How an unusually diverse team of VCs is putting $100M to work in Oklahoma

April 27, 2023, 10:30 AM UTC
The Tulsa-based Atento Capital team.
Courtesy of Atento Capital

In mid-September, more than a dozen team members from the Tulsa-based venture capital firm Atento Capital were situated at a table in the back room of Amelia’s Wood Fired Cuisine, a restaurant in the heart of the Arts District. They’re all explaining something to me: How in the world they ended up in Oklahoma.

Michael Basch, founder of the George Kaiser Family Foundation-affiliated early-stage venture firm Atento, worked on the 2016 Hillary Clinton campaign, then briefly ran for mayor in New York City (he dropped out before the election). Investor Rosa Hathaway was a 10-year aerospace engineer at SpaceX. Francis Jee, a former Deloitte consultant who did work for the World Economic Forum, made his way to Atento after growing up in England and Zimbabwe. About one-third of Atento’s team, including co-founder Will Gray, a former competitive tennis player, is from Oklahoma. But half of the investment team is international, spanning four continents—and they had to be convinced. After all, to work in venture capital anywhere outside of the coastal meccas of San Francisco, New York City, and, more or less these days, Miami, there’s got to be a pretty good reason.

Atento Capital, which just closed its first $100 million fund this spring, is unusual by any measure—not just because of its home base (other firms, including Columbus-based Drive Capital, also focus on investing in the middle of the country). Three of Atento’s five senior investors are women and people of color, as well as a majority of the rest of the firm. A core tenet of Atento is to be what venture capital often isn’t: inclusive. For the firm, that means open-door (and open-bar) DJ parties the first Friday of every month. They try to meet with founders in pairs—so investors can check one another to guarantee they are leaving behind the VC-jargon during pitch meetings. It means investing in emerging general partners like Forum Ventures of Visible Hands. It means investing in founders who have been overlooked for some reason or another—whether because of where they live, what they look like, or the problems they are trying to solve.

“It gives me goosebumps,” says managing partner Adele Weaver of the firm’s First Friday parties.  “It’s not what investing has looked like historically, which is exclusive. The culture that we have changed and are changing in Tulsa is: Hey, come on in. There’s somebody that likely looks like you at our offices. Bring your kids—there isn’t anything scary or intimidating.”

Atento has been investing off the GKFF balance sheet for approximately three years, deploying $128 million into a portfolio of 49 companies and 24 other VC funds. Now, with a $20 million pre-seed and a $80 million core fund meant for early-stage and fund-of-fund investments, each investment carries more weight in the overall portfolio. Basch, founder and managing partner, says the team is adjusting its processes and upping the scrutiny when it comes to follow-on investments. 

“The nice thing about a fund…is that you really can compare yourself to other funds after a couple of years,” he told me earlier this week. “You have benchmarks, and there’s a very defined, limited amount of capital, which, in a way, it really keeps you honest.”

Atento has backed companies including a husband-wife duo-founded education startup Boddle Learning, medication management company PatchRx, and Robbie AI, an A.I.-powered tech company for preventing patient injuries. When it leads rounds, Atento requires those companies to relocate to either Tulsa or, more recently, Northwest Arkansas, where the fund has set up a small satellite office in partnership with the Walmart heirs’ Walton Family Foundation. 

The new fund was raised entirely from Atento’s sole limited partner, GKFF, which is the foundation behind organizations like Tulsa Remote, which pays remote employees to move to the city, recruiting organization inTulsa Talent, or Holberton, a tuition-deferred computer science school. Co-founder Gray says software companies may be attracted to the more-affordable sales and marketing talent, and Tulsa’s manufacturing and aerospace ties stand out to some founders. Others, such as those running companies in fashion, may find more success building a company elsewhere.  

Some of the founders Atento is after might be turned off from Oklahoma due to its politics, particularly after the state passed sweeping anti-abortion legislation shortly after the Supreme Court overturned Roe v. Wade. “These are conversations that we have with founders and conversations that we’ve had with everyone on our team,” Weaver says. “This isn’t the time to say no, Oklahoma. This is the time to really focus in and say, okay, how can we support overlooked women in our community?”

For Atento Capital, Basch says its first vintage fund will offer legitimacy (Atento is also currently fundraising a simultaneous $10 million friends and family fund, and expects the first close in mid-May). But the more alluring feature of the venture capital fund structure is the new compensation model. Where most of the team had been paid on salary and bonus previously, nine of Atento’s team members will now have carry in the fund.

This is transformational for team members like Josephine Nelms, Director of Operations at Atento, who grew up in a single-mother home in public housing in Tulsa. Nelms is still paying off debt from putting herself through college, and says she has worked multiple jobs her whole life: from selling chronicles in public housing, to doing hair in middle school. Now, she says, her children will start out much further ahead than she could.

“For my kiddos, the possibilities are endless,” Nelms says. “We’re talking about what college you want to go to; what do you want to do in your future? What type of business do you want to have now?”

Back in Sept., the day after the dinner at Amelia’s, I was sitting down with Basch at Atento’s headquarters, located in a remodeled glass warehouse, that, according to historical fire insurance maps, was likely one of the buildings damaged or destroyed during the infamous and gruesome 1921 Tulsa Race Massacre. When we spoke, Basch was in the middle of trying to organize the new fund structure with GKFF.

As he talked about it, Basch spoke quickly—excitedly. It was hard to jot down what he was saying fast enough. But when he started talking about Nelms, who he describes as one of two key individuals making up the “backbone” of Atento’s culture, Basch suddenly went silent for the first time in our half-hour conversation. I looked up and caught a couple tears that had welled up in his eyes.

“She’s my inspiration,” he told me. “It makes me proud that she’s a partner at Atento Capital and will have carry in that fund. That’s what this is all about. I’m most proud of that.”

Subscribe to Well Adjusted, our newsletter full of simple strategies to work smarter and live better, from the Fortune Well team. Sign up today.

Read More

CryptocurrencyInvestingBanksReal Estate