By Scott Meacham
Copyright © 2015 The Oklahoma Publishing Co.
CB Insights is a National Science Foundation-backed company that zeroes in on data about emerging companies and disruptive technology trends. The firm’s recent Midwest Tech Report gives a comprehensive look at what’s happening in early stage investing in this region.
When you are in the business of increasing the number of new, sustainable advanced technology businesses, as we are at i2E, there are two top-line measures by which to assess our progress. Dollars and deals.
From 2010 to 2014, U.S. deals and dollars grew by 121 percent and 201 percent respectively. At $31 billion in funding and 3,013 deals, the first half of 2015 has already surpassed all of 2010 and is running well ahead of the 2014 pace. This is good news nationally.
In the Midwest, the results are mixed. Annual funding is growing steadily at 25 percent-plus. But, while Midwest deal activity has more than doubled since 2010 (averaging 200 deals per quarter versus 94 deals in 2010), deals are trending flat this year over last.
Historically investment capital has been a big challenge in Oklahoma, but we’ve narrowed the capital gap.
i2E manages a continuum of capital funds, and SeedStep Angels, with more than 50 members, was named in the 2015 2Q Halo Report: Geography Edition, a national survey of angel group investment activity, as one of the three (No. 2 on the list) angel groups in the Great Plains region that closed the most cumulative deals between 2010-2015.
SeedStep Angels has invested more than $7.5 million in more than 30 companies. One of those, Tailwind, was recognized in the CB Insights report as one of the top five notable early-stage companies in the Midwest.
This is huge as CB Insight’s ranking is based on an algorithm and framework that assess the overall health and growth potential of private companies in three categories: momentum, market and money.
Having an Oklahoma company like Tailwind called out by CB Insights is inspiring — to Oklahoma investors and to other entrepreneurs. Having SeedStep Angels recognized as a top deal closer in the Midwest is further validation that all the deals and dollars in this region don’t have to be dominated by Austin, Texas, or Chicago.
A state can’t have deals without investment capital, nor investment capital without deals. Now that we are growing our sources of investment capital, we need even more opportunities to put that money to work. Oklahoma ranks 12th of 15 Midwest states in terms of the number of deals.
So the question that all of us need to be asking is what can we do to create an environment that produces more investable deals?
Stay tuned for more about that over the coming weeks.
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].