For years, Nebraska faced challenges in trying to create a financial landscape such that homegrown startup companies could receive venture capital.
Major investors on the two coasts showed no significant interest in prairie-country investments. Nebraska startups struggled to win recognition when so much attention was going to the high number of advanced-technology startups in states such as California and Massachusetts.
Meanwhile, efforts within Nebraska to nurture a startup capital ecosystem proved slow going. The state had individual investors, but there was no momentum for creating a vibrant overall investment structure. Invest Nebraska, a publicly funded nonprofit created in 2002 to help startup companies, was a modest enterprise. The University of Nebraska was only in the early stage of building up its research/commercialization efforts.
But that’s Nebraska’s past. These days, things are changing in a big way.
The hard work and vision by Nebraska entrepreneurs, investors, university leaders and state officials are beginning to pay off. The latest numbers prove it.
The World-Herald’s Cole Epley reports that during 2013, at least 23 Nebraska-based startups attracted around $43 million in investments.
Plus, Epley reported, “At least 11 venture capital firms from outside of the state — hailing from places like New York City, Chicago and Silicon Valley — placed bets on local companies with high growth potential. With out-of-state angel investors, these firms contributed to at least seven deals worth a combined $19.3 million last year.”
Nebraska has moved ahead on the venture capital scene thanks to hard work on several fronts:
>> Entrepreneurs: These days Nebraska can boast of respected companies and entrepreneurs in such areas as innovative software and medical technology, and that has gotten notice from out-of-state investors.
To cite a few examples: Gaming-software entrepreneur Ben Vu (himself now an investor/mentor). Software-marketing expert and former Husker linebacker Blake Lawrence. MindMixer, a civic engagement startup. ScanMed, focusing on MRI technology. Virtual Incision, using miniature robotic instruments to aid during surgery.
>> Investors: Nebraska now has an impressive, growing set of in-state investors, acting as individuals or jointly. Firms such as Dundee Venture Capital and Treetop Ventures are among the key figures on this front.
In addition, Nebraska investor/mentors have formed a high-energy collaboration at the state level (Nebraska Angels) and are active in a regional one (Pipeline).
These efforts, plus events such as the annual Big Omaha gathering, are demonstrating to the rest of the nation that Nebraska is ready for prime time.
>> State investment strategy: In 2011, state leaders created the Nebraska Innovation Fund, strengthened Invest Nebraska and adopted an improved overall strategy for helping startups.
Legislative Bill 1114, sponsored by Sen. Heath Mello, would extend the 2011 venture capital law and has been named a committee priority bill by the Legislature’s Appropriations Committee.
>> University vision: The University of Nebraska and Creighton University are doing forward-looking work in converting their scientific research into marketable services and products.
Among leading examples are Trak Surgical (from the University of Nebraska Medical Center) and Virtual Incision (a collaboration of UNMC and the University of Nebraska-Lincoln).
NU campuses are installing entrepreneurs in residence to help faculty understand the commercialization process. At UNMC, entrepreneur Gary Madsen worked with nanotechnology scientist Vinod Labhasetwar to develop the startup ProTransit Nanotherapy. At UNL, entrepreneur Brian Ardinger spearheaded creation of NMotion, a mentoring/financing program to aid Nebraska startups.
Through the efforts of all these individuals and organizations, Nebraska is showing that, relative to its size, it is a go-getter when it comes to startups and venture capital.
This is a major step forward for the state. The results should pay off in the form of healthy dividends for Nebraska’s future.