The North Dakota Department of Commerce announced today that the North Dakota Development Fund (NDDF) selected the nationally acclaimed generalist venture capital investment platform, O’Leary Ventures (OLV) as a partner to manage a $45 million direct investment program aimed at bolstering economic growth throughout the state.
“North Dakota takes pride in being one of the most business-friendly states in the nation, and we continuously seek new ways to support entrepreneurs, innovators and emerging and expanding businesses,” Gov. Doug Burgum said. “We are excited for this opportunity to partner with O’Leary Ventures to broaden investment opportunities in North Dakota to create jobs, strengthen communities and diversify our economy.”
The program coined as Wonder Fund North Dakota will position the state as a powerhouse for small businesses by providing early-stage investment opportunities for financial and operational growth through the expertise and management at OLV.
“Capital flows through the path of least resistance, and North Dakota offers stable policy and a competitive tax environment for investors and entrepreneurs,” Kevin O’Leary said. “Under Governor Burgum and Commissioner Teigen’s leadership, this U.S. Treasury program provides a powerful springboard for long-term job creation which is the heartbeat of the American economy.”
Funds from the program will be used by OLV to invest in early-stage businesses headquartered in North Dakota with less than 500 employees. Wonder Fund North Dakota will consider companies based outside the state if their product and service have a material impact on North Dakota.
“This direct investment program is the perfect fit to fill the gap in the financing continuum of early-stage venture capital,” Commerce Commissioner Josh Teigen said. ”North Dakota is rapidly paving the way to reaching the highest GDP per capita in the nation. Commerce is currently working on more than $45 billion in projects, which brings our state’s capital expenditures among the highest level in the nation. By providing more direct investment opportunities for our businesses, we can expand financial growth across several industries creating an even more robust and diverse economy.”
Kevin O’Leary, the general partner of OLV, will serve as the fund’s Chairman and will direct the vision and strategy of the fund. Paul Palandjian, the co-general partner and CEO of OLV, will be responsible for the day-to-day management of the fund.
“Kevin O’Leary is a renowned international investor and will bring access to a broad network to this program, which will generate high-quality deal flow and favorable returns back to North Dakota and our businesses,” Teigen said. “It cannot be overstated how Kevin O’Leary’s presence will provide millions of dollars of value to a company’s portfolio and tremendous marketing and branding value to North Dakota and our most innovative entrepreneurs.”
“North Dakota has a strong culture of hard work, innovation and entrepreneurship,” Palandjian said. “We are seeing excellent deal flow across a broad spectrum including technology, agricultural technology, health care, energy and more.”
The NDDF serves as a gap financer and has not historically invested in or led priced equity rounds. Under the management of OLV, Wonder Fund North Dakota has the ability to lead investment rounds by having access to experts who can assist in the due diligence process and ensure companies are set up for success for future raises.
OLV was selected to manage the direct investment program through a competitive request for proposal process in 2022. Funds for Wonder Fund North Dakota were provided through the U.S. Department of Treasury’s State Small Business Credit Initiative (SSBCI). An approximate total of $58.6 million of SSBCI funds were allocated to the State of North Dakota for two equity and venture programs, the Angel Match Program and Wonder Fund North Dakota. Both programs are direct investment programs that will provide equity support directly to small businesses and startups by co-investing alongside private investors.
The NDDF was created in 1991 as an economic development tool. It provides flexible funding through debt and equity investments for new or expanding North Dakota primary sector businesses. The fund also manages the Child Care Loan Program created by the North Dakota Legislature in 2009.
More information about Wonder Fund North Dakota and the NDDF can be found at belegendary.link/North-Dakota-Development-Fund.