Though there are many wishing to venture into the world of business, lack of capital presents a reliable hurdle.
Established businesses, startups and the beginning entrepreneur could all benefit from connecting with a venture capital group that could result in substantial investment and resources.
With a strong U.S. economic outlook, a new federal tax code that is lowering tax rates across the board and a realized promise from President Trump to increase GDP growth to 4 percent, the time could be ripe for businesses to look for such investments.
According to Venture Pulse, a quarterly report highlighting key trends, total venture capital (VC) investment in the U.S. last year amounted to a record $130.9 billion.
As well as VC investment is doing on a national scale, there is also a lot of investment going into companies and businesses in the Central Valley.
The Central Valley Angel Group is an angel investment group located in Fresno consisting of about 30 members that have been investing in the area since 2016 at a rate of three companies per year.
The group boasts a fund of $1.5 million with a goal to have around 14 companies in its portfolio.
“There’s an ascending entrepreneurial climate and market in Fresno which we are a part of and glad to participate in,” said Emory Wishon, fund chair for Central Valley Angels. “It’s cooperative instead of competitive. We have no deals in which we are exclusive, we welcome shoulder-to-shoulder and other participants.”
For 2018, the group invested more than $300,000 into three different companies.
Some of the notable companies the Central Valley Angels invested in for 2018 include San Luis Obispo-based Wildnote, a digital platform for efficiently collecting, managing and reporting environmental data; Missouri-based Mazen Animal Health, a new company focused on developing novel vaccines and therapeutics for animals; and Chicago-based QualSights, a qualitative insights platform that provides brands, agencies and consulting research on how consumers use their products.
While the ag and technology industries are a focus for investment, Central Valley Angels keep an eclectic approach on where to invest, not putting all of its eggs into one basket. Only about $100,000 goes into any single entity, all of them startups.
Central Valley Angels does have a heavy interest in investing its money in the region, and Wishon says that a company that succeeds is better for the area overall.
“When the economy is good, and its really good, we do better,” Wishon said.
“Our clients are more active, and we participating and facilitating that. It’s an ascending economy and I completely believe that 2019 will be a good year for the region.”
Ventures of connection
As good as a company or an entrepreneurial idea may be, it could be difficult to get traction without connections to investors.
Valley Ventures is an accelerator program of the Water, Energy and Technology (WET) Center, an incubator program that provides business support services at Fresno State with a main goal to help promote the growth of participating ventures.
To help meet its goal, Valley Ventures is funded by various grants from organizations including the California Energy Commission and works with other universities including Sacramento State, California State University, Chico, Humboldt State University and University of California, Berkeley, with Fresno State serving as the central hub.
“Our job here is to take technology and start-ups and help them with the testing, the development and the commercialization of them,” said Benjamin Francis, project coordinator for Valley Ventures. “The goal is to work with technologies that bring some kind of benefit to California. We are taking technologies that help with energy usage, typically in the form of efficiency and that could come in the form of hardware or software.”
Just last month, The WET Center compiled a report on the Valley Ventures investment figures since the program launched in August of 2017.
The report listed 31 of the 40 companies working with Valley Ventures, as nine did not fit the most recent reporting cycle.
Total equity investment grew from $2.79 million before joining the program to $8.91 million after joining.
Total fiscal year gross sales for the companies prior to joining Valley Ventures were $2.21 million, compared to $4.1 million after joining.
Francis said that not all companies that come through Valley Ventures are looking for capital, but that about half of them are looking for sales development, networking, workshops and getting a tie-in with Fresno State.
Most of the capital investors are from out the area, Francis said.
Valley Ventures and the investors it works with are usually at the seed stage — the period just after a company has launched and developing a product. Seed companies are usually funded at just under $1 million. Series A companies — those with a more developed track record and revenue — typically range from $1 million to $3 million.
Keeping company with companies
Valley Ventures started to work with BovControl over a year ago. Founded in 2013 in Brazil, the company uses the cloud to organize livestock information worldwide to help farmers better manage their cows and make predictions about them.
Being that the Central Valley is one of the largest agricultural hubs of the world, BovControl wanted to be in the field with boots on the ground, so searching for partnerships in the Valley was a natural choice. It developed a connection with Fresno State, which allowed access to agriculture professors and students.
When the company was first founded, the idea was to create a data collection tool to help farmers with their herds. The simple application got huge traction in the beginning and big players in the industry and the supply chain began to understand that it would be useful to be a part of BovControl’s platform.
By 2016, BovControl had 26,000 active users around the world, and as of today, there are more than 45,000 active users with 40 percent of them in Latin America, 15 percent in the United States and the rest in Europe, Asia, and Africa, making it the largest livestock database in the world.
“Last year  we were featured in Forbes as one of the 20 most innovative Ag-Tech companies in the world, and we were included because we have users on every single continent except for Antarctica,” said Marcelo Murachovsky, head of product for BovControl. “The most interesting part is that this is almost 100-percent organic growth.”
BovControl is also working with Swiss transnational food and drink company Nestlé to communicate with their supply chain, a change for the company that came after joining with Valley Ventures.
GroGuru, Inc., based in San Diego, California, is another agricultural company that joined Valley Ventures in the early stages.
GroGuru provides real-time precision soil and irrigation monitoring underground and wireless systems that provide growers with irrigation recommendations to improve crop yields and save money.
Founded in 2014, GroGuru connected with Valley Ventures in 2017 when it was at a pre-seed stage to make connections in the agricultural breadbasket that is the Central Valley.
“Being involved with Valley Ventures, as well as the WET Center, was a great catalyst for building relationships with farmers in the Central Valley, and some investor introductions as well,” said Patrick Henry, CEO for GroGuru, Inc..
Henry said that the company is ramping up its revenue, moving beyond commercial trials to a full launch of its underground wireless system, and is expecting to make north of $1 million in revenue.