Look Back and Look Ahead. Reflection on where we’ve been and… | by Nathaniel Harding | Cortado Ventures | Jan, 2023 - Medium

CORTADO VENTURES

Reflection connected wherever we’ve been and wherever we are going, and the increasing scenery of innovation successful the Midcontinent

When we started Cortado Ventures successful the outpouring of 2020, we believed that technological innovation would infiltrate caller areas, progressively extracurricular of the accustomed geography, arsenic the “third wave” of task superior arrived successful places similar the Midcontinent wherever we telephone home. We are a portion which chiefly includes Oklahoma, Missouri, North Texas, Arkansas, Colorado, and Kansas; the word “Midcontinent” has historically been utilized to picture a prolific portion for the lipid & state industry, but we’re repurposing the word to picture our unsocial region’s increasing tech sector.

The past 2 years person seen an unmatched detonation of innovation. It seems each fewer months there’s a caller paradigm shift:

• The archetypal mRNA vaccine was brought to marketplace successful precocious 2020.
• The metaverse entered planetary consciousness arsenic Facebook became Meta successful 2021.
• Augmented and virtual world became mainstream with VR contented surpassing $1 cardinal successful sales.
• The James Webb Space Telescope sent backmost breathtaking images of the deepest abstraction ever seen.
• Everybody yet got into cryptocurrency conscionable successful clip for the illness of FTX.
• Artificial quality got into creation (but inactive can’t gully hands).
• ChatGPT went unrecorded astatine the extremity of 2022 and present each occupation successful the satellite volition beryllium affected by AI.

This has been a singular clip to commencement a task superior steadfast with record amounts being invested globally. As I bespeak connected the past fewer years and the travel ahead, I’m awed by the broader context. We’ve accomplished rather a bit, and determination is inactive overmuch much we expect for the future.

A Year successful Review with Cortado Ventures

Milestone Successes

Last twelvemonth was afloat of milestones. After successfully raising our archetypal money of $20M successful 2021, we person since reviewed implicit 1,700 companies and reached our extremity of investing successful astir 30 of them. Early on, we made the determination to marque enforcement coaching disposable to each of our portfolio companies, led by our friends astatine Magellan Executive Partners. Most of our companies are utilizing this assets and find it invaluable.

Last spring, we launched our 2nd fund, doubling down connected proven successes. Our condemnation remains beardown that determination are innumerable opportunities successful the Midcontinent with companies innovating successful energy, logistics, and beingness sciences, overlooked by coastal task capital.

We were overwhelmed and encouraged by the adjacent unanimous re-ups from Fund 1 investors into Fund 2. We besides celebrated the landmark of attracting respective organization investors aft being vetted done elaborate operational owed diligence. Our capitalist basal present spans around the globe. This leads to our upcoming announcement of reaching $60M towards our $80M goal. With this milestone, Cortado volition beryllium capable to afloat recognize our imaginativeness and beryllium a preferred spouse with ambitious early-stage companies.

As we concluded the past of our archetypal investments from Fund 1, we began investing from Fund 2 into caller companies without missing a beat. In 2022, we invested successful 8 companies from this fund. These companies see innovators bringing AI to marketplace for refineries, SaaS solutions for automotive logistics, tech-enabled work for healthcare, and much wrong our themes.

Cortado Ventures and the Verge teams with founders

By the Numbers

Our investments span our large thematic areas: energy, logistics, aboriginal of enactment and beingness sciences. Companies scope from underground hyper logistics, outer LIDAR technology, and those developing intranasal vaccines and a breakthrough attraction for diabetes.

• In 2022 we averaged 1 up-round per month, resulting successful a effect graduation complaint approaching 2/3rds — double the nationalist average. With our follow-on investments successful 2022, Recuro Health is increasing astatine a singular gait with its acquisition of 2 companies and much announcements soon.
• We reached $80 cardinal successful assets nether absorption successful lone 2.5 years since our inception, besides becoming the astir progressive effect capitalist successful the Midcontinent, according to information from Crunchbase.
• We hosted and sponsored 10 events with funders, founders, and ecosystem builders, totaling implicit 500 attendees from eleven states. This is an effort to physique a vibrant and informed assemblage astir task superior and entrepreneurship.
• At our yearly gathering successful November, we hosted implicit 100 radical from 9 states, including our friends astatine gener8tor and 19days.

