By Scott Meacham
Copyright © 2014 The Oklahoma Publishing Company
SeedStep Angels network was founded in 2009 and began making investments in 2010, and i2E manages the group.
With chapters in Ardmore, Muskogee (the newest), Oklahoma City, and Tulsa, SeedStep has grown to more than 45 members across the state.
Even better news is that the group has closed 32 investment rounds with a total of 66 checks being written. SeedStep Angels has screened more than 80 deals and invested $5.37 million. Computer software and biopharma companies dominate the portfolio.
SeedStep Angels came into being as a way to narrow the capital gap in Oklahoma for early stage companies — a shortfall that isn’t likely to go away any time soon since there simply isn’t much early stage venture investment in this state.
Last year, only about $8 million in venture capital was invested in Oklahoma. Comparing to other states, we’re still in the bottom 10. Our neighbors continue to outpace us: Nebraska ($11 million), Kansas ($30 million), Colorado ($414 million) and Texas ($1.3 billion).
That’s why SeedStep Angels network is such a key element in the continuum of early stage capital (along with the Oklahoma Seed Capital Fund and the OK Angel Sidecar Fund) that is so critical to Oklahoma’s wealth and job creation scene.
SeedStep Angels creates an efficient way for accredited individual investors to diversify their investments to include early stage companies. Over the past few months, sophisticated investment groups such as Titan Properties LLC of Tulsa also have become members of the network.
The Titan Properties example is interesting. Titan specializes primarily in commercial real estate development and acquisitions with some oil and gas and small business investments. The firm was interested in allocating some assets to high growth, early stage companies. Titan joined SeedStep Angels for the opportunity to consider deals that are vetted by a team of experts in early stage investments.
In Titan’s words, “i2E doing the heavy lifting on due diligence and underwriting and this platform gives us exposure to deals that might be impossible for us otherwise.” Titan also likes the transparency of the due diligence and the availability of the i2E staff when Titan is doing further diligence on a SeedStep deal.
For sophisticated investment groups, co-investing with i2E and the minimum investment threshold of $25,000 per deal adds to the value proposition of investing in SeedStep Angel deals.
It would be great if the venture capitalists would start flying here instead of to Denver or Austin. But until they catch on to the innovation that’s bubbling here, farsighted Oklahomans are writing checks and filling the gap.
Scott Meacham is president and CEO of i2E Inc., a nonprofit corporation that mentors many of the state’s technology-based startup companies. i2E receives state appropriations from the Oklahoma Center for the Advancement of Science and Technology. Contact Meacham at [email protected]
Did You Know? In the first quarter of 2014, 75 percent of angel deals were completed in the angel groups’ home state. This is reasonably consistent with prior quarters. SOURCE: Halo Report Q1 2014