Riata Pre-Seed Fund
The Oklahoma State University (OSU) Riata Pre-Seed Fund provides early-stage Startup capital, typically even the first external investment, to support the entrepreneurial aspirations of any currently enrolled OSU student. This Startup investment, which can be up $25,000, must be capable of contributing to the achievement of key performance milestones that will advance the commercial viability of the Startup or new business opportunity. The Startup must be a scalable, for-profit business model targeting clearly identified market segment needs/problems. Startup applicants need to be scalable and possess the ability to achieve at least $1 million of revenue/year within 5 years, or raise in excess of $1 million in equity capital within 5 years. Ideally the Startup should utilize some form of innovation in delivering its business model and/or a product itself as part of their competitive differentiation. The Startup should have a strong dedicated student Founder/Co-Founders that have a strong connection to either the innovation and/or targeted market segment. This investment should have the capacity to make a significant impact on the company or any underlying innovation that will enhance the Startup’s future commercially viability, which includes positioning for future funding opportunities. The Riata Pre-Seed Fund can invest in a Startup attempting to commercialize either a student-owned or OSU-owned technology/innovation. For OSU student applicants utilizing an innovation based upon any OSU-owned intellectual property (IP), the Startup needs a letter of support from Cowboy Technologies, LLC. The OSU Riata Pre-Seed Fund may be used as follow-on investment funding to any OSU Technology Business Development Program (TBDP) commercial grant funding or Cowboy Technologies, LLC investment funding previously received.
The OSU Riata Pre-Seed Fund is open for applications three times per year, once each in the Spring, Summer, and Fall Semester. Prior to submitting an Application, a student applicant must secure and work with an OSU faculty/staff sponsor from the School of Entrepreneurship, Riata Center for Entrepreneurship, or Cowboy Technologies, LLC who must support your prepared application prior to submission to the OSU Riata Pre-Seed Fund. All submitted complete applications will be distributed to and reviewed by the designated members of the Riata Pre-Seed Fund Committee. The Committee will be comprised exclusively of external members of the School of Entrepreneurship Advisory Board who are experienced, private sector partners from a variety of industry sectors and commercial businesses. All selected applicants, as approved solely by this Committee, will be invited to make a live investor presentation to the Committee and subsequently participate in a Q&A session, at its designated location and time. This OSU Riata Pre-Seed Fund Committee is responsible for making all final investment decisions. Committee approved investments in Founders’ LLCs or C-Corps will be via Convertible Note. Committee approved investments in Founders’ OSU projects developing OSU-owned IP will be made via a Founder’s Agreement that includes the terms of a simple agreement for future equity (SAFE). The execution of these Committee investment decisions and terms will be managed by Cowboy Technologies, LLC, a for-profit business accelerator owned by the OSU Research Foundation.
- August 20, 2020 - OSU Riata Pre-Seed Fund application open; pair with OSU sponsor from School of Entrepreneurship, Riata Center for Entrepreneurship, or Cowboy Technologies, LLC
- October 1, 2020 - Application form and business plan including exhibits due by sponsor-recommended applicants
- October 16, 2020 - PowerPoint pitch presentation due by sponsor-recommended applicants
- October 22-23, 2020 - Live pitch to OSU Riata Pre-Seed Fund Committee by sponsor-recommended applicants and investment funding decisions announced
- December 11, 2020 - Final due diligence completed, investment closing document preparation and execution, investment funds deployed
- All applicants must have:
- One or more Founders or to-be Founders in the Startup are currently enrolled OSU students at the time of application.
- Completed meaningful “customer discovery/validation” research, through documented external customer interviews, that indicates there is a potential market/product fit.
- Developed a for-profit business model, as supported by a Business Model Canvas and/or a Business Plan, with the potential to achieve at least $1 million in revenue/year within 5 years, or raise in excess of $1 million in equity capital within five years.
- Never previously received angel or other institutional equity or convertible-to-equity investment funding, other than from Cowboy Technologies, LLC. Personal funds, or investment funds or gifts received from friends or family are not included in this restriction and are encouraged.