Cortado Investment Analyst and Interns with the co-founders of Boddle Learning

People Make It Possible

Oklahomans are known for their caring, compassionate quality and their pioneering spirit. This is reflected successful our investors, companies, employees, and partnerships — whether locally oregon globally. It’s yet different mode the Midcontinent stands retired from different task superior hubs of commerce and paves the mode for thing unique.

We find tremendous worth successful connecting our investors with our startup founders. None of this would person been imaginable without the generous enactment of loyal partners including McAfee & Taft, amshot, First Republic Bank, Sensulin, HoganTaylor, Magellan Executive Partners, Build In Tulsa techstars, Saxum, The Verge OKC, and Regent Bank.

Our squad grew larger — not conscionable successful fig but exponentially successful talent. We were joined by Mansi Patel, J.D. Baker, Hailey Moxley, Cody Merrill, and Simone Sparks.

Additionally, Cortado present has a dedicated squad for sourcing and stewarding investments, supporting portfolio companies and providing apical notch administrative enactment for our increasing household of funds. Our enactment squad completed respective VC accelerator programs including Sutton Capital, VC Labs, SignalFire and Coolwater Capital.

With the assistance of a concern with the Oklahoma Center for the Advancement of Science and Technology (OCAST), we’ve hosted 8 interns to-date:

• Two interns person completed their bachelor’s degree, some present moving for tech startups.
• Three interns are slated to implicit their undergraduate acquisition this year.
• One intern completed their instrumentality grade successful 2022.
• One intern completed their MBA programme and present works full-time with Cortado.
• Our newest intern is simply a existent MBA student.

The proximity of these interns to the companies we vet and put successful provides them acquisition successful knowing transformational tech increasing successful Oklahoma and sets them connected a vocation way to proceed the advancement of innovation.

Cortado Ventures was featured successful Wall Street Journal’s Venture Capital newsletter

Features and Publications

In 2022, we continued sharing accusation done our Medium blog site, publishing articles connected our insights and the section market, our diligence process, and the themes driving our investments. Our contented was work by implicit 10,000 radical past twelvemonth alone.

Cortado and our companies were recognized successful the Wall Street Journal, Fortune, Forbes, Venture Capital Journal, and galore more. National media is taking announcement of what’s happening present successful the Midcontinent. Where different markets are flailing, ours is thriving.

State of Startups sheet astatine Cortado’s Annual Meeting with partners from gener8tor, Plains Ventures, techstar and The Verge OKC.

Our Ecosystem

Any concern is simply a reflection of the metropolis successful which it resides, and Cortado is nary exception. The Midcontinent remains a fertile ground for entrepreneurship, innovation, and acceleration. We are thrilled to spot caller incentives and opportunities for existent and aboriginal entrepreneurs successful our ain backyard.

Last twelvemonth brought the opening of an innovative entrepreneurship hub successful Oklahoma City, The Verge, led by Kristin Garcia. With sponsorships from philanthropic partners Flourish and the Inasmuch Foundation, The Verge is simply a location for Oklahoma entrepreneurs to find resources, support, and backing to signifier and motorboat their businesses. The Verge hosted respective events astir Global Entrepreneurship Week and Minority Enterprise Development Week. We’re looking guardant to the afloat motorboat connected February 23rd.

The State of Oklahoma has continued to marque advancement to invigorate our increasing entrepreneurial and tech ecosystem. In caller years, the Oklahoma legislature has passed authorities that provides much nationalist backing for startups, creates a taxation deduction for investing successful Oklahoma task superior funds, and rewards tech endowment crossed the state. Software and cybersecurity engineers tin qualify for a taxation credit up to the magnitude of $2,200. The Invest successful Oklahoma Act, which passed successful 2021, provides that nationalist funds, specified arsenic the Tobacco Settlement Trust Fund (TSET) oregon pension funds, whitethorn put up to 5% of their assets successful Oklahoma-based task superior funds. This instrumentality is simply a catalyst to creating much entree to superior for businesses and startups crossed the state.

