The FDIC basic coverage has been increased from $100,000 to $ 250,000 through December 31, 2009.

For Banks that elected to participate in the transaction account guarantee component of the FDIC’s
Temporary Liquidity Guarantee Program all deposits held in non interest-bearing transaction accounts
are insured in full by the FDIC through December 31, 2009. Any of these accounts utilizing sweep
arrangements resulting in funds being transferred to an interest-bearing account do not qualify for the additional FDIC insurance guarantee. These accounts would still qualify for regular FDIC insurance
program. This program also extends this coverage to interest bearing accounts earning .50% or less and
IOLTAs maintained by lawyers for clients. If you have more questions on this you should speak to
your banker or contact BNC, who does participate in this program.

The CDARS service, which is made up of a special network of banks that can provide up to $50 Million of additional FDIC coverage for CD’s was not affected by the new legislation.

1-800-BNC-BANK
(1-800-262-2265)
322 East Main Avenue
Bismarck, ND 58501
Phone: (701) 250-3000
www.bncbank.com

By JAMES MacPHERSON
Associated Press Writer

BISMARCK, N.D. (AP) — Government scientists should try to find out how much crude can be recovered from a promising reservoir beneath North Dakota’s already prolific oil patch, Sen. Byron Dorgan says. The U.S. Geological Survey says a study now would be premature.
The Three Forks-Sanish formation is made up of sand and porous rock directly below the rich Bakken shale in western North Dakota.
“The question is: What’s there and what’s recoverable using today’s technology?” said Dorgan, D-N.D., who said he will make a formal study request to the USGS next week.
Rich Pollastro, a USGS geologist, said the federal agency does not have enough data for a comprehensive study of the Three Forks-Sanish formation.
“We would need at least five years of new history before we would even consider it,” Pollastro said.
Geologists and oil companies are not sure if the Three Forks-Sanish is a separate oil-producing formation or if it acts as a trap, catching oil that leaks from the Bakken shale above. Some say it could be a combination of both.
New horizontal wells aimed at the Three Forks-Sanish in recent months have been successful. But those wells came online after the USGS released a study in April that estimated up to 4.3 billion barrels of oil can be recovered in the Bakken, where oil-producing rock is sandwiched between layers of shale about two miles under the ground.
The potential of the underlying Three Forks-Sanish formation was factored into the agency’s estimate for the Bakken, though it was based on production from traditional vertical wells that were spudded decades ago, Pollastro said. The Three Forks-Sanish added about 500 million barrels to the estimate, he said.
The last formal study on the formation in North Dakota was done 40 years ago, Pollastro said.
Continental Resources Inc., based in Enid, Okla., said it tapped its first Three Forks-Sanish well in May in Dunn County. The well averaged about 700 barrels of oil daily in its first week of production, spurring the company’s stock to rise 23 percent. Continental, which is the largest leaseholder in the Bakken with more than a half-million acres, has since targeted 27 new wells at the Three Forks-Sanish. Fourteen of the wells are producing.
Continental spokesman Brian Engel said some wells in the new formation are outperforming Bakken wells.
“The results are even better, in some cases,” he said. “We’re quite pleased.”
Engel said a federal study of the formation would “educate the public on what we’re working with and it would bring a lot more knowledge to what we think is a new formation.”
The Three Forks-Sanish formation was first targeted in the 1950s, in an oil play known as the Antelope Field in McKenzie, Williams and Divide counties in northwestern North Dakota, said Julie LeFever, a geologist with the state Geological Survey in Grand Forks.
LeFever, who has studied the Bakken formation for more than two decades, said the state is doing its own assessment of the Three Forks-Sanish.
How much oil may be trapped in the formation below the Bakken is unknown. But LeFever said a comprehensive government study of the Three Forks-Sanish likely would spur more investment in North Dakota’s oil industry.
“Everybody knows there’s oil in the Bakken and the Three Forks-Sanish — to tell a geologist or an oil company that is not a news flash,” LeFever said. “I think this is something they can take to investors.”
The Geological Survey has called the Bakken formation the largest continuous oil accumulation it has ever assessed. Dorgan also requested the agency do that study, which took 18 months.
The state completed its own independent study of the Bakken formation at about the same time the federal study was released. The results were similar, though the state did not account for oil from the Three Forks-Sanish.
The Bakken formation encompasses some 25,000 square miles in North Dakota, Montana, Saskatchewan and Manitoba. About two-thirds of the acreage is in western North Dakota. Companies target the shale horizontally, and use pressurized fluid and sand to break pores in the rock and prop them open to recover the oil. The technology has come far in the past couple of years but is still being perfected, industry officials say.
LeFever said the Three Forks-Sanish is typically about 250 feet thick, and underlies the entire Bakken formation. She believes oil found in the Three Forks-Sanish has “migrated” from the Bakken over millions of years.
“I’m beginning to think a lot of our Bakken reservoir is in the Three Forks-Sanish,” she said.

