i2E-managed funds step into venture capital void for Oklahoma startups

The national supply of venture capital investment has declined 32 percent since 2006.
Published: April 2, 2013
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There used to be a lot of discussion about the necessity and appropriateness of state-funded and directed venture capital programs.

That was before the burst of the dot.com bubble and the impact of the 2008 global financial crisis drove down investment in private sector venture capital funds.

Since 2006, the national supply of venture capital has declined 32 percent. A recent report for the U.S. Treasury Department states that the United States has “the lowest pool of venture capital available to high potential businesses in at least fifteen years.”

The impact of this decline on economic growth is significant. A study by the National Venture Capital Association attributes 11 percent of the total U.S. private sector jobs to companies that had venture capital investment during development and growth stages.

Furthermore, more than 60 percent of the nation's remaining venture capital under management is based in two states — California and Massachusetts. Not surprisingly, that's also where more than 60 percent of venture capital investments occur.

For those of us who aren't on either coast, today's reality is that we have to find local, non-venture capital sources of steadily and readily available risk capital.

Without that kind of investment, we can't build the robust pipeline of new company starts that we need to create the next batch of startup “gazelles.”

In Oklahoma, we are taking on the challenge of risk capital formation without the venture capital sources.

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DID YOU KNOW?

For every dollar of venture capital invested from 1970 to 2010, $6.27 of revenue was generated in 2012.

SOURCE: National Venture Capital Association

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