- Not received more than $100,000 in cumulative external commercial grant funding (SBIR, STTR, OCAST OARS, etc.), business competition winnings, and business loans.
- If applicants, individually or within the business, own all innovation in delivering
its business model and/or a product, or who have already commercially licensed IP
owned by another company or institution, the applicant must:
- Be structured as either a for-profit C-Corporation (C-Corp) or as a for-profit Limited Liability Company (LLC) electing to be taxed by the IRS as a Partnership or C-Corp.
- Be registered and in good standing with the Oklahoma Secretary of State.
- Have >50% ownership by Founders who are enrolled OSU students at time of application, established in a cap table within an executed founder’s agreement, operating agreement, or equivalent.
- If applicable, have an executed commercial license to practice any IP owned by another company or institution.
- If applicants are developing OSU-owned Intellectual Property (IP) not yet ready for
commercial license to a new company, the applicant must:
- Apply for investment funding as a technology development project at OSU through their OSU department. A founder’s agreement will be made among the Founders that contains convertible-to-equity investment terms relative to a future to-be-formed startup company which may license the OSU IP at a future date when commercially viable.
- Have one or more student Founder(s) that possess the technology expertise who could follow the technology out of OSU into an operational startup company licensing the OSU IP.
- Have previously filed an OSU Invention Record and Report Form (IRR) with the OSU Technology Development Center (TDC).
- Have received a letter of support from Cowboy Technologies, LLC.
- If not already working with an OSU Sponsor, contact firstname.lastname@example.org to request being paired with an OSU Sponsor.
- Interact and work with your OSU Sponsor to complete the necessary business startup research and supporting collateral materials, such as the Business Model Canvas, a Business Plan, financial projections, etc.
- Upon completing preliminary background research, all Sponsor-recommended applicants
must complete the Application. The Application package includes all of the following
and be submitted via email to email@example.com by the listed due date:
- Application Form (use template provided)
- Business Plan (use template provided that includes a Use of Investment Proceeds exhibit, Business Development/Commercialization Milestones exhibit, and Projected Financial Statements exhibit)
- For applicants applying through their company include: an executed Founder’s agreement, an Operating Agreement or Articles of Incorporation, a detailed Capitalization Table showing >50% ownership by student Founders who are enrolled as OSU students at time of application.
- For Riata Pre-Seed Fund Committee approved applicants, a PowerPoint Investor Presentation must be submitted via email to firstname.lastname@example.org by due date listed for the applicable Semester. The Presentation shall be 10 minutes maximum and will be followed by a Q&A session (succinct/creative/memorable coverage of the elements of your business plan).
Please contact the Riata Center for Entrepreneurship at (405) 744-7552 or email@example.com if you have any questions or require any assistance.
Those LLC or C-Corp company applicants selected to receive Riata Pre-Seed Fund investment, will be subject to due diligence and execution of a Convertible Note Agreement with terms to be defined on a case-by-case basis. The Riata Pre-Seed Fund Committee will specify the terms of the Convertible Note Agreement including length, interest rate, repayment terms, conversion discount and next qualified equity round. This Convertible Note Agreement shall be executed between the company with a person authorized by the company to execute such a document, and Cowboy Technologies, LLC, a for-profit businesses accelerator owned by the OSU Research Foundation.
Those OSU project team applicants developing OSU-owned IP as a project at OSU and not through a company, selected to receive Riata Pre-Seed Fund investment, will be subjected to due diligence and execution of a Founder’s Agreement that includes the terms of the simple agreement for future equity (SAFE). The Riata Pre-Seed Fund Committee will specify the terms of the SAFE including conversion discount and next qualified equity round. This Founder’s Agreement and its associated SAFE terms shall be executed among the Founders (enrolled OSU students and OSU faculty or staff inventors of the OSU-owned IP) and Cowboy Technologies, LLC, a for-profit businesses accelerator owned by the OSU Research Foundation.
Neither the Convertible Note nor the Founder’s Agreement with associated SAFE terms, requires personal guarantees by the Founders.