O’Leary Ventures’ chairman Kevin O’Leary is ditching the likes of New York and California for places where, he says, entrepreneurship and hard work are not punished by taxes and regulation.
“It’s a trend that’s accelerating,” O’Leary tells Benzinga.
North Dakota, he claims, is setting up to become the next big thing. “From North Dakota emanates this theme of success I have yet to see elsewhere” O'Leary says, citing how Stripe and OpenAI have talent ties to the state.
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O’Leary’s introduction to North Dakota came with a successful Shark Tank and clean energy investment. Further research suggested the Peace Garden State is becoming competitive from a capital flow perspective.
O’Leary then met with the state’s leadership, found synergy, and inked a partnership. The new Wonder Fund, a play on O'Leary's "Mr. Wonderful" moniker, will now be an official North Dakota Development Fund partner.
Together they will invest in bright ideas to the tune of $45 million.
North Dakota Governor Doug Burgum, who grew up in Arthur, North Dakota, has lead companies in his own right, including Great Plains Software, Microsoft Corporation MSFT, and Atlassian Corporation TEAM.
“Innovation, not regulation, is what’s going to drive our country forward,” Burgum told Benzinga.
“We will achieve the highest GDP per capita by supporting entrepreneurs and people like Kevin that believe in entrepreneurs,” he added.
How To Access The Funds
Early-stage businesses must be headquartered in North Dakota and have less than 500 employees either physically present or remote.
Partnerships and businesses that aren't domiciled in North Dakota can be considered, but must produce a product or service that has a material impact on the state.
“I want to hear from as many diverse thinkers as possible,” O’Leary said. “They should head over to O’Leary Ventures’ website and upload their deck. Our analysts will assess whether there is a fit.”
A Launchpad For Growth
O’Leary will also look to provide entrepreneurs with a platform to tell their stories and lower their customer acquisition costs.
“There’s a direct correlation between market capitalization and social media,” O’Leary explained. Accordingly, “my job is to help tell these amazing stories.”
Burgum maintains that he will be on the sidelines keeping the state’s regulatory environment less burdensome on businesses’ costs to innovate.
“North Dakota is a state that supports businesses,” Burgum said. “Having people that can provide mentorship, direction, and connections is fantastic, and nobody understands that better than Kevin.”
Focus On Sustainability
Burgum touted North Dakota's geology, and its ability to capture and store carbon, or CO2, underground.
In fact, landowners are able to earn money for storing carbon under their land, he explains. The state has funds in place to help monitor and keep this land safe long after carbon injections stop.
“We will become ground zero for sustainable aviation fuels, too. We’ve got an oil company here in North Dakota that’s putting more CO2 in the ground than that emitted by the oil that comes out," Burgum said. "That’s the first carbon-negative oil company in our country, and they’re greener than Patagonia.”
The Global Implications
O’Leary’s losses on a hydro bitcoin-mining project in New York, which amounted to about $20 million, is part of what drove him away from the Empire State and, instead, spend more time in North Dakota.
O'Leary and Burgum also take issue with U.S. reliance on foreign powers’ energy.
It’s harder to manage pollution where “there are no such things as environmental protection agencies,” the Governor explained, adding that it is becoming difficult to sustainably harvest rare earth minerals for energy in the U.S.
“Theodore Roosevelt helped put away millions of acres for the benefit and use of the American people. He said conservation is as much development as it is protection," Burgum said. "Now, we’re developing an attitude that if we have the word federal in front of the word land, nobody should set foot on it.”
If the U.S. was to pursue an all-electric vehicle future, according to Burgum, it must focus on producing all of its electricity in-house, sustainably. That’s where the Governor’s advocacy for use of federal lands, as well as North Dakota’s regulatory framework, will help in strengthening the state’s economy while working to reduce global waste and pollution.
Wonder Fund’s Long-Tail
Burgum acknowledges the fund is likely to have its fair share of ups and downs, just as you would expect with any other venture fund. But O’Leary’s hedging the downside through the use of tools that track investments periodically and give them mark-to-market valuations.
Moreover, in capturing the long tail of the investments, O’Leary wants to be able to participate in later fundraisings as well as list the businesses publicly — the latter being a tool to allocate more capital to the state and its initiatives to grow and protect national interests.
“Entrepreneurs now have a chance to have some wind at their back,” Burgum said. “I couldn't be happier to have O'Leary Ventures and the Wonder Fund as partners in driving attention towards the great opportunities here in North Dakota.”
Photo retrieved from the North Dakota Governor's office. Left, Governor Doug Burgum. Right, famed investor Kevin O'Leary. Benzinga wishes to thank O'Leary Ventures' Nancy Cheung for arranging this conversation.
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