An­gel in­vestors launch home­grown ven­ture fund for high-tech star­tups

Project seeks to pump cap­i­tal into early-state com­pa­nies around NM

Albuquerque Journal - - BUSINESS - BY KEVIN ROBIN­SON-AVILA JOUR­NAL STAFF WRITER

Three of New Mex­ico’s prom­i­nent an­gel in­vestors are launch­ing a new, $4 mil­lion ven­ture fund to pump early-stage cap­i­tal into high­tech star­tups around the state.

New Mex­ico An­gels Pres­i­dent John Chavez, Vice Pres­i­dent Do­rian Rader and board mem­ber Sher­man McCorkle are part­ner­ing to­gether to launch the new NMA Ven­tures, which will in­vest be­tween $200,000 and $400,000 in eight to 10 star­tups over the next three years.

The en­tity will op­er­ate as an in­de­pen­dent fund for eq­uity in­vest­ments, sep­a­rate from the NM An­gels, which pools the re­sources of about 70 in­di­vid­u­als to pro­vide seed and early-stage cap­i­tal to com­pa­nies. But NMA Ven­tures will work closely with an­gel mem­bers who want to co-in­vest in star­tups along­side the fund, said Rader, who will step down as An­gels vice pres­i­dent to be­come man­ag­ing part­ner of NMA Ven­tures.

Rader, 30, will be the youngest ven­ture fund manager in New Mex­ico and only the sec­ond fe­male leader of a lo­cally based fund.

“We’ll share our deal flow with the NM An­gels to work to­gether on in­vest­ments,” Rader said. “The fund will pro­vide another chan­nel to of­fer more cap­i­tal to promis­ing star­tups.”

The part­ners will close on the fund in Jan­uary. They’re rais­ing $2 mil­lion in pri­vate eq­uity, while also ap­ply­ing for $2 mil­lion in match­ing cap­i­tal from the state’s new $20 mil­lion Cat­a­lyst Fund, which launched early this year to help fi­nance early-stage ven­ture funds around New Mex­ico.

The fund will fo­cus on high-tech star­tups across the state, but it will ex­clude life sci­ence tech­nol­ogy to avoid over­lap with another lo­cal fund, Tramway Ven­ture Part­ners, which has al­ready re­ceived Cat­a­lyst back­ing for in­vest­ments in bio­science star­tups.

“Apart from life sci­ences, we’re pretty ag­nos­tic about what we’ll in­vest in,” Rader said. “If pos­si­ble, we’d like to spin out new in­no­va­tions from New Mex­ico’s na­tional labs and re­search uni­ver­si­ties.”

The fund aims to fill the early-stage cap­i­tal gap in New Mex­ico. That’s crit­i­cal for star­tups to tra­verse the fi­nan­cial ravine known as the “val­ley of death,” where emerg­ing com­pa­nies need a small amount of cap­i­tal to fur­ther de­velop and prove their tech­nolo­gies be­fore larger, in­sti­tu­tional in­vestors are will­ing to back them.

“It’s of­ten much eas­ier for a more ad­vanced startup to get $25 mil­lion in eq­uity fund­ing than sev­eral hun­dred thou­sand dol­lars needed by an early-stage ven­ture,” McCorkle said. “We’re po­si­tion­ing our­selves in that spot where the great­est need is in New Mex­ico.”

The fund will also strengthen the ca­pac­ity of lo­cal an­gel in­vestors, who some­times can’t raise enough in­di­vid­ual in­ter­est to pool suf­fi­cient re­sources for star­tups.

“In some cases, we’ll work with the an­gels to still pro­vide those com­pa­nies with re­sources to move for­ward,” Chavez said.

Sher­man McCorkle

John Chavez

Do­rian Rader

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