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Rick Nagel: Adding Value to Investment Deals

A profile on Rick Nagel written for the Oklahoma Venture Forum on the subject of Adding Value to Investment Deals.

Rick Nagel is the Managing Partner of Acorn Growth Companies. This small middle-market private equity firm focuses exclusively on ladder stage and growth investments in the aerospace, defense, and intelligence sectors. The company has been around since 2000, starting as the first privately certified incubator in the state of Oklahoma. After 30 deals and on their fifth fund, the firm seeks opportunities to add value as an operating team.

“We look at 250 deals a year,” said Rick Nagel. “We do about two or three. So, we’re very picky. We invest mostly in North America and Europe.”

To boil down the selection process, Nagel explained that they focus on their strengths. Some deals are fast nos, and they get to a no quicker than they get to a yes. One of the critical filters is that they have to add value to the company.

“For us, and not every firm is like this, but for us, we want one plus one to equal seven,” said Nagel. “We’ve been driving historical performance since our internal rate of return really kind of, since the beginning on all of our platform exits, is track more than 30%.”

To maintain their high-performance level, they do this by not overpaying for anything and adding value after the close. This philosophy helps mitigate risk and drive more organic growth opportunities.

“We’ve got a lot to say grace over, so we don’t have that problem,” said Nagel. “It doesn’t mean we always get it right, but we have a pretty good batting average so far.”

Nagel advised those looking for funding to have their head screwed on straight on value and terms when making themselves look suitable for potential investors. People also need to be realistic going in on a deal. There’s a lot of great technology that never gets the funding behind it because the entrepreneurs are just too proud of it. Rick made the analogy of having a big percentage of a small pie or having a small percentage of a massive pie, which leads to having more pie on your plate. 

“As much as we looked at bringing on value-added partners, I think it’s important that entrepreneurs looking for capital equally go out and find value-added partners,” said Nagel. “It’s amazing to me what they’ll do and give up to people to get a deal done. They have no value at all in helping them drive to their end results. So, you want investors that are not just passive. Typically, the younger the company is, you want more hands-on deck. I always encourage people to do value-added capital.”

Rick Nagel will be speaking at the Oklahoma Venture Forum Power Lunch on Wednesday, October 13, 2021. The event will be open to guests both in-person and virtually via ZOOM. Nagel said OVF is great for entrepreneurs and potential investors. 

“My advice to anybody that might be reading this that’s not currently engaged would be to get engaged,” said Nagel. “If you’re an early-stage investor, whether you do a deal or not, you’ll see things that will make you smarter in that process by listening to these presentations.”

Melissa Houston: Making Legislation Work for Businesses

A profile on Melissa Huston written for the Oklahoma Venture Forum on the subject of Making Legislation Work for Businesses.

With over 20 years of experience, Melissa Huston has made a career in public service in various roles. She has recently served as the Oklahoma Labor Commissioner, Secretary for Education and Workforce Development, and previously as Chief of Staff for the Oklahoma Attorney General and the Oklahoma Office of Homeland Security. She’s worked under four governors, both Democrat and Republican, and has been referred to as the Swiss army knife of public policy.  

“I’ve had some really interesting positions,” said Melissa Huston, founder and principal for 929 Strategies. “And everyone, I didn’t know anything about when I walked into it. It’s not like you go to law school to go into Homeland Security. It didn’t exist then. So as I was finishing my term as labor commissioner, I was trying to figure out what I was doing next. I knew I wanted to stay in public policy. I really enjoy finding solutions to complex public policy issues that are facing the state of Oklahoma. Ended up starting at 929 Strategies.”  

The mission of 929 Strategies is to help businesses and governments navigate complex public policy issues. Houston elaborated her job ranges to finding growth opportunities, solving a regulatory environment challenge, or consulting in a major project. One of the projects Huston is currently assisting the legislature is on The American Rescue Plan funds and how to set up a process in the state for the legislature to assess the needs of the state following the pandemic. She has learned that it’s about bringing the right people around the table and discussing and brainstorming solutions.  