Through the Oklahoma Accelerator Program, the authorities invested $15 cardinal for accelerator programs successful OKC, Tulsa and agrarian Oklahoma, with each geographical country receiving $5 million. Along with Boyd Street Ventures, we are arrogant to supply a lucifer for the OKC accelerator awardee and nationally-recognized accelerator, gener8tor. This Wisconsin-based accelerator has programs each crossed the United States focused connected transforming the tech and arts startups scenes successful emerging markets similar Madison, WI, Milwaukee, WI, Birmingham, AL, Oklahoma City, OK, and galore others.

Our committedness to enactment this increasing ecosystem remains strong. In 2022, we provided implicit $10,000 successful sponsorships for Oklahoma nonprofits including Techlahoma, OKC Innovation District, OKC Minority Enterprise Development Week, Oklahoma Women successful Tech, and TEDxOKC.

gener8tor OKC squad with Cortado’s Platform Manager

Looking Ahead

As we look up to 2023, we are poignantly alert that task superior funds that win and thrive successful recessions are rewarded. It tin beryllium hard to rise wealth successful this benignant of environment. But portion others are taking cover, we are much ambitious than ever.

Our rank and collocation with The Verge puts america successful the halfway of gravity for what we do. Sharing abstraction with organizations similar Techlahoma, OK Coders, Oklahoma Craft Nano Brewhouse, Skyline Event Center, gener8tor OKC, and the University of Oklahoma Biotech Startup Programs (OKBioStart) unites america nether the shared ngo of The Verge: Where Ideas Take Flight.

We look guardant to galore large announcements successful the coming year. We’re present capable to supply liquidity to our Fund 1 investors conscionable 2.5 years in, critically important successful an situation wherever DPI is king (distributions to paid-in capital).

We besides program to denote our unsocial Opportunity Zone fund, enabling our investors to recognize taxation advantaged gains. To further enactment the improvement of a robust task superior and entrepreneurial community, we’ll denote our instauration this year. Lastly, expect quality of our aboriginal location astatine the intersection of the cardinal concern territory and the Innovation District, wherever we volition anchor a caller development.

Our 2nd biggest announcement this twelvemonth volition beryllium reaching $100M assets nether management, a genuinely singular feat for a steadfast not yet 3 years old. This is imaginable due to the fact that of our investors who judge successful our thesis and strategy, and by the galore tech founders who instrumentality the vocation hazard to motorboat caller ideas.

The Midcontinent

Midcontinent Inflection Point

The Midcontinent marketplace is seeing an inflection point. In the past, the thought of quitting your time occupation and starting a caller exertion institution was terrifying and fraught with peril. Fail and you person to commencement over. Now, with a captious wide of entrepreneurs and enactment apparatus, starting and failing conscionable means that you rapidly determination to the adjacent opportunity. “Fail fast,” they say.

This is the mantra down iterating and nailing merchandise marketplace fit. This couldn’t person travel astatine a amended clip with the wide changes successful the workforce. Now much than ever, originative radical are not complacent with simply having a job. The pandemic has fixed licence to galore radical to prosecute their passionateness and instrumentality risks. This is wherefore we’re seeing an unparalleled epoch of technological disruption. This is wherefore each fewer months there’s a paradigm shift.

In 2023 we’ll spot galore changes successful task capital, affected by involvement rates, outgo of capital, and an wide sobering of concern development. Corporations seeking to innovate volition progressively crook to acquiring exertion companies to stay competitive. R&D dollars volition spell down, arsenic volition deployed superior successful innovative companies. But exertion companies volition thrive if they connection existent worth to their customers.

For decades task superior was the domain of Silicon Valley, New York, and Boston. In the aboriginal portion of the 2000s, the 2nd question was built successful Chicago, Austin, and Miami. Led by a caller breed of manufacture hardened entrepreneurs, the 3rd question of task superior has arrived successful the Midcontinent. And Cortado Ventures is excited to pave the way.