Colorado Court Hands Partial Victory to Entrepreneurship

Date: June 04, 2020

Case remanded to trial court for further resolving

Contact: Tony Gagliardi, Colorado State Director, [email protected],
or Tony Malandra, Senior Media Manager, [email protected]

DENVER, June 4, 2020—The state’s leading small-business association applauded with one hand a Colorado Court of Appeal decision today in the case of Chan v. HEI Resources.

At issue is the simple question: Should the lack of industry-specific experience bar entrepreneurs from participating in enterprises unrelated to what they know or do?

In an amicus brief filed last year by NFIB, the nation’s leading small-business association, argued that “Colorado law should be clarified to reflect the truth that sophisticated and experienced business people can frequently participate meaningfully in the operation of a business without prior specific experience in that business’s particular industry segment. This business reality is borne out with a number of America’s most famous executives. Smart business people are not only able to successfully participate in ventures outside their prior experience, they are able to use their general business acumen to create entirely new industries. Jeff Bezos of Amazon is but one example.”

Commenting today, Tony Gagliardi, NFIB’s Colorado state director, said, “We’ll wait to clap with both hands when this issue is finally resolved, but today’s appeals court ruling does give us hope that sanity will be restored.”

In its ruling today, the court wrote, “A division of the court of appeals holds that when deciding whether an ostensible general partnership interest in a venture is a security under the Colorado Securities Act, the court must employ a strong presumption that it is not. The division also holds that when determining whether the general partners have sufficient experience with or knowledge of business affairs that they can intelligently exercise their partnership powers, venture-specific experience or knowledge should not always be regarded as required: general business experience and knowledge may be sufficient … the case is remanded to the trial court to redetermine whether the joint venture interests are investment contracts under the second and third Williamson tests, consistent with the views stated herein. We acknowledge the trial court’s commendable efforts in this case. And we acknowledge that it likely frustrates the court to be instructed to do one thing and then be told to do something else. But we have a duty to independently examine the appeal’s merits notwithstanding the prior division’s decision. Doing so leads us to conclude that the trial court must once more resolve the threshold issue of whether the interests in the joint ventures are investment contracts.”

Related Information

Feb. 27, 2019 News Release—Colorado Court Case Seeks to Free the Next Jeff Bezos

Keep up with the latest Colorado small-business news at or by following NFIB on Twitter @NFIB_CO or on Facebook @NFIB.CO


NFIB is the voice of small business, advocating on behalf of America’s small and independent business owners, both in Washington, D.C., and in all 50 state capitals. NFIB is a nonprofit, nonpartisan, and member-driven association. Since our founding in 1943, NFIB has been exclusively dedicated to small and independent businesses and remains so today. For more information, please visit

NFIB Colorado
1700 Lincoln Street, 17th Floor
Denver, CO 80203
Twitter: @NFIB_CO
Facebook: NFIB.CO

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