There is an old joke in the economic development community that the first source of funding for a new technology-based business venture is “friends, family and fools.”
In today’s turbulent economic times, the capital supplied by the “three Fs” might not be enough to carry a new tech venture to the point where it begins generating revenue.
Or maybe the business is generating sales, but needs capital to scale up and grow to the next level.
Who are you going to call?
In Oklahoma, there are several sources of state-backed funding for technology-based entrepreneurs, including programs funded through the Oklahoma Center for the Advancement of Science and Technology.
OCAST is the state’s technology-based economic development agency. It offers 11 programs designed to move new technologies from concept to commercialization. These programs put more than $20 million each year into the hands of Oklahoma researchers and advanced technology businesses to help develop their technologies.
As its not-for-profit affiliate, i2E manages three of those programs for OCAST. We provide commercialization services for Oklahoma entrepreneurs, helping them develop their business plan, introducing them to investors and providing critical capital.
A key component of the state-backed funding is the OCAST Technology Business Finance Program, which provides proof-of-concept funding of $100,000 to businesses that must match that amount from other sources.
i2E also manages the state-backed Oklahoma Seed Capital Fund, which invests in Oklahoma technology businesses and brings in added capital from co-investors. In its first year of existence in 2008, the Seed Capital Fund and co-investors approved funding of more than $17 million for seven Oklahoma ventures.
i2E is also in the process of creating a new angel fund and the SeedStep Angel group that will be a critical source of funding for Oklahoma Ventures. These angel investors are high net worth individuals willing to back early stage businesses with their own dollars.
Finally, a new source of capital is the $150 million state-funded EDGE Endowment, which was created by the legislature to build Oklahoma’s technology-based economy by providing funding for research and tech-based ventures that show promise for creating new jobs.
Managed by the EDGE Policy Board, $12 million from the endowment was awarded to five Oklahoma projects in the first round of funding last year.
That adds up to many sources of support and funding for Oklahoma’s tech-based entrepreneurs. So don’t despair when your network of “friends, families and fools” has dried up. Oklahoma is creating the programs to help bridge the gap. ?
Tom D. Walker is president and CEO of i2E Inc.