With no niche here investors fly over

BY DON MECOY Published: May 10, 2009
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he not-for-profit company that mentors many of the state’s technology-based startup companies, said Oklahoma must continue nurturing existing seed funds and angel investor funds that provide very early stage financing for companies. That funding precedes the investments from venture capital funds.

"You have to have a robust mechanism to build opportunities so they can come through that pipeline and then be attractive to venture capital,” Walker said.

Helping those early stage companies also could produce more homegrown venture capital, Walker said. He hopes a new $25 million to $50 million Oklahoma-based venture capital fund eventually will be established.

Outside venture capitalists want to know if local money also is being invested in the local business, Walker said. "By having a fund here, that can help attract outside capital,” he said.

Walker concedes that Oklahoma has a lot of catching up to do in the area of attracting venture capital, but he gives high marks to local efforts toward building an entrepreneurial infrastructure and targeting areas of local expertise.

"We can’t just say we need more venture capital,” he said.

"There’s a lot more to it than that.”

Times are tough
Heesen said the brutal economy has hit the venture capital sector hard, essentially shutting down the public offering market and limiting acquisitions that are the profit centers for the enterprise. But Heesen said many venture capitalists believe the worst is past.

"We’re scratching ourselves out of a hole; we’re not leaping out,” he said.

The good news is that entrepreneurs operating in this tough environment tend to be more realistic than many who pop up in the good times, he said.

Paiva said many of the world’s greatest companies were created during tough economic times.

"The industry is counter-cyclical,” Paiva said. "Although it’s a tough thing to do, when the economy is at its worst, it’s the best time to be investing. If you have the stomach for it and believe historical data, these are the times when great companies and wealth are created.”



Venture capital investments by region
FIRST QUARTER 2009

Silicon Valley…$1.2 billion

New England…$376 million

New York metro area…$323 million

Los Angeles/

Orange County…$207 million

Texas…$156 million

Northwest U.S.…$130 million

Midwest U.S.…$122 million

Southeast U.S.…$113 million

San Diego…$87 million

Colorado…$77 million

SOURCE: PricewaterhouseCoopers/National Venture Capital Association MoneyTree Report

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