The Medical Center of the Americas Foundation launched the Ecotone Investment Fund, an early-stage venture capital fund based in El Paso, Texas in October 2021. The Ecotone Fund will provide high-value relationships between founders and assets in the El Paso region while investing in companies that have high investment potential. But what is a venture fund, why is it important for startups and the innovation ecosystem in the region, and why the Ecotone Investment Fund?
An ecotone is a place where two very different biological communities meet and interact, think of the beach and the ocean where tide pools are created. An ecotone can be a place of great diversity and is often richer in species than either of the communities that create them. The Ecotone Investment Fund will link tech ecosystems from around the country to the Borderplex region, thereby creating stronger tech startups, and increasing regional innovation capacity and resources.
A venture capital fund is a form of private equity financing. It is a pooled investment fund that manages money from investors seeking to obtain an equity stake in startups, and other early-stage companies that have high growth potential, therefore it is a high-risk, high-return endeavor. Generally this money helps early-stage companies build the infrastructure needed to grow their business and commercialize new ideas and technologies. Why is a venture fund important for local companies? Startup companies are crucial to the growth of the economy. However, without local funding these companies often move to areas with a more robust capital infrastructure that can help their company or idea grow, such as Silicon Valley, Boston and New York. Building a startup business is hard, and the innovation ecosystems in the El Paso region have suffered in the past as startups struggle to find capital to fund their businesses. VC capital provides funding, but it also generally brings with it mentorship, strategic assets, networks, and other resources necessary for success. The Ecotone Investment Fund provides access to locally source deals, but more importantly it will help build the regions innovation ecosystem by giving local companies increased access to talent, mentors, and critical networks.
Growing regional venture capital funds is one way to ensure that local startups stay in the region and build local technology ecosystems that will drive our economy. Successful startups add value to our community’s economic development by increasing living wage jobs and creating a culture of innovation that attracts R&D, higher-level manufacturing, and retains talented professionals. In addition to these economic benefits, a robust tech ecosystem attracts companies from outside the region to expand their operations in El Paso. For example, Curacubby and Fivestars, two high-tech startups in the Bay Area, have recently expanded operations in El Paso bringing jobs and connections from Silicon Valley to the region. Thereby increasing the regions overall innovation ecosystem and its ability to compete in the global economy and help create a climate where tech-based startups can thrive. In addition to supporting local companies, the fund would focus on supporting companies like these that are bringing innovation and economic growth to the region. The region has struggled to have venture capital funds available to startup companies. New local venture funds like the Ecotone Investment Fund will plant the seeds and further develop the innovation ecosystem, workforce and infrastructure needed to grow local startups and attract larger tech companies in the future.