The Kinetic Fund and Why We’re Here
It is with great excitement we announce the first close of our flagship fund, the Kinetic Fund. This very significant 46VC milestone demonstrates real investor support in our mission: to champion great founders from and in our region.
This close allows us to begin deploying capital to early-stage founders that match our governing theses. And we’ve already started — We’re proud to share that we’ve backed two teams attacking big problems in industries undeniably ripe for innovation: energy and health care.
Zoom out a bit further, and the Kinetic Fund represents more investor skin in this region’s startup game, supporting more incubation capital stages (pre-seed — series a) in a region that sports its own burgeoning technology corridor.
Finally, first funds, the lifeblood of early stage US venture, are back on the rise. Investors are signaling openness to the fresh perspectives and hungry-to-prove mindsets of seed managers. Which brings us to 46VC.
Why We Started 46VC
There are three big cylinders driving the 46VC engine forward: a lack of capital maturity in Middle America, a passion for our own experiential roots, and the attraction of disciplined venture returns.
Middle America Lacks Organized Capital to Support Early-Stage Startups
It is no secret that this area of the country regularly hears people from the coast call it “flyover country.” Yet in places like Tulsa, Oklahoma, which lack the same venture infrastructure found in coastal American cities, there is plenty of innovation ripe for incubation and growth.
But if venture capital is truly an active catalyst for driving innovation, why hasn’t the VC industry ventured towards the middle? Nearly 75 percent of venture capital dollars are concentrated in three states: California, New York, and Massachusetts (we go in-depth on this topic here).
This historical dearth of dollars in states like Oklahoma, Kansas, and Arkansas has begun to catch up in recent years. For example, Tulsa Innovation Labs disseminated a George Kaiser Family Foundation-sponsored study highlighting several industries and domains that Tulsa, OK (and like regional cities) could and should innovate. 46VC’s desired portfolio mix intersects with that GKFF study at energy tech, healthcare tech, and digital transformation — particularly in a B2B context.
We strongly believe those particular technology arenas must invest to accelerate innovation and national impact. We also believe our network will drive high quality, regional founders in those arenas into the Kinetic Fund. And while we support those founders on the front lines, we will provide unique investment opportunities and returns to investors in our region.
We are Founders and Operators with Regional Roots
As a managing team of founders and operators with deep, local roots, we are driven by a shared passion for supporting the next generation of great founders in our area. We understand the unique challenges that come with building successful companies in outlier areas like Oklahoma City, Wichita, Kansas City, and Bentonville.
But that is exactly why we have committed to backing transformational founders in places like Oklahoma: so they can stay and scale here, contributing to the growth of a more dynamic and resilient venture community, while creating more technology jobs and regional attractiveness.
By providing top founders in our geographies resources to find the first few stages of product/market fit, we aim to help foster a more vibrant startup ecosystem in our region and beyond, one that produces future founders and funds.
The Power of Alternative Investing with Experienced, Emerging Managers
Investment in a portfolio of professionally managed opportunities represents a very different risk profile than investment vehicles like money-market funds or REITs. Venture capital on the whole has consistently outperformed US public markets over 5, 15, and 25-year periods, according to data from Cambridge Associates.
Generating those returns takes patience, discipline and experience. Our managing partners have spent a combined 30 years as angel investors, realizing the potential of this asset class firsthand with early-stage investment successes.
Consider as well the risk-adjusted return accretion in Emerging Managers, a growing segment in the venture world typified by fresh rubrics, durable relationships, and simple hypothesis.
Now, 46VC will leverage the power of its experience and networks to give private investors access to regional alternatives. We are committed to providing our investors with access to high-quality, outsized returns opportunities from the rough and tumble middle of the US.
Our 46VC Modus Operandi
From our Kinetic Fund capital, we will invest in roughly 20 companies, with check sizes ranging from $250K — $1.5M. Our capital will be exclusively concentrated throughout Oklahoma and the broader Middle America.
We will back companies early — often before their founding teams have found their first product-market fit cycle. First, we and the broader venture industry as a whole see the most asymmetrical returns at these early stages. Second, we can drive more value to founding teams at these “MVP” stages because our team has lived as operators and investors at these same stages.
And lastly, we have tremendous trust from and in our LPs to make the Kinetic Fund collaborative at every level. From cross-portfolio functional support to strategic connections and partnerships, building as a team ensures a more probable outcome.
We would like to take this moment to express our gratitude to our partners and LPs who have seen our vision and backed us early with conviction. Your support has been instrumental in bringing us here today.
But, this is just the beginning. We look forward to sharing updates on our progress as we work toward our final close.
