Ever since the dot.com bubble burst, Oklahomans have been determined to build our own innovation economy — an economy that is diversified from our traditional reliance on oil and aerospace.
We are doing a good job of starting up high-growth companies in new sectors.
We've tackled the problem of access to startup capital through two state supported funds managed by i2E that provide proof-of-concept and seed stage capital. SeedStep Angels, an investor network we have developed of about 30 successful Oklahomans, provides additional capital and mentoring to entrepreneurs.
i2E has also teamed with the Oklahoma Department of Commerce and the U.S. Treasury Department to offer a fund that helps take established companies with products and revenue to expand into new products and services, allowing for growth in revenue and employees.
In all, we've served more than 560 new companies; our efforts are yielding dollars and jobs. The Oklahoma Department of Commerce reports that the economic impact of just 11 of the Oklahoma companies who received $4.5 million in seed funding from i2E have had a direct economic impact of $37.3 million with additional indirect impact of $11.8 million.
The national failure rate for small business startups is more than 50 percent in four years. Companies funded by i2E see a much better success rate with more than two-thirds making it past the four-year mark.
And that brings us to our state's next challenge in creating a thriving, sustainable innovation economy.
We have built a nationally recognized model for launching new companies. Now we need to become very proactive about anchoring these young, successful companies in our state. We already have so much going for us. We are business friendly. We have an attractive cost of living and talented graduates of our fine colleges and universities.
What we don't have is the later stage investment capital to build out these new companies.
The limited private funding we do have for later stage growth tends to prefer established businesses.
Strategically, we need to create a later stage fund to keep the companies that are accelerating jobs and revenue from leaving Oklahoma when venture capital funds from cities like Austin with hundreds of millions to invest seek to cherry pick them away.
More than a decade ago, the State of Oklahoma had a vision and stepped up to become the catalyst for early stage investment capital here. Without our state's involvement, that capital wouldn't exist today.
We need our state to be proactive again.
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 i2E_Comments@i2E.org.
DID YOU KNOW?
i2E-assisted companies experienced 39 percent job growth in FY2013 with an average wage of $70,643, compared to 1.3 percent job growth statewide and an average wage of $37,246.