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Industry News

Agency touts push to attract investment

By Don Mecoy
The Oklahoman
December 17, 2005

An agency born at the end of Oklahoma's oil bust with the aim of invigorating investment in state business projects celebrated a $100 million milestone Friday.

The Oklahoma Capital Investment Board, which supports investment in venture capital firms that sink money into fledgling state companies, has attracted $100 million in venture capital to Oklahoma business projects.

Board President Devon Sauzek said for every dollar the board invests in venture capital funds, $2 must be invested in state companies. Since 1993, the board has invested about $40 million in 16 venture capital funds, Sauzek said.

While those funds invest in individual companies at various stages of development, Sauzek said the board evaluates the past performance and philosophy of a fund before writing a check.

"We're wholesalers, not retailers," he said.

The board's investments have helped establish and grow state-based companies, boosted the number of venture investment professionals to the state and assisted small businesses, Sauzek said.

"Venture capital is critical to the growth of many young companies, particularly those commercializing advanced technologies," Sauzek said. "Our job is to seek out groups that demonstrate a successful investment track record, a strong strategic fit with Oklahoma investment opportunities and a solid plan for being accessible to Oklahoma entrepreneurs."

The board's funding comes from a line of credit backed by $100 million in state-issued tax credits, Sauzek said. The board's successful investments have been adequate to service its debt, and none of the tax credits has been sold, he said.

"We invest in a wide range of funds, and we diversify over time," Sauzek said. "We have basically a portfolio of investments. Some perform well; some don't perform as well. The ones that perform well will cover the ones that don't."

Among the successful ventures was a 1994 investment in Intersouth Partners III, a $26 million early stage technology fund based in North Carolina. The fund later opened an Oklahoma office, and recruited former state Commerce Secretary Greg Main to be the firm's Oklahoma partner. Main now leads I2E, Oklahoma's center for technology entrepreneurs.
Main said Oklahoma has made huge strides in recent years in attracting venture capital to the state.

"We are on the radar screen," Main said. "More Oklahomans are familiar with investing venture capital, and with how to structure deals to be appealing to equity investors as a result of the OCIB (Oklahoma Capital Investment Board) program."

The board expects to commit about $10 million to venture groups in the next year, Sauzek said. The board also has supported more than $38 million in development loans to more than 1,300 small Oklahoma companies.