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Industry News

Oklahoma Capital Investment Board hits $100 million

by Brian Brus
The Journal Record
December 21, 2005

OKLAHOMA CITY - The Oklahoma Capital Investment Board crested a $100 million peak this month by way of the Oklahoma Equity Partners Fund and a local medical technologies development company, officials said.

The milestone represents more than 13 years of efforts to attract private venture capital industry to Oklahoma. Since the board's creation by the state Legislature, it has supported investment in 16 venture capital funds that led, in turn, to more than $100 million in business investments in Oklahoma economic development.

The investment vehicle that put the board over the $100 million mark resulted in the establishment and further growth of Inoveon in Oklahoma City near the University of Oklahoma Health Sciences Center complex, OCIB President Devon Sauzek said.

Inoveon develops commercial technology to detect and monitor eye diseases. The company completed its 40,000th iScan retinal imaging study earlier this year using a proprietary three-dimension digital eye scanning system that will help improve the management of patients' diabetic retinopathy.

Sauzek said it was easy to track how much the board was taking in because it invests in private-venture capital partnerships rather than investing directly in individual companies, on the basis that risk capital should be provided by qualified, professional investors instead of falling on the public's shoulders. For every dollar the board puts in, the private sector must provide two.

"When they invest in a company like Inoveon, they syndicate those deals and bring in other investors for the opportunity under the same terms," he said.

"Venture capital is critical to the growth of many young companies, particularly those commercializing advanced technologies. 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."

Other projects in which the board has been involved include investing in Emergent Technologies Inc., an Austin-based investment firm that specializes in finding groundbreaking technologies at OU and building new companies around those discoveries. Emergent is a pre-seed investor, which means it often puts its stake down before a company is even formed. Emergent has made five investments in Oklahoma. One example, Hyalose, was formed to commercialize a new technology for producing hyaluronic acid through a recombinant method designed by OU professors Paul DeAngelis and Paul Weigel.

"Without an organization like OCIB, some of the current Oklahoma City biotech company success stories would not have occurred," Weigel said. "One of the most difficult hurdles for new companies - anywhere in the U.S. - is obtaining early-stage venture capital that allows them to develop their technologies for real market applications. … We were able to pay operating costs and patent expenses during a critical early period because of the OCIB investment in the Emergent-Oklahoma fund."

The board has supported more than $38 million in development loans to about 1,300 small Oklahoma companies.

And the board also was called upon this year to help the state entice the New Orleans Hornets to relocate to Oklahoma City. The board worked with Oklahoma City government and private investors, each of which agreed to share a third of the $10 million commitment to the team should revenues for the sport season fall short of $40 million.

Brian Brus reports on metro area government, finance, agriculture and other issues. You may reach him by phone at (405) 278-2837 or by e-mail, brian.brus@journalrecord.com.