“You’ll find that we have a lot more in common than we have differences,” said Houston. “And that’s what our company does. We try and bring together different sides of the equation, brainstorm some solutions, and then hopefully help to make those solutions a reality. That’s what we’re doing in the entrepreneurship space and for several other of our clients.”  

An example Houston shared was during her time as labor commissioner, and they regulated amusement rides. To do this, she sat down with members of the business community and the state’s inspectors, and learned how the regulation worked for them. Both the parties had a common goal of providing a safe experience. They were able to come together to find a solution to protect the public without having unnecessary or burdensome regulation in a way that made sense. Oklahoma became a model for the rest of the country on how to regulate amusement rides. Houston said when you have practical solutions and you can get bureaucracy out of the way, you can really unleash the creativity in Oklahoma to address some of the challenges that we have as a state.  

“As far as entrepreneurship is concerned, I am very passionate about entrepreneurship in Oklahoma,” said Houston. “People in Oklahoma are very resilient. They’re very innovative. They’re pioneering. They’re let’s figure it out, let’s roll up our sleeves and figure it out and let’s help one another to get there. Those skills are the same skills of an entrepreneur, of a successful entrepreneur. So how is it in the state of Oklahoma that we aren’t leading the country in startups?”  

Houston has been trying to solve that problem for the department of commerce. To have a thriving entrepreneur ecosystem, Huston said two things are needed simultaneously: founders and funders.  

“If you talk to the funders, they will say, there’s not enough deal flow,” said Houston. “But if you talk to the founders, they will say, there’s not enough capital. You’ve got to be addressing both sides of that equation simultaneously, and both of them have different issues. From a founder’s standpoint, it’s about creating an environment in the state of Oklahoma that encourages innovation, that supports mentorship. Oklahomans are always willing to help their neighbor and willing to help one another, but how do you make those connections? Especially if that’s not the world that you’re living in.”  

On the funder side of things, Houston said it’s a similar situation with issues like connecting funders with the founders that have an idea that’s ready for investment and educating funders in the entrepreneurship ecosystem.  

“We have a lot of investors in energy and in oil and gas, which is a very risky investment, but those investors understand that market,” Houston said. “They understand if you invest in a well, how many times the well isn’t going to hit and that’s okay, that’s part of the market. Houston compared technology startups. For every ten you invest in, maybe there are three that will take off and hit. And so, they have that risk tolerance, but how do you educate them and translate that skill set into something like technology startups?”  
Houston noted that Oklahoma already has an incredible network of resource providers across Oklahoma, with more to come. The state has several accelerators across the metros, both in Oklahoma City and in Tulsa. The pandemic has also pushed to make tools and resources more accessible by bringing them online.  

“Our universities are doing a great job of nurturing those ideas and helping our founders to start thinking about how to take those ideas to market,” said Houston. “We have a very robust SBDC network across the state of Oklahoma for businesses who are first starting and need help with business 101. So it’s a really exciting time to be in Oklahoma. I think that resource provider network is strong and getting stronger every day.”  

Melissa Houston will be speaking at the Oklahoma Venture Forum Power Lunch on Wednesday, September 8, 2021. The event will be open to guests both in-person and virtually via ZOOM. Houston said organizations like the Venture Forum create opportunities for like-minded people committed to growing this ecosystem to find ways to connect and network. Be sure to register for the event to learn what legislation and programs are in the works to help founders and funders and connect with other Oklahoma entrepreneurs.

Sean Kouplen: Growing Business in Oklahoma

A profile on Sean Kouplen written for the Oklahoma Venture Forum on the subject of Growing Business in Oklahoma.

For over two years, Sean Kouplen was the Secretary of Commerce and Workforce Development under Governor Kevin Stitt. Under this position, Kouplen was in charge of economic development for Oklahoma, which involved bringing new businesses and helping the existing businesses grow. During his tenure, he brought in 100 new companies.

“We had some really high profile recruitment efforts,” said Sean Kouplen. “You may have seen the Tesla effort. I led that effort and initially recruited them here.”

