Venture Capital Gives New Mexico Businesses a Boost
As Lieutenant Governor of New Mexico, one of my top priorities has been supporting small businesses across the state. I’ve been a small business owner myself and I know the challenges people like me face, particularly finding the money and getting sound advice on starting and maintaining a business. Most of the business community are companies that have fewer than 25 workers. While major employers like state, federal, and local government, the military, the financial services industry, and health care providers provide a large number of jobs, it is small businesses that create new jobs and bring stability to communities. smallest in the state.
In addition to improving the business environment and tax structure, providing investment capital has been a priority of our management. Investments in big projects like Eclipse Aviation make headlines, but they’re not the only ones. Across the state, money for small businesses has been on the rise. Private equity capital has been flowing into New Mexico at a rapid rate, much of it going into the vast amount of technology developed in the nation’s research labs and universities.
The State Investment Council has played a prominent role in attracting venture capital funds. Since 1996, it has given money to funds that agree to locate in the state and invest in New Mexico businesses. Those investments have increased in recent years, as nearly 20 funds have helped New Mexico businesses. One of them, Mesa Capital Partners, helped Aridien, Inc., a Belén company that makes the desiccant products found in the packages. Aridien, which had four workers when it started looking for money to grow, will likely employ 30 people by the end of the year, thanks to Mesa’s investment.
The SIC also helped establish a fund managed by local investment professionals who invested money in New Mexico businesses. Several funds are now based in New Mexico, with Flywheel Ventures and the Verge Fund raising more than $20 million from investors, including the SIC. Two other funds, New Mexico Community Capital and New Mexico Growth Fund, were created to invest in traditional businesses such as manufacturing, service and distribution.
To help even the smallest businesses, in 2000 lawmakers created the New Mexico Small Business Investment Corporation. With initial funding of $10 million, the SBIC has developed a number of partnerships with financial professionals to make loans and smaller equity investments. The SBIC has been an active partner in the Small Business Forums I have held in 25 communities over the past four years. I am pleased to see that loans have been made to over 1,300 small businesses in almost every community. These are loans that traditional lending sources likely would not have made. One went from ACCION to Jerky by Art, a one-man jerky maker that went from feeding just his friends to shipping all 20 of his flavors across the country.
Based on these successes and the growing need for assistance, lawmakers increased SBIC funding to more than $45 million. Government Bill Richardson and I have actively supported these increases in hopes that more New Mexico businesses may qualify for investments or loans. To help expand the investment program, I am pleased to announce that SBIC and its partners have formed an initiative called Finance New Mexico to teach small businesses how to get money. Training and resource providers, including Small Business Development Centers, Empowering Business Spirit, ACCION NM, The Loan Fund, WESST Corp and others, are teaming up with SBIC and its financial partners to make it a little easier to get loans or investors. With these weekly articles, webcasts and a website, Finance New Mexico will provide business owners with critical information on how to strengthen this backbone of our economy.
Look for future articles to help you gain business skills and financing resources for a new or existing business.