ND funds “capital multiplier” for local entrepreneurs

Although software programs were available to plan asphalt work, crews on the job site often worked haphazardly, resulting in wasted time and lost profits, he said.

He said equipment needs, compliance requirements, weather variances and production targets were not considered at that level until problems arose.

“It’s always been reactive,” Uhri says, “doing something until it works, and then you have to change it.”

In 2017, Uori and his team began developing a software system that would consider all the variables at the field level and give workers better control over projects, but it didn’t gain much traction.

“We knew we had something really great, but we didn’t know anything about starting a software company or what that entailed,” he says. “I scratched my head for probably about a year.”

His idea, which would become Pavewise Software Systems, could have easily failed and stalled, but through an entrepreneurship program hosted by Generator in North Dakota in 2023, he was able to learn how to build the business, pitch it to venture capitalists and attract investors.

Since this push, the Pavewise management system and GroundTruth weather data collection tool have begun being used in projects across the state and the country.

He said that without participation in the Gener8tor program, this growth would not have happened, or would have taken much longer to happen.

Gener8tor, along with Lewis & Clark Agrifood Fund, Badlands Equity Fund, Longwater Opportunities and Homegrown Capital Fund, are the first group of investment vehicles selected by the Chicago-based field office of 50 South Capital to spearhead investments in North Dakota companies.

These are the seeds of a program the Legislature launched in 2021 to direct a portion of the state’s Legacy Fund oil tax savings account directly into in-state investments.

$600 million is expected to be pumped into the program by 2030. So far, $89 million has been put into those five funds and four other direct co-investments, with about $44 million fully deployed, said Cody Furst, local director for Dickinson-based 50 South Capital.

In addition to these fund investments, the Growth Fund has direct co-investments in four companies in the state: Bushell, Edgewood Healthcare, Midland Garage Door and Crusoe Energy Systems.

Of those funds, Lewis & Clark Agrifood has invested in Bushell, Longwater has invested in Midland Garage Door and Generator has invested in multiple companies, primarily through accelerator programs.

Generator’s first program is an intensive seven-week program for founders like Uri, where they’ll meet with more than 20 mentors and roughly the same number of potential investors, Furst said. Those who move on to the next stage will go through a 12-week accelerator program, get $100,000, and meet three times as many mentors and investors.

“That was super helpful for us,” Uhri says. “We found our lead investor, we found other investors, and looking back, if we hadn’t attended that first event, I don’t even know if we would have been a company by now. I never would have figured it out on my own.”

Furst said so far 14 companies in the state have received some of the direct investment funding, and more than 30 have been impacted by growth funds through the Generator program.

Some who follow the Legacy Fund have expressed concern about whether all of those investments will go to in-state businesses.

Furst said the Growth Fund’s investment policy statement specifies that all capital put into the program must be put back into North Dakota businesses.

“The work ethic is disciplined and thorough, to say the least,” she said.

Furst said the fund will focus on agricultural technology, drone technology, the energy sector and other areas that will drive the state’s economy in the future.

Another focus will be making sure investments are made across the state and not concentrated in big cities like Fargo.

“I’m a Class B guy from western North Dakota, I know what it’s like on an oil rig, and what’s been impactful for us is not just industry diversification, strategy diversification, but geographic diversification,” Furst said.

The Growth Fund’s initial contribution of $89 million has unlocked a further $136 million in investment for businesses across the state.

“When we talk about the Growth Fund having a capital multiplier effect, that’s what we mean,” Furst said. “The number I look at most — the one that has a proven track record — is the amount of capital that we’ve committed to invested in North Dakota businesses.”

Furst said 50 South Capital’s mission is two-fold: to make profits for North Dakota and to build supply chains for the state’s entrepreneurs by activating private markets and access to capital.

Jake Joraanstad, CEO and founder of Bushel, is also one of the beneficiaries of the in-state investment program and a mentor to other entrepreneurs like Wuori. Bushel developed an agricultural accounting system that helps farmers track weigh-in tickets and allows produce retailers to better track sales by providing accessible real-time data.

Joranstad said about 1,000 farms are using the company’s tracking tool, and about 100,000 farmers across the country are also using other management tools the company has developed.

“One of the challenges in North Dakota is the idea of ​​raising capital,” Joranstad said. “When I first started in 2016, 2017, I had to leave North Dakota to figure out where I could get funding.”

While there have been some angel investors in North Dakota, there has always been a gap at the next level, which would require potentially millions of dollars in investment, he said.

“There’s always been a gap in that space in North Dakota, but this growth fund has changed that by giving us the ability to write a multi-million dollar check from Lewis and Clark College with the backing of North Dakota capital,” Joranstad said.

Entrepreneurs have to learn sometimes the hard way, but not everything has to be learned the hard way, he said. Building a financing environment like the one the state has started with the Growth Fund is all about gaining experience, and for both entrepreneurs and investors to build on what they’ve learned and pass it on to the next generation.

“The result has been the biggest flywheel effect for entrepreneurs in our region,” Joranstad said.

Another entrepreneur who has benefited from the Growth Fund is Matt Dunlevy, co-founder of Grand Forks-based Aethero. Like Wuori, Dunlevy participated in Gener8tor’s accelerator program last year and benefited from having access to mentors and investors on how to take the next step.

Aethero uses drones, or unmanned aerial systems, to collect data on buildings to measure things like energy efficiency, make sure they’re built to spec, check older buildings for structural problems, and monitor energy infrastructure from the power grid to oil and gas facilities.

“We remain fortunate to have been in that first group,” Dunlevy says, “which helped us bring in a variety of investors, mature the company over the years, and understand what the future holds if we do it right.”

“Business-wise, this is unlike any bootcamp I’ve ever been to,” Dunlevy said, adding that the process has been a game changer for the company.

“Without them we wouldn’t be in the position we are in today and we’ve gained great satisfaction from the success we’ve had partnering with Gener8tor so far,” Dunlevy said.