Shark Tank investor lauds North Dakota opportunities, says state will soon be #1 in GDP growth

Photo by: Kevin O'Leary - Facebook
Photo by: Kevin O'Leary - Facebook

(Fargo, ND) -- Kevin O’Leary, entrepreneur and media personality, known widely for his role on the TV series “Shark Tank,” predicts that North Dakota will soon lead the country in a key category of economic growth.

O’Leary has announced that his company, O’Leary Ventures, will be investing in multiple initiatives within the state, and sees opportunity in digital currency, agriculture, and tech startups. The state of North Dakota is, in turn, investing in O’Leary, entrusting $45 million in public money for him to lure businesses to the state.

Appearing on AM 1100 The Flag's “What’s On Your Mind” program, O’Leary said of North Dakota, “It’s the greatest secret in America that nobody knows about, and I’m hoping to change all that. This is a remarkable state for pro-business policy, and we’ve got a whole competition going on in America about where money goes and it’s just getting more intense.

Since 1954 when they started keeping stats on venture capital, 95 percent of it went to 2 states, Massachusetts and California,” says O’Leary. “I wouldn’t put a dime into either one of those states today for 2 reasons; taxes are uncompetitive, and the regulatory environment is unstable, so it’s really hard to do business there. Also New York and New Jersey. You want to be in a place where tax is competitive but the regulatory environment lets you put money to work for 12, 15, 20 years. That’s this place…My job right now is not only to deploy this $45 (million), it’s to bring in sovereign wealth, pension, and institutional capital.”

O’Leary invested in a North Dakota based company 8 years ago and calls it one of the most successful ventures in Shark Tank history. “This state wants business. You don’t have AOC (Alexandria Ocasio-Cortez) here, you don’t have Elizabeth Warren, you don’t have crazy politicians; you have people that are open for business… I think what’s going to happen, in my view, is that the rate of growth for GDP (Gross Domestic Product) per capita in North Dakota is going to top out at number one in America probably in three to four years...people don’t get the joke here, they don’t know about the power of energy and this new carbon sequestration strategy. I think my job, and I’m just one voice, is to bring more money here to make this happen.”

Carbon Sequestration, also known as carbon management technology, has been heralded by the Biden administration as a way to improve the nation’s climate change outlook. Its climate, health and tax law of 2022 contained a series of carbon capture incentives, plus an extension of a federal tax credit. Carbon capture also has bipartisan support in the nation’s capital. Senators Bill Cassidy, (R-Louisiana) and Rep. David Schweikert (R-Arizona) recently joined Democrat colleagues in introducing bills in both chambers to provide tax credits for companies that reuse carbon. All 3 members of North Dakota’s congressional delegation have been consistent supporters of carbon capture, citing its ability to make North Dakota a state that can meet the demands of business partners and financiers with environmental responsibility standards.

O’Leary points to several other industries that could be attractive to massive sovereign and pension funds that manage tens of billions of dollars. He says with recent hits to major financial services and technology companies, North Dakota’s tax-friendly environment has great appeal. “Qatar and the Saudis put about $50 billion bucks into Credit Suisse just 90 days ago. Today its worthless….So they’re looking at other sectors, and people are starting to say ‘What else can we invest in long term’, and that’s where North Dakota comes into play. You’ve got energy, carbon sequestration, you’ve got ag, ag tech, you have fantastic sources of energy like low-cost natural gas, you’ve got pharma; nobody knows how big that is here, manufacturing vaccines, biotech, Microsoft’s second largest campus in Fargo so you’ve got coding. There’s a ton of stuff that doesn’t have to be volatile, that’s longer term duration, that I think a lot of sovereign wealth and pension would be interested in investing in. So I’m looking for deals that diversify us.”

O’Leary says the state has stable economic sectors that would be of particular interest to investors who have been burned by industries that have proven volatile. “Cycles come through and for the last decade it’s been tech, tech, tech. I tell everybody that I lost 30 percent in one month. I mean, the price of Facebook, the granddaddy, went down almost 50 percent in 2 months. That doesn’t happen to the value of the land you grow wheat on or oats, this is the breadbasket of America. Those are the kind of investments I’m looking for. I want stuff that’s more stable.”

O’Leary says the state-owned Bank of North Dakota is also an advantage to state’s economic consistency. “I want to remind everybody that this is the only state in the union with its own effective sovereign wealth bank. Banking is under scrutiny now. Regional banks all over the place are going under. Not here. You guys started your own bank in 1919 and you’ve had virtually no failures because it’s supervised and in a partnership with your own bank. Every state in the union wants their own bank now but they won’t get it. You can’t go back to 1919. I was telling (former Trump administration economic advisor) Larry Kudlow about the Bank of North Dakota, and he said you’ve got to be kidding me. I said no, and Kudlow you’ve got to come to North Dakota with me and check this out. This model is THE model for banking because they impose self-discipline on how they lend. Their books are not stupid. They’re not Silicon Valley (Bank). They’re not First Republic, they’re not Signature. These guys run a tight ship.”

O’Leary’s increased presence in the state comes on the heels of his involvement in the failed cryptocurrency exchange FTX. He admits to losing $18 million in that venture, but in a recent interview with Forum News Service, said he has different criteria for investing taxpayer money as compared to his own resources. When it comes to the state’s energy resources, O’Leary believes that many good days are still ahead.

“What people want now is clean energy so if you can show them that you can frack and take carbon emissions and put them back in the salt caves underneath the unique geology in this state so that you are generating low- cost energy that’s clean, there are a lot of people that want to invest in that. We’re going to need fossil fuels for the next 50, 60, 100 years. You don’t know when we can make a transition to other sources. You have to have energy security in America 100% of every year and every day, and that means we have to get to 18 million barrels a day, and we’re at 12 right now, and there’s a lot of investors like me saying wait a minute, it’s not about politics it’s about policy. The policy of any president of the U.S. should be energy security, our own energy not Venezuela’s, not anybody else’s energy; our energy and after that we can sell it to somebody else. That’s the key.”

O’Leary’s $45 million dollar fund recently announced its first deal to bring business to North Dakota.

“We just announced our first deal called Land Trust. This is a land deal. It’s basically the “Air B&B” for farmland. If you want to go hunting for aweekend, go to the land trust and book a weekend and hunt some elk or go fishing, but you’ve got to have the land and you’ve got to have the strategic investors and we brought both to the table. And that’s the idea. Bring more money to North Dakota because this state wants business.”