The team behind Cortado Ventures thinks there's plenty of untapped investment opportunity in the Midwest. To change that, it's raised $20 million in what appears to be Oklahoma's largest venture fund to date.
The firm is led by partners Nathaniel Harding, David Woods and Mike Moradi. In a Medium post, Harding (an angel investor and former oil and gas entrepreneur) recalled how he and Moradi had been discussing the need for an Oklahoma-based venture capital fund back in 2017.
They'd planned to launch the firm — which makes seed and Series A investments — just about a year ago, and the pandemic only gave them a greater sense of urgency.
"With the pandemic threatening Oklahoma’s economy, more attention than ever was placed on the need to diversify our economy and create future-ready tech jobs," Harding said. "There was also a sense that innovation and startups would multiply, and that technology disruption and adoption would accelerate. In fact, we contend that there has never been a better time to start a new company. Our investors sensed this too."
Although the firm's first fund only recently hit its cap of $20 million, it has already invested in nine startups, including text marketing company RespondFlow in Tulsa, Dallas-based Socialwyze (which helps underemployed people find flexible work) and hybrid materials startup Mito Material Solutions in Stillwater.
Cortado was created with the thesis that the region was "underfunded," but Harding told me it doesn't have any geographic restrictions on investments.
"We look at companies from anywhere," he said. "We care more about what the company does and less about where they’re located."
Harding suggested that Oklahoma is particularly rich in entrepreneurs with a background in traditional industries like energy, aerospace, agriculture and manufacturing. And being based in Oklahoma City hasn't stopped Cortado from backing founders from diverse backgrounds — he said the majority of the portfolio is led by women, people of color and first-generation immigrants.
Asked whether the regional ecosystem will also need more later-stage firms to fund the growth of successful startups, Harding said, "Funding at the early stage is often very local, but funding at later stages, once you get to nine-figure valuations — you’re a known commodity. Once you’re getting to a Series C and D [...] you have a global market for investments."