Pre-venture capital investment
in Oklahoma Life Sciences
The average size of venture capital firms has increased rapidly over the past few years, making them less willing to make small, early investments, particularly for companies not located near a lead venture capital investor. At the same time, research funding has also grown rapidly, increasing the quality and quantity of promising life science potential investments. However, the poor relative performance of both small capitalization stocks and biotechnology and health care service stocks has reduced the willingness of venture capitalists to invest in life sciences' start-ups.

Oklahoma Life Sciences Fund, LLC (OLSF) is an Oklahoma limited liability company created to take advantage of private equity investment opportunities in the Oklahoma life sciences. The fund is $5.1 MM and will invest in the most promising very early-stage life science companies that are not yet able to attract venture capital.

OLSF investments will be made to fund validation of promising research results, develop business plans and, where appropriate, identify and recruit management teams and venture capital syndicates. Post investment, companies that successfully develop their core technology and business and attract venture capital will result in the formation of life science companies based on Oklahoma technologies. Companies whose technology and business is not robust enough to form a life science company will result in technology licensing opportunities.

The fund’s structure and valuation procedures are designed to maximize the equity capital available to the OLSF portfolio companies and to preserve control over the technology until significant money is raised. The fund has an investor friendly structure with a minimum investment of $200,000 with just-in-time funding. In addition, investors who are taxpayers will receive a 20% Oklahoma State Tax Credit at the time of their investment for their capital.

Investment decisions will be made by the Funds Advisory Board, which will be elected by the Members with each dollar of investment effectively receiving one vote. OLSF will be managed without any management fees. OLSF investors will also have the right to invest in later rounds on the same terms offered other investors in OLSF technologies and companies.

Oklahoma is a growing entrepreneurial region that offers experienced investors good investments at very attractive prices. In Oklahoma, recent changes to the state constitution have spurred a frenzy of technology development and commercialization activity at the University of Oklahoma, at Oklahoma State University and at the OU Health Sciences Center. These academic institutions along with the Oklahoma Medical Research Foundation and the Noble Foundation are generating several start-up opportunities per year, a pace unheard of just a year ago. They are building on the successes of such companies as UroCor, Novazyme, Data Critical, and ZymeTx. Both UroCor and ZymeTx were early-stage investments of a Chisholm Private Capital predecessor fund, ML-Oklahoma Partners and Data Critical was part of Chisholm II.

Chisholm has a history of successfully serving as the lead investor in venture capital syndicates, which can fund young companies through their growth cycle from pre-startup through initial public offing or sale. To date, Chisholm has invested more than $70 million in 43 companies, 12 of which are in the life sciences. Three Oklahoma life science companies, UroCor, ZymeTx, and Data Critical Corporation have gone public.