Oklahoma’s model for developing venture capital is working

Scott Meacham
Copyright © 2017, The Oklahoma Publishing Company

Selexys was one of the top five largest mergers and acquisitions of U.S.-based companies in the fourth quarter of 2016. That deal and the sale of WeGoLook are proof positive that Oklahoma’s strategy of public/private venture capital funds works.

When the recent fourth-quarter and full-year MoneyTree Report came out, I got a little hot under the collar. MoneyTree reports trends in financing to U.S. venture capital-backed companies.

The report does not include in its analysis funds that had public money in them, so none of the i2E/OCAST deals counted in this report — and that doesn’t reflect the power and the impact of what’s really going on in this state when it comes to capital invested in startups and growth stage companies.

In fiscal year 2016, through the Technology Business Finance Program, Oklahoma Seed Capital Fund, and Accelerate Oklahoma! Fund, i2E committed more than $4.5 million in investment funding to 20 companies. Through the statewide SeedStep Angel group of 54 individual investors that i2E manages, an additional $2.2 million was invested in 12 different companies.

i2E’s portfolio of Oklahoma-based companies has attracted $590,762,531 in private investment from banks, venture capital funds, angel investors, and other strategic investors.

And now I’m going to get on my soap box.

Oklahoma was born out of an entrepreneurial spirit. (They don’t call us Sooners and wildcatters for nothing). Taking chances and going after what we want is in the DNA of our state.

But when it comes to advanced technology startups — spinning out technology, supporting entrepreneurs, and investing in IT, biotechnology, and advanced manufacturing, the environment here isn’t like California or Massachusetts. Or New York, Illinois, or Washington, or even Colorado.

And it isn’t going to be. Oklahoma is Oklahoma.

Historically there hasn’t been much seed stage venture capital here — in fact, for decades there wasn’t any. As a state, we had to build our own. And that’s what we did.

Thanks to the enduring vision at the foundation of the Oklahoma Center for the Advancement of Science and Technology, we have created the Oklahoma version of startup capital. Yes, it includes state funding. Since we don’t have mega-million-dollar venture capital funds here, based by legions of cashed-out entrepreneurs, we have to find another way.

What we do have is a determined focus to invest state resources (and we ought to invest more) to supply a continuum of critical capital to Oklahoma startups. It’s working — and people outside our state are taking notice — of our fine young companies and of the deal opportunities.

We do things our way in Oklahoma. We have a capital model that is working better with each passing year for our state’s startups. The state’s investment through OCAST and i2E is at the core of our success.

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 support from the Oklahoma Center for the Advancement of Science and Technology and is an integral part of Oklahoma’s Innovation Model. Email Meacham at i2E_Comments@i2E.org.