The state-backed Catalyst Fund has approved a $1.6 million commitment to NMA Ventures, a new fund run by prominent Angels to invest in early-stage technology companies across the state.
New Mexico Angels President John Chavez, former Angels Vice President Dorian Rader, and Angels board member Sherman McCorkle partnered together last year to launch NMA Ventures. They raised $4.2 million in commitments, including the Catalyst money, before closing the new fund on April 9, said Rader, now NMA Ventures’ managing partner.
They plan to invest between $200,000 and $400,000 in eight to ten startups over the next three years.
“The money is now in hand and we’re ready to go,” Rader said. “We’re excited, because there’s an unmet need for early-stage funding in local technology companies. We have a broad range of innovative talent in New Mexico, and this provides another resource to help those innovators move their technologies forward.”
This is the fifth commitment made to local investors from the Catalyst Fund, which launched in 2016 with $10 million from the State Investment Council and $5 million each from the U.S. Treasury Department and private investors. The fund, managed by Sun Mountain Capital in Santa Fe, is pumping that money into eight to ten venture funds that invest in early-stage New Mexico startups.
Funds receiving Catalyst money must match the state’s commitments dollar-for-dollar, making at least $40 million in new money available for startups.
Sun Mountain previously approved Catalyst investments New Mexico State University’s Arrowhead Innovation Fund, Albuquerque-based Cottonwood Technology Funds, Tramway Venture Partners and a fund managed by the ABQid business accelerator.
“We’ve have over $10 million committed now from the Catalyst Fund,” said Sun Mountain Managing Partner Brian Birk. “We’ve tried to spread the investments geographically across the state. We believe it’s providing critical capital for early-stage companies.”
That’s essential to boost New Mexico’s budding startup ecosystem, because many local companies have difficulty attracting money from institutional investors until they fully prove their technologies and begin building their businesses.
“If you’re a CEO of a startup, you need more than just $30,000 or $40,000 in seed money to build the business and move forward,” Birk said. “You need more like $300,000 or $400,000, and we’re helping to fill that gap.”
NMA will seek out promising high-tech innovation, especially from the state’s national laboratories and research universities.
Over the next few years, Catalyst funding is expected to support more than 50 New Mexico startups, said Gov. Susana Martinez, who announced the new NMA commitment on Wednesday.
“Investing in homegrown New Mexico companies and entrepreneurs strengthens and diversifies our economy,” Martinez said in a prepared statement. “The Catalyst Fund helps our local companies get off the ground and succeed, creating new jobs and opportunities for New Mexicans.”