Although in the end, Tesla went to Austin, Texas, Kouplen learned Oklahoma could compete in the electric vehicle manufacturing world. He began to market to electric vehicle manufacturers and said there are “some big, big, big ones that are looking at this state now.”

While recruitment efforts were one aspect of Kouplen’s job, he learned Oklahoma’s major companies were founded and grew here, and so he began asking, “What programs can we use to help our businesses grow?” One of the projects Kouplen put together was a venture capital advisory council, which includes people like Rick Nagel with Acorn Group and Erica Lucas with Thunder LaunchPad, to name a few. They would put together monthly investment calls, where they would feature companies and have investors calling in.

One of the surprising facts Kouplen learned as Secretary of Commerce and Workforce Development was that Oklahoma could compete with anybody on a global scale in business.

“We are a very low-cost state. We have excellent educational institutions, excellent training,” said Kouplen. “We have excellent incentives for businesses that are either growing or wanting to move into the state. We’ve got a great location, great abundant natural resources, very flat organizational structure. I could get a company that was going to bring a hundred jobs to Oklahoma, in to visit with the governor in a matter of days. And you go to Texas, and they wouldn’t even talk to you if you don’t have a thousand jobs. And so I think that was a tremendous advantage.”

Kouplen believes one of the challenges the state faces in helping businesses is getting the word out about the available resources. He’s worked to centralize all those in one place at The website features both incentive and non-cash programs to help entrepreneurs. Some of the tools for entrepreneurs in Oklahoma Kouplen mentioned include 36 Degrees North, Love’s Innovation Group, Oklahoma Manufacturing Alliance, and Thunder LaunchPad.

“I visited with a company in Broken Arrow, Oklahoma, in my banking role, and they are expanding, building a big building. And they mentioned having a manufacturing plant in California, where they were very frustrated,” said Kouplen. “I laid out some of the things that the state could do to help them relocate to Oklahoma, and they had no idea. And I think they’re going to move hundreds of jobs here based upon one conversation. So that’s what I’m saying, in my opinion, we have the ingredients. We just have to continue doing a better job of packaging those and getting the word out through avenues like this.”

Sean Kouplen will be the featured keynote speaker for Oklahoma Venture Forum Annual Award Event on Wednesday, May 12th, 2021. Kouplen said he is excited to come to speak to Oklahoma Venture Forum about what he’s learned and what he sees in Oklahoma’s future.

Profile: Jay Martin

Jay Martin - provided photo

Improving Comfort and Lives in Prosthetics

Written by me for the Oklahoma Venture Forum.

During Jay Martin’s early days of his clinical work in prosthetics, he learned his patients’ functional abilities were limited not as much by their amputation as by the lack of technology available in the field. With his love of inventing, Martin saw an opportunity to advance the field of prosthetics to provide more comfort, more functional abilities, and quality of life back to amputees.

“We think of prosthetics as being a very high-tech field, there are some great advancements have been made in recent years, artificial intelligence and new control systems and robotic devices, but prosthetics, in my opinion, has really been a very stagnant field, and it’s very much in its infancy still,” said Jay Martin, founder of Martin Bionics. “I’d argue the vast majority of amputees, quality of life with prosthetics is but a shadow of what it could or should be if technology were further along.”

While Martin believes features like better control systems and better sensors are significant, the greater good revolves around socket comfort. The socket is the part of the prosthetic that the body interfaces with, and Martin compares conventional sockets to feeling like wooden clogs.

As Martin set out to improve the quality of life aspects in the prosthetics field, he got an opportunity to work with NASA on three different exoskeleton programs. One was an Iron Man suit for special ops SEAL Team Six, another was a fabric-based exoskeleton, and the third was an exoskeleton for astronauts.

“With all three programs, they were all very challenging in their own regards,” said Martin. “We created kind of what became the foundation for what we have now as the socket-less socket technology, which is our main product line. And really what I developed was I developed an understanding and awareness of how to connect man and machine with compliant, dynamic materials in a way that would achieve maximum comfort, but also maximum control and stability within the device.”

