Wyoming’s Innovation Frontier: Venture in the Cowboy State
By Thomas Ferguson
Venture Capital is coming to Wyoming. Beyond the vast wilderness and cowboy heritage, a new frontier is emerging in the entrepreneurial ecosystem that might seem incongruent with the state’s image but many believe is critical to the future of Wyoming’s evolving economic landscape.
Earlier this year, Language I/O, an AI translation company out of Cheyenne, announced an $8m Series A round and the largest investor was Wyoming Business Council's Wyoming Venture Capital (WYVC) Fund. When a Wyoming-based company receives funding from a Wyoming-based VC, it’s time to pay attention.
The startup ecosystem in the intermountain west is still in its early stages but growing rapidly– Denver was recently named #18 on Pitchbook’s Global VC Ecosystem Rankings and over $5 Billion are invested in Colorado’s venture ecosystem each year. Many of these investors are now looking at their northern neighbor as an emerging market. Business incentives and a friendly regulatory environment, a 'Do It Yourself' Western culture, and a high quality of life are all of the right ingredients for successful ventures that have been passed over due to the lack of education on VC as an asset class, and lack of funds focused on the state. Access to capital remains a key barrier for founders looking to build in Wyoming – a problem several entities are making headway in alleviating.
When the Wyoming Business Council (WBC) launched the WYVC Fund they signaled a crossing of a milestone and sparked national interest. The WYVC strategy is outlined on their website, and in brief, allocates $35m for direct investments into startups and an additional $23m to contribute to emerging VC funds looking to invest in Wyoming– the overall aim is to attract more venture dollars to the state. By investing more capital both directly into businesses and also with a ‘fund of funds’ strategy, the network effects and resulting economic impact will be tremendous.
Previous studies found that Government-Sponsored VC programs like WYVC have a positive influence on the quantity and quality of patents, as well as job creation and industry productivity. Programs like WYVC are effective policy tools for fostering innovation and entrepreneurship, and is a big step for the Cowboy State to provide access to capital for high-growth startups. WYVC was quick to close its first investment into Language I/O, as well as back several emerging funds including the Rockies Wyoming Fund from the Denver-based Rockies Venture Club and WYO VC from the Jackson Hole Technology Partnership. WYVC’s efforts are lifting longtime historical barriers to access capital in a state that has been typically overlooked by venture funds.
Where is this influx of new venture dollars going to go?
The opportunity for additional venture capital in the state comes at a time when folks are eyeing Wyoming as a leader for on-the-ground projects in the energy transition and VC firms are looking to invest in net zero projects in energy communities. According to Goldman Sachs Research, the U.S. Inflation Reduction Act (IRA) will spur about $3 trillion in investment in green energy technologies. Wyoming’s abundance of natural resources, combined with its supportive regulatory environment, existing energy infrastructure and energy industry work force make it a top contender for carbon sequestration and clean energy technologies. From the massive wind generation capacity to the advanced nuclear reactor demonstration project, a state that has been historically dismissed by major investors is now poised to contribute meaningfully to a promising opportunity in the energy transition.
Additionally, the WBC has identified target industries in advanced manufacturing, ag tech, blockchain, and data centers & IT (to name a few).
Wyoming is making strides to position itself as an innovation frontier, with efforts to attract venture funding, support local startups, and create a favorable environment for entrepreneurial success.
You can join Silicon Couloir and the Wyoming Business Council for a session on Startup Financing in Wyoming: Nov 17th from 12:00-1:30pm at the Center for the Arts Conference Room.