Battle Born Venture Program seen as catalyst to mobilize private investment

With $5 million to invest, it’s not the largest venture program, but Nevada economic development officials expect the Battle Born Venture Program to serve as a vehicle to mobilize private investment in startup companies statewide.

Yet how much of an impact the program will have is still unknown.

“There is no existing venture industry or culture here, so a startup formed within the state has a hard time getting funding,” said Karsten Heise, director of technology commercialization for the Nevada Governor’s Office of Economic Development.

The Battle Born Venture Program was created to fill the gaps by investing “alongside other investors,” Heise said. The state’s venture capital program is overseen by the Governor’s Office of Economic Development.

The program looks for “seed stage” opportunities with the goal of leveraging its initial $5 million grant into an economic impact of $40 million over the next five years. The average investment is expected to be between $100,000 and $200,000.

The program looks to invest in several high-growth industries including aerospace and defense. agriculture, energy, health care, technology, logistics, and manufacturing.

“Co-investing with other companies is where the impact comes from,” Heise said.

The state’s venture capital program was launched in August after the Nevada Legislature approved it. The $5 million fund is a grant from the State Small Business Credit Initiative, created through the federal JOBS Act in 2010.

The program has two goals — venture capital returns to Nevada and enhanced local capital infrastructure through co-operation with other venture capitalists and accredited private investors.

Among the modest list of partners is Brennan Capital Partners, Bowling Ventures LLC, DCA Capital Partners, and Berkshire Bridge Capital.

Robert Lind, a principal with Las Vegas-based Berkshire Bridge Capital, said Battle Born could be a “real plus,” but the key is to get institutional investors interested in these companies.

“There are a number of small companies that need venture funding,” Lind said. “The idea of the program is to be another reference point for these early stage businesses. It will be good for our economy.”

According to the National Venture Capital Association, venture capital spending per-Nevada resident stands at $2; in California it is $338 per resident.

Nicola Kerslake, investment manager with the program and the Nevada Small Business Development Center at the University of Nevada, Reno, said the program looks to invest in companies statewide.

“We’ve been looking at 20 to 22 companies,” Kerslake said. “We have decided to move forward with due diligence on two firms.”

She declined to identify the companies or the size of the potential investments.

“We are not looking for good ideas, we are looking for exceptional ideas,” Kerslake said. “That really is one of the program’s goals.”

Heise agreed, saying the program’s mission is also about creating “a venture capital culture in the state.” He said it will be a challenge to get co-investors from out of state to take a look at Nevada startups.

“We also have to educate the public that this is not a grant. It is an investment,” Heise said. ”We want to plow our returns back into other investments. I want to grow the fund.”

He said the venture program’s mandate includes economic development and job creation in Nevada.

“This is a high risk (investment) vehicle,” Heise said. “People need to be prepared for that. There will be losses, but there will also be returns.”

Contact reporter Chris Sieroty at csieroty@reviewjournal.com or 702-477-3893. Follow @sierotyfeatures on Twitter.