Compared to conventional prosthetics, the technology at Martin Bionics more modular. Their modular sub-components can be assembled with simple hand tools to fit and match the user. Martin said this bypass much of the fabrication processes needed to make conventional prosthetics, allowing them to fit their sockets faster, more efficiently, and effectively.

“We have a new generation of technology that we’re working on right now that expedites that process even further,” said Martin. “We’re already leaps and bounds faster than conventional fitting methods to achieve and can achieve greater results, but where we’re going is making it just faster and more efficient.”

One of Martin’s main goals for the company is an outreach program to serve patients in developing nations who don’t have access to prosthetics. Martin explained the problem is threefold. Most parts of the world don’t have a trained clinician who has years of experience fitting a hard piece of plastic to the human body. They also don’t have the tools or resources, or lab equipment to fabricate a conventional prosthetic. Lastly, they don’t have the funding to support buying the components.

“Our technology overcomes all three of those,” said Martin. “The hard cost of making our technology is very scalable. We can train a layperson anywhere in the world to fit our prosthetic technology and to provide a long-lasting, comfortable prosthetic, and we only need simple hand tools. We don’t need expensive fabrication lab equipment. Missionaries will backpack into villages and fit our socket technology on amputees in real-time with simple hand tools and have amazing results.”

Jay Martin will be speaking at the Oklahoma Venture Forum Power Lunch on Wednesday, April 14, 2021. Martin said he is excited to share with the community some of what’s unfolding for them at Martin Bionics. Be sure to register for the online ZOOM event to learn more about turning around a business, asking your questions, and networking with entrepreneurs in Oklahoma.

Profile: Stacy Eads

Expediting decision-making processes during stressful times with the OODA Loop

Written by me for the Oklahoma Venture Forum.

Before becoming an International Business Coach, Stacy Eads had been the CEO of a Norman technology company for over a decade when she fell in love with the book, Scaling Up by Verne Harnish.

“I grew Levant 600% of its size while I was a CEO, and I started to figure out that maybe that’s where my true personal niche lies and that I wanted an opportunity to maybe break away, become a coach, and be able to help more businesses than just be an employee of one company in particular,” Stacy Eads said.

For Eads’ presentation for December’s OVF power lunch, she will teach a tool that helps expedite decision-making processes during stressful times, especially with all of the pandemic’s pivots. The OODA Loop, which stands for Observe, Orient, Decide, and Act, has helped her clientele make better designs during moments of fight or flight.

“Whenever they have a year that’s like 2020 again,” Eads explained, “or all of the things that have been happening with COVID-19, they have a tool that they can go back to and say, ‘I know how to calm down. I know how to look at the facts. I know how to orient myself to those facts. Make a decision, act and start my loop again, so that I have a fast, quick decision-making tool that gives me confidence in my business to proceed.’”

Eads said one of the things she loves about the tool is that the first step is to make sure that you observe that you’re observing facts only. She explained that when people are in a crisis mode, their emotions are at play or there is competing information, and they’re unsure which way to go.

“We don’t want our emotions, we don’t want our opinions or what we think is going to happen, but we just want to observe the facts that are around us,” Eads said. “What do we know? And what do we not know? And that initial pinpoint of the exercise is one of the things that I think is the most fruitful.”

Stacy Eads will be speaking at the Oklahoma Venture Forum Power Lunch on Wednesday, December 9, 2020. Be sure to register for the online ZOOM event to learn more about OODA, ask your questions, and network with entrepreneurs in Oklahoma. As an Oklahoma City business coach and somebody who travels among North America helping CEOs, Eads is excited about having the opportunity to speak to the Oklahoma Venture Forum.

“Many of them might’ve even heard of the OODA loop before, but maybe they have not put it into the perspective of how to use the OODA loop within the year 2020, and within the type of anxiety that CEOs are having these days,” Eads said. “The types of pivots that they’re making during this pandemic. So I’m excited to take an old concept that’s been around for decades and maybe breathe in some new life into what the year 2020 has to offer.”

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