession. Put simply, ETA is buy-then-operate; STA is apprentice-then-own. The apprenticeship model, along with the Main Street succession segment it serves, is uncontested.
That makes the STA Program complementary rather than competitive. The current ETA scene is buyer-side and skews toward businesses large enough to support a search fund and acquisition debt. STA addresses the other end of the market — the Main Street businesses that today close for lack of any buyer, and the graduates shut out of a thinning entry-level job market. It also creates natural partners rather than rivals. The annual Rocky Mountain conference is a ready-made channel for the STA Summit and its advisor network; and the SBA lenders and CDFIs already active in ETA can finance STA transitions.
The takeaway for timing: Colorado’s ETA momentum validates the demand behind STA rather than undercutting it. Capital, talent, and institutions are already mobilizing around the Great Ownership Transfer, but on the buyer side and the mid-market, leaving the undergraduate-to-owner pipeline and the Main Street succession gap unserved. The STA Program is the missing complementary piece, and building it now lets Colorado lead the full model rather than just the search-fund slice.
The three-year pilot is estimated to cost an estimated $350,000, funded from existing OEDIT economic-development and Future of Work funds rather than new appropriations. Planning estimates:
- Curriculum development seed, two institutions (Years 1–2): $105K–$220K.
- OEDIT program coordination, part-time (Years 1–3): $50K–$75K.
- STA Summit state backstop (Year 1; sponsor- and exhibitor-funded thereafter): $25K–$30K.
- Independent evaluation (Year 3): $20K–$25K.
That puts the full pilot at roughly $200K–$350K over three years. Only if the pilot meets its targets does the program seek multi-year legislative appropriation.
A collaborative funding model should be pursued. The selected universities and community colleges should invest in curriculum development, as it would be a key differentiator for the institutions in attracting students interested in small business ownership. Additionally, seminars and workshops could be hosted for existing small business owners (e.g., succession planning, financing an ownership transfer, mentoring business leaders).
It connects them; it doesn’t copy them. Each existing resource solves one piece and stops at the edge of the next. The SBA finances acquisitions but doesn’t train buyers or find sellers. The SBDC advises owners but doesn’t supply a pipeline of prepared successors. Private exit planners serve owners who can already afford them — a narrow slice of Main Street. None of them does the one thing that STA does: build the buyer pipeline and the matching marketplace that makes the rest usable.
The STA Program is the connective tissue, and every participant it produces becomes a customer for the SBA, SBDC, and exit-planning tools already in place. It increases the throughput of existing programs rather than competing with them.
The Colorado Succession Through Apprenticeship Program would turn two problems into one solution: a state-coordinated pipeline that trains graduates to evaluate and operate existing businesses, then connects them to owners ready to show them the ropes and eventually hand over the keys.
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