Stephanie Spong, Principal, Epic Ventures
Entrepreneurs looking for additional funding to launch or build a business have numerous options in New Mexico. Those with experience, skills and passion can choose from a number of potential sources of private-equity capital, whether they are “angel” or institutional equity investors. Determining which source to pursue depends largely on industry focus, business stage and the amount of money needed.
Tatjana Rosev, Los Alamos Nat’l Lab Communications Office
The most successful entrepreneurs recognize the benefits of networking with external experts — service providers, industry consultants, venture capitalists, business coaches and successful CEOs — when starting or building a company, especially when the economic forecast is uncertain and entrepreneurial confidence is at an ebb.
But there’s more to effective networking than passing out business cards and attending seminars to meet and interact with influential others. It also requires connecting with individuals locally and nationally who have a vested interest in helping entrepreneurs take their companies to the next stage.
Wise Counsel
Business coaching is a powerful, collaborative relationship between an entrepreneur and a coach/consultant who is more versed and better established in a particular industry or discipline than the business owner and has better access to human and financial resources. Being trained by a coach how to identify, evaluate and overcome obstacles to growth can help the entrepreneur achieve his or her goals faster and more effectively. Northern New Mexico Connect’s Springboard program offers free coaching to technology entrepreneurs in Northern New Mexico whose companies are at various stages of development.
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Looking for additional funding to launch or grow your business? If you have the experience, skills and passion, there are some potential sources of private equity capital available in New Mexico. Equity capital sources can be broadly placed into two categories: Angel investors and institutional equity investors. Determining which source to pursue is largely a function of three key factors: 1) industry focus, 2) business stage, and 3) amount of money you are raising.
Keep in mind that private and institutional investors back rapid-growth and scalable businesses in exchange for an equity position in the company. Companies must demonstrate high returns to their investors.
Angel Investors
An angel is an accredited investor who invests his or her own, personal capital in early-stage business ventures. Angels are often the bridge from the self-funded stage of the business to the point where a venture capitalist would be interested in investing. An increasing number of angel investors are organizing themselves into angel networks or angel groups.
The New Mexico Angels prefer seed and early-stage investments. They consider themselves generalists and will consider investing in a wide range of industries. Initially, they were focused on technology but they now consider non-technology ventures. Initial investment amount ranges from $100,000 to $500,000.
Institutional Equity Investors
Institutional equity investors, known as venture capitalists, are not listed here because they can be transitory. For example, when a fund is fully deployed, it transitions into maintenance mode in which the VC investors shift their focus from seeking new opportunities to maximizing the potential of the company that received its investment.
The New Mexico Finance Authority Venture Capital Program Fund was created by the New Mexico Legislature in 2022 to advance the economic development objectives of the state by making investments for start-up, expansion, product or market developments, recapitalization, or early-stage development. The New Mexico Legislature appropriated $35 million in 2022 and $15 million in 2023 to the NMFA Venture Capital program.
NMFA maintains a list of the venture private equity funds that it has invested in and updates the list when new funds are added.
Check the list and contact the funds if your venture meets fund guidelines.
For definitions of the various stages of business development, see the glossary on the Finance New Mexico website.
The following article offers a historical perspective on the Finance New Mexico project.
As New Mexico’s lieutenant governor, one of my highest priorities has been to support small businesses throughout the state. I’ve owned a small business and know the challenges that confront people like me – particularly in finding the money and getting well-founded advice on how to start and maintain a business. The largest chunk of the business community is businesses that have fewer than 25 workers. While major employers like state, federal and local government, the military, financial service industry and health care providers provide a large number of jobs, small businesses are the ones creating new jobs and providing stability to smaller communities around the state.
In addition to an improved business environment and tax structure, providing investment capital has been a priority of our administration. Investments in large projects like Eclipse Aviation capture the headlines, but they’re not the only ones. Statewide, money to small businesses has been increasing. Private equity capital has been flowing into New Mexico at an accelerated pace, much of it aimed at the vast pool of technology developed at the national research labs and universities.
The State Investment Council has played a leading role in attracting venture capital funds. Since 1996, it has given money to funds that agree to set up shop in the state and invest in New Mexico companies. Those investments have increased over the past years and have helped New Mexico businesses. One of them helped Aridien, Inc., a Belen company that makes the desiccant products you find in packaging.