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OVERVIEW

The North Dakota Growth Fund ("NDGF") is an $100 million multi-stage investment fund that will seek to invest in North Dakota businesses and entrepreneurs. NDGF was created to further advance innovation and private markets investments in North Dakota by seeking investments that provide strong risk-adjusted returns and support the growing entrepreneurial ecosystem in the State. NDGF will do this by making targeted investments with venture capital, private credit (including venture debt), private equity, growth equity, infrastructure and real assets opportunities with a nexus to the State of North Dakota.

VISION

The North Dakota Growth Fund aims to invest up to $100 million over a five-year initial investment period in order to further catalyze the investment and entrepreneurial communities and expand investment opportunities in North Dakota.

MISSION

Through the North Dakota Growth Fund, 50 South Capital will make targeted investments in venture capital, private credit (including venture debt), private equity, growth equity, infrastructure and real assets opportunities in both companies and private funds that are either based in North Dakota or possess a significant presence in North Dakota. 

NDGF GOALS

  1. Deliver competitive investment performance for the State of North Dakota by building a prudently diversified portfolio.

  2. Drive economic activity in North Dakota by making investments in North Dakota firms in order to support the growing entrepreneurial ecosystem in the state.

  3. Foster a strong, vibrant ecosystem for entrepreneurs and raise the national profile of North Dakota's entrepreneurial ecosystem.

VALUES

50 South Capital seeks to optimize transparency, governance best practices, and alignment of interests when investing through NDGF. These values are essential to effective governance and investment outcomes.  

HISTORY

In 2021, the State Investment Board of North Dakota announced the formation of the North Dakota Growth Fund. NDGF was created to further advance innovation and private markets investments in North Dakota by seeking investments that provide strong risk-adjusted returns and support the growing entrepreneurial ecosystem in the state.

 

This historic commitment to North Dakota’s entrepreneur community is funded by the state’s Legacy Fund, which was created in 2010 and approved by voters in the same year. It is comprised of revenues generated from the state’s oil reserves and investment income.

 

The State Investment Board of North Dakota has committed $100 million of the Legacy Fund to the North Dakota Growth Fund with a targeted initial investment period of five years.

 

Investment STRATEGY

 

Ultimate portfolio construction may vary. For illustrative purposes only. Amounts are percentages of the total fund investment portfolio.

  • Targeted five-year initial investment period.

  • The minimum fund size shall be $10 million for North Dakota venture capital firms with a physical presence in the State. The minimum fund size shall be $25 million for North Dakota venture capital firms without a physical presence in the State but a track record of investing in North Dakota companies.

  • NDGF will not commit more than 10% of its total portfolio size to any underlying recipient fund.

  • NDGF will not commit more than 1/3 of its total portfolio size in any given vintage year.

  • NDGF will not invest more than $10 million in any single portfolio company.

  • NDGF 's fund investment portfolio will be diversified across vintage, stage, sector, geography and strategy.

  • Recipient funds and portfolio companies will utilize reputable third-party service providers.

 

Portfolio

 
 
 

INVESTMENT POLICY

 

The North Dakota Growth Fund Investment Policy is designed to ensure that the North Dakota State Investment Board, 50 South Capital Advisors, as well as any contractors SIB or 50 South Capital retains to provide services related to NDGF, take prudent, measured, effective actions while supporting NDGF. The Investment Policy is designed to allow for sufficient flexibility in the management oversight process to take advantage of investment opportunities as they arise, while setting forth reasonable parameters to ensure prudence and care in the execution of the North Dakota Growth Fund.

Please click here to access the North Dakota Growth Fund Investment Policy.

 

Investment ELIGIBILITY

 

STEP ONE: ARE YOU A “VENTURE CAPITAL FIRM”?

A “venture capital” firm makes equity or debt financings that are provided for starting up, expanding, or relocating a company, or related purposes such as financing for seed capital, research and development, introduction of a product or process into the marketplace, or similar needs requiring risk capital.  This includes, but is not limited to, financing classified as venture capital, mezzanine, private equity, private credit, infrastructure, real assets, venture debt, buyout or growth equity.

If you answered YES to Step One, move on to Step Two below.  If you answered NO, your firm is not eligible for an investment by NDGF at this time.


STEP TWO: IS YOUR VENTURE CAPITAL FIRM A “NORTH DAKOTA VENTURE CAPITAL FIRM”?

A) Does your “venture capital firm” have a majority (50%+) of its employees physically located in North Dakota?

If you answered YES to (A) above, you are a North Dakota venture capital firm and are eligible for an investment by NDGF.
If you answered NO to (A) above, please refer to question (B) immediately below.

B) Does your “venture capital firm” have at least one (1) member of its investment team physically located in the State? 

If you answered YES to (B) above, you are a North Dakota venture capital firm and are eligible for an investment by NDGF.
If you answered NO to (B) above, please refer to question (C) immediately below.

C) Has your “venture capital firm” invested in at least one "North Dakota company" (i.e., a company that is headquartered in or has at least one physical office and one full-time employee physically located in North Dakota) in each of its prior funds (on average)?

 If you answered YES to (C) above, you are a North Dakota venture capital firm and are eligible for an investment by NDGF.
If you answered NO to (C) above, please refer to question (D) immediately below.

D) Has your “venture capital firm” made at least one (1) investment in a North Dakota company in its most recent investment fund(s) with a demonstrated pipeline and network to further establish a track record of investing in North Dakota companies?

If you answered YES to (D) above, you are a North Dakota venture capital firm and are eligible for an investment by NDGF.
If you answered NO to (D) above, you are not eligible for an investment by NDGF at this time.

 

REPORTING REQUIREMENTS

 

  1. Any fund in which the 50 South Capital places money under NDGF shall seek to invest a multiple of the aggregate amount of investable capital that is received from NDGF in North Dakota companies during the life of the fund. 50 South Capital shall use its prudent judgment to negotiate with each recipient fund the multiple of investable capital on NDGF’s investment amount in North Dakota companies. Investable capital is calculated as committed capital (as defined in the recipient fund’s applicable governing documents) less related estimated fees and expenses to be incurred during the life of the fund. For instance, if NDGF invests $5 million in an NDGF recipient fund, the recipient fund shall endeavor to invest at least $5 million in North Dakota companies over the life of the fund. As such, NDGF shall endeavor to invest a minimum of $100,000,000 in North Dakota companies over the life of the program. 50 South Capital shall enter into certain side letter agreements with each recipient fund to ensure an alignment of interest in each firm’s pursuit of its North Dakota investment activity. 50 South Capital shall monitor each recipient fund’s North Dakota investment activity and report to SIB on each firm’s compliance with this Policy.

  2. NDGF managers will provide unaudited quarterly financial statements and capital account statements to 50 South Capital within 60 days of quarter end and audited annual financial statements within 120 days of year end.

  3. NDGF managers will provide quarterly reports on the diversification of recipient portfolio companies.

  4. NDGF managers will provide annual reports on the economic impact of recipient fund investments on the North Dakota economy, including the growth of the employee headcount at portfolio companies, the growth of their physical real estate presence in North Dakota and other associated economic data.

 

RESOURCES

 
 

News

 

NORTH DAKOTA GROWTH FUND ANNOUNCEMENTS AND NEWS

 

CONTACT

 

INVESTMENT OPPORTUNITIES

If you would like to receive additional information on partnering with 50 South Capital and the North Dakota Growth Fund, please complete the submission form below.