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June 2008 StoriesCover StoriesCongressman Steve Pearce - A Sense for Business Congresswoman Heather Wilson- A Sense of Place Congressman Tom Udall - A Sense of History FeaturesHigh Energy Impact DepartmentsFrom the Editor |
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Venture Capitol By Mary Girsch-Boch
In early March, the National Venture Capital Association (NVCA) ranked New Mexico at the top of the list for fastest growing areas for venture capital funding outside of Silicon Valley and New England. In the years spanning 1997 through 2007, New Mexico venture capital investments saw an increase of 375 percent, with 2007 investments totaling over $128 million. Venture capital companies also funded a total of 21 companies in 2007, a whopping 650 percent increase. What does that mean for venture capital in New Mexico for 2008 and beyond? “You’ll see a lot of deals in 2008,” says John Chavez, president of New Mexico Angels, a firm that serves as an intermediary between its investor members and potential investment opportunities. In 2005, New Mexico Angels provided $135,000 in funding. In 2007, that number rose to $785,000. “In 2008, we’re already up to $425,000 in funding,” says Chavez, also an active investor, who clearly expects New Mexico Angels to exceed their 2007 funding totals. “We’re also looking to expand beyond Albuquerque and Santa Fe to have a statewide presence,” says Chavez, who earlier this year visited Roswell, Las Cruces and Farmington looking for investment opportunities. For Sherman McCorkle, president and CEO of Technology Ventures Corporation, a nonprofit founded by Lockheed Martin and based in Albuquerque, the NVCA ranking represents the efforts of a lot of people over the last 10 to 15 years. “The fact that the NVCA named New Mexico first in technology growth provides us with the kind of momentum that New Mexico can build on.” Gavin Christensen, a principal at vSpring Capital, a traditional venture capital firm with offices in both Albuquerque and Salt Lake City, UT, agrees. “I think 2008 will be a strong year, not just in New Mexico, but in the entire Southwest region.” So where will we see the biggest investments? “We will continue to see strong investment in New Mexico, particularly in the technology sectors, in which New Mexico is a global leader,” says Trevor Loy, managing partner of Flywheel Ventures, a seed and early stage venture capital firm with offices in Albuquerque, Santa Fe and San Francisco, California. These areas include renewable energy, water and other clean technologies, advanced materials and life sciences. Christensen agrees. “The big story for 2008 will be clean technology companies.” Christensen also notes that at this time, vSpring is actively looking to seed-fund clean technology deals for 2008. “2007 was a record year for New Mexico,” says Christensen, and he believes the momentum will continue through 2008 and beyond. Another reason why New Mexico figures so prominently in the NVCA rating can be attributed to the increase in venture capital investments made by the New Mexico State Investment Council. Since 2002, the council has invested over $32 million in various ventures around the state. In 2004, Governor Bill Richardson substantially increased the amount of money that the state permanent fund could invest in venture capital, with the stipulation that the venture capital firms maintain a local presence in the community and commit to funding New Mexico-based ventures. So how do fledging New Mexico entrepreneurs with the next great idea or invention get funding? vSpring requests a written business plan, along with the resumes of key management. TVC offers an online template where your business plan can be submitted for review. You’ll also need to describe your business briefly and include an executive summary as well. Flywheel Ventures offers investment criteria online and provides a link for submitting an executive summary for consideration. New Mexico Angels’ Web site includes information for entrepreneurs, including investment criteria, along with information on the submission process and detailed presen-tation guidelines. But with a slowing economy, is this the best time to take a gamble on new technology? “There’s a lot of uncertainty right now with the economy, but we focus on the long term,” says Christensen. “Things like fossil fuels will continue to be funded and will not be affected by a slowing economy.” “The biggest challenge to New Mexico will be the competitiveness of New Mexico in a global economy,” says Loy. “Even the earliest seed-stage companies in New Mexico need to be thinking about their competitiveness on the global stage. PHOTO CREDITS top, L to R: The MIOX Corp near Balloon Fiesta Park provides 60,000 square feet of space for the manufacture of MIOX’s advanced water disinfection systems and another 7,000 square feet of offices for over 60 employees, courtesy of MIOX Corp; System One: AltelaRainSM System on-site in Piceance Gas Basin of Colorado, courtesy Altela Inc.; Wellkeeper uses cutting-edge technology to provide petroleum well operators with real-time information over the internet, courtesy of Wellkeeper, Inc.; bottom far left: EFD Perspective Pro, courtesy of Aspen Avionics.
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