The State of Nevadan Venture Capital

Nevada’s venture capital landscape has seen numerous positive changes over the past year; the introduction of two new funds, an influx of investment management firms, better business incentives, more support from entrepreneurs, and recognition of the State’s opportunities from large corporates.

A Larger Investment Community

In 2012, the Nevada Capital Investment Corporation (NCIC) allocated $50 million from the State of Nevada’s Permanent School Fund, to investment management firm Hamilton Lane.  The Silver State Opportunity Fund is a private equity fund of funds, whose strategy is to invest at least 70% of its allocation in Nevada.  Earlier this year, the US Department of the Treasury approved an allocation to the Battle Born Growth Escalator Venture Capital Program (“Battle Born”), a complementary program in that it invests in smaller Nevadan firms than are appropriate for the Silver State Opportunity Fund.  These programs both represent ‘firsts’ for the State of Nevada.

Recognizing Nevada’s advantages, investment firms, such as DCA Partners and Huntington Capital, have opened investment offices in the State, joining an established network of angel groups (such as, Vegas Valley AngelsSierra Angels and Reno Angels), venture capital and private equity investors.  We anticipate this trend accelerating.

Accolades from Major Corporates

Nevada has always had great entrepreneurial spirit, and this was recognized in late 2012 by credit card firm American Express, which highlighted the State as one of the fastest growing for women-owned companies. Information technology major IBM also acknowledged the State’s advances by selecting Reno, NV as a winner of its 2013 Smarter Cities challenge, a highly competitive $400,000 grant which will allow Reno, NV to create sophisticated ‘big data’ analytics software, to provide citizens and developers complete access to information on properties within the city.

Major corporations are accelerating their engagement with the State. Clean energy provider SolarCity announced in March that it plans to open a Las Vegas, NV location, which will create hundreds of jobs in the State over coming years. Consumer electronics firm, Apple, broke ground on a 350 acre $1 billion data center in Reno, NV in the spring, and later announced that it will add a solar farm to power the facility. Meanwhile, in May, a unit of investment firm Berkshire Hathaway purchased Nevada’s largest utility, NV Energy, for $5.6 billion, a 23% premium to its trading price.

Better Incentive Programs

In addition to its business-friendly tax and regulatory regime, Nevada is now able to offer relocation incentives to job-creating firms through the Catalyst Fund, introduced in 2011, and will shortly launch the Knowledge Fund, which aims to enhance the links between industry and academia through joint research projects. The program is modeled after the highly successful 50-year old Fraunhofer Institute, and was funded by a $10 million allocation from the State of Nevada in June 2013. More info on Nevada incentive programs.

Increased Entrepreneur Support

Nevadan entrepreneurs have long benefited from an extensive network of mentors and accelerator programs, such as the more than twenty organizations that make up the mentoring umbrella group, Entrepreneurship Nevada. There have been new additions to the landscape over the past year. For example, two large new privately-funded incubator spaces opened in Las Vegas, NV;Work-in-Progress is part of ecommerce CEO Tony Hsieh’s Downtown Project, while the Innevation Center was created by data center owner Rob Roy.

In summary, Nevada is now better placed than at any time in the last decade to attract investors, entrepreneurs and corporates, and we look forward to your joining us in this endeavor.