Research & Resources: Sabbatical Gives NMSU Professor Insight into the World of Venture Capital

Spring, 2005. Retrieved online March 15, 2005 by Ellen Davis NMSU Research & Resources

Ken Martin

Ken Martin

An NMSU business professor hopes the knowledge he gained on a recent sabbatical will pay dividends for those seeking help from the Arrowhead Center.

Ken Martin, a professor of finance in the College of Business Administration and Economics, spent the fall semester working for Flywheel Ventures, a four-person venture capital company in Santa Fe.

Flywheel is led by Trevor Loy, who moved to Santa Fe from California’s Silicon Valley five years ago. Loy selected New Mexico because he was looking for a place that was underserved by venture capitalists but had a lot of potential for economic development.

“New Mexico ranks very high in research and development assets per capita,” Martin says. “What we haven’t done a good job of is translate those assets into companies.”

Flywheel Ventures raises funds from both private and institutional investors and in turn selects start-up companies in which to invest those funds. They focus on new firms involved with information technology, software, semiconductors and advanced materials.

Martin says he proposed the idea of the sabbatical to Dean Garrey Carruthers after learning of a faculty member from the University of Richmond who had done a similar sabbatical. Carruthers put him in touch with Loy, who is on the Arrowhead Center’s Board of Directors. Loy, who has a long history of supporting academic institutions, was eager to have Martin join his company for a semester.

Martin says the experience greatly increased his awareness of how venture capital firms operate. He participated in the weekly conference calls the partners had (most of them are on the road all the time) and sat in on a “deal pitch,” in which a company came and presented its business plan to the firm in hopes of gaining financing.

Martin also worked on a research project for the company that he plans to continue for his own research. The project focused on social network analysis, or as Martin explains, “how who you know influences what you come to know.”

According to Martin, information seems to flow better in places like the Silicon Valley than in New Mexico. He wants to see the “knowledge liquidity” in New Mexico increased because this would greatly assist prospective entrepreneurs.

“One of the critical elements in starting a company is to have management talent,” Martin says. “We have lots of scientists and engineers in New Mexico, but not people with the management experience needed for start-up companies.”

Martin wants to find ways to lure back New Mexicans with such skills who have moved away. One way he thinks this can be done is by tapping into alumni networks at schools such as NMSU. He plans to pursue ways to make this happen.

He also plans to share what he learned about venture capitalists with clients who come to the Arrowhead Center. He says he can now tell clients what venture capitalists are looking for and help determine whether an idea is ready to be presented to venture capitalists.

And, more importantly, he has expanded his own network of contacts.

“If I don’t know the answer to something I know someone who does know the answer and that’s just as valuable,” he says.

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