Serafina Lalany, executive director of StartupNWA, leads the Northwest Arkansas Council’s Onward FX events, which aim to bridge the early-stage funding gap for Arkansas startups. (Photo provided)
Finding customers, connections and cheap office space has been easy for the growing number of startups across the state. But securing early-stage capital is a different story.
Current numbers paint a bleak picture. Angel and seed investments in Arkansas fell to just under $8 million in 2024, down 62% from 2023, according to the 2024 Arkansas Capital Scan, released in December by the University of Arkansas Office of Entrepreneurship & Innovation and the Northwest Arkansas Council.
The average angel or seed investment dropped from $1.04 million in 2023 to just $529,000 in 2024.
The Capital Scan defines early-stage capital as pre-seed, seed and Series A rounds — typically the first $10 million raised by a company. Pre-seed rounds in the middle of the country range from $250,000 to less than $1 million. Seed rounds typically fall between $2 million and $5 million, with Series A reaching $5 million to $10 million. Seed rounds are considered the most risky venture investments, as startups often lack established products and reliable revenue.
“That is still the big hole — having people and organizations that are willing to make these risky investments into the founders,” Chad Brown, co-founder and managing partner of Little Rock’s Venture Center Arkansas Fund, said in an interview. “People are certainly willing to help from an operations standpoint and to make connections to people. But ultimately, these startups just really need cash.”
But Brown and other experts in the state’s startup scene hope the numbers will look a lot different in 2025’s report, as the year saw a concentrated effort to launch and expand programs designed to bridge the funding gap.
Bringing in Investors
One such program was Onward FX, which the Northwest Arkansas Council’s StartupNWA launched in 2025.
Led by Serafina Lalany, executive director of StartupNWA, Onward FX brings firms from across the country — as well as local venture capitalists — to Arkansas for programs and one-on-one meetings with startups.
StartupNWA curates the startup cohort and prepares investment memos with 30 to 50 data points on each startup — essentially playing the role of in-house analysts for the investors.
“By the time they come into town for that event, there’s so much conviction between the investor and the startup that we’re optimizing for a deal getting done in that setting,” Lalany said.
The opening session of Little Rock’s Onward FX event featured a panel with Miles Stephens and Bill Dillard III. (Photo courtesy of the Northwest Arkansas Council)
According to Lalany, 25% of the event’s participating startups have received a term sheet, or a formal intent to invest. Onward FX has hosted three events so far — two in northwest Arkansas and one expansion to Little Rock through a multiyear partnership with the Arkansas Economic Development Commission.
More than 2,500 startups from 48 states and three countries have applied for the event, but Lalany said they have to choose companies that fit specific criteria.
“One, are these companies venture scale? Not every company that applies is. What that means is, are you a high-tech, high-growth company? Are you a company that’s going to potentially grow 10X year over year? Is there huge exit potential?” Lalany said. “We’re also checking with the investor cohort so they can create a short list of the companies that they want to meet with.”
More than 500 one-on-one founder-to-investor meetings have been conducted since Onward’s launch. Lalany said the events have facilitated more than $17 million in total funding, primarily first-time raises, and that “dozens more deals” are currently being considered by investors.
Venture participants include Oklahoma City-based Cortado Ventures and Plains Ventures, Kansas-based Iron Prairie Ventures, Houston’s Mercury Fund and RevTech Ventures of Dallas.
“These firms have participated every single cycle,” Lalany said. Arkansas-based investors like the Venture Center Arkansas Fund and NewRoad Capital Partners of Bentonville have also participated.
Both the Venture Center Arkansas Fund and Oklahoma’s Plains Ventures invested in Bentonville’s Ordinal Technologies Inc., a software company helping governments leverage artificial intelligence.
Ordinal was introduced to Plains Ventures through an Onward FX event, with the firm eventually leading Ordinal’s $1 million seed round.
“When I worked for a startup in this region, raising VC seemed completely unattainable, like it was something that no one was ever going to be able to accomplish,” said Jacob Herrington, Ordinal’s co-founder. He spent a decade in the startup industry before founding his own company. “It’s never been better or more accessible to raise money in Arkansas. And that’s even true in what is currently the worst time to be trying to raise money.”
Homegrown Capital
Ordinal founders Jacob Herrington, Jacob Eubanks and Nick Spinazze (Photo by Kristen Herrington provided)
The Venture Center Arkansas Fund was founded in 2024, but started investing last year, raising $10 million to distribute to Arkansas’ early-stage startups.
The fund has made 13 investments, split evenly between northwest Arkansas and Little Rock. Its investments are pre-seed or seed, meaning the company has to have a viable product and some sort of customer, but it can be pre-revenue. The fund invests up to $250,000 for equity in technology-driven businesses headquartered in the state.
Portfolio companies include Ordinal, Sober Sidekick, WayPave, Servato, Participate, Ox, LexMed, Hightag, Lexamica, Kodiak Group, Lexalign and GoodChange.
Brown said the fund expects to be fully invested around the end of 2026.
“The main thing is [asking] do we need to raise some money for another fund to try to access more of these opportunities,” Brown said. He is also the vice president of private investments at Little Rock’s Circumference Group, which invests in later-stage companies.
“Maybe there’s an opportunity to have that synergy where you’ve got a company that’s at a point where Circumference could come in and do something, or some other later-stage funds in Arkansas could reinvest as well.”
Other local networks include Ark Angel Alliance, established in 2020, and 412 Angels, founded in 2022.
As far as venture capital beyond the early stages, the state had 18 venture capital deals that raised $260.6 million in 2024. That’s a 22% decrease in the number of deals from 2023 and a 27% decrease in the amount raised in 2023.
But while venture capital and angel investments lessened, crowdfunding increased 36.9% in 2024 despite little change in the number of crowdfunding campaigns. Font Awesome of Bentonville launched a Kickstarter campaign that raised $754,000. Troll Lord Games of Little Rock raised $303,000 in a campaign. And LIVSN Designs of Bentonville launched its fifth Kickstarter campaign in 2024, raising $168,000.
Looking Ahead
Lalany said her group spends “80% to 90% of our time” focused on increasing access to early-stage capital. StartupNWA has plans to continue the Onward FX events, potentially expanding into other states like Kansas and Oklahoma. “We’ve found this is a model that really works.”
Lalany also emphasized that the state needs to see more successful fundraises and startup exits.
“In order to be on par with our peer regions, like Nashville, like Dallas, we need to enable our startups so that on an annualized basis, our companies are raising over a billion dollars,” Lalany said. “We have a ways to go to get there, but I’ve seen it happen in other markets.”
Brown, Lalany and Herrington all said awareness remains part of the challenge, both for attracting outside firms but also local investors.
“Raising the profile of our entrepreneurs includes storytelling and making sure that they’re being seen by the investors,” Lalany said. “Those companies will eventually go public or get acquired and create massive exits. What that enables is actually more exciting to me. It’s the recycling of that expertise, the wealth, the talent that begets an even bigger startup community on the heels of that.”