ALBUQUERQUE, N.M. — New Mexico is still mired in muck from the recession, but better times may be coming for local entrepreneurs looking to start new businesses.
About $40 million in new venture capital could soon be flowing into startups across the state now that the State Investment Council’s new Catalyst Fund has begun doling out money for local venture funds that want to pump up budding New Mexico companies. The Catalyst Fund, managed by Sun Mountain Capital in Santa Fe, approved the first $4.65 million in early May for three investment entities to back some of the wave of new businesses emerging from the state’s incubator and accelerator programs looking to take new products and services to market.
Those investments will provide a bridge for struggling startups to traverse the infamous early-stage financial ravine known as the “valley of death,” where emerging companies need a small amount of capital to further develop and prove their technologies before larger, institutional investors are willing to back them.
That, in turn, could attract a lot more interest from deep-pocketed, out-of-state investors to commit more money to help grow those firms into viable companies, potentially spurring a new cycle of venture investment here that New Mexico hasn’t seen since the Great Recession. That upward investment spiral, where startups can find larger rounds of capital as they grow and succeed, is a critical part of the entrepreneurial ecosystem that the SIC, state officials, and venture investors hope to catalyze through the new Catalyst Fund.