MINOT, N.D. (AP) — An area near the Turtle Mountains in Bottineau County may be the next oil hot spot, the state’s mineral resources director says.

Lynn Helms said tests are planned in the next few months.

“We’re going to run some tests in some wells this winter and over this next year. We think there’s a second circle over here, south and east of the Turtle Mountains, that’s another hot spot,” Helms told the Minot Area Chamber of Commerce’s Energy Committee.

A Westhope company, will take thermal measurements, Helms said.

The companies doing most of the drilling in the Bakken shale formation in North Dakota signed two- and three-year contracts, he told the Minot group.

“So they’re committed to use that drilling rig for two to three years regardless of the oil price,” he said.

Many companies hedge their oil at $100 a barrel and sold future production for three years out at $100 a barrel, Helms said. That helps insulate them from a temporary drop in oil prices, he said.

Some companies acquired hundreds of thousands of acres in mineral leases for less than $100 an acre, Helms said.

“They do not want to go out and re-lease that land at 10 times that money. So they’re going to employ those drilling rigs to develop those leases at this point,” he said.

Recent oil development in the state has been focused on Mountrail, McKenzie and Dunn counties and across Fort Berthold Reservation, Helms said, In a couple of years, it will move into Ward, Mercer and McLean counties, he said.

While the projected activity depends on the price of oil, Helms said, “we truly believe, five years from now, people will have long forgotten $30 North Dakota sweet crude.”

OMAHA, Neb. (AP) _ A Nebraska economist says North Dakota was the only state in the region with an economic indicator of expansion last month.

Professor Ernie Goss of Creighton University said North Dakota was the only state in the Mid-America Economic Survey to have an economic indicator above growth-neutral. The figure dipped to 55.7 from 61.1 in October and 63.9 in September.

“Despite healthy growth for the rest of North Dakota’s economy, manufacturing employment declined 0.8 percent over the past year. However, I expect the state’s economy to grow, albeit at a slow pace, and its seasonally adjusted unemployment rate to remain at 3.4 percent well into 2009,” he said.

Looking at the other states in his survey, Goss said the primary index from the survey has plunged to its second record low in as many months. The November index hit 37.8, down 2.1 percentage points from October. Any score below 50 on the index, which ranges between zero and 100, indicates a contracting economy over the next three to six months. The regional readings are much lower than those recorded before and during the 2001 recession, he said.

States in the survey are Arkansas, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, Oklahoma and South Dakota.

Otter Tail purchasing wind project

Otter Tail Power Co. can buy part of a Luverne wind project near Valley City, state regulators say.

The Luverne project has a 157-megawatt generation capability and was proposed by M-Power LLC of Finley; M-Power has been selling ownership to local investors.

Otter Tail is buying 49.5 megawatts of production, including 33 turbines. The project will be the first community-based wind development in North Dakota, said Public Service Commissioner Tony Clark.

Drilling to hit record high

The state may set a record for drilling permits in 2008, according to the assistant director of the state Industrial Commission’s oil and gas divisions.

Bruce Hicks told the commission the agency will issue more than 1,100 permits in 2008; the previous high was set in 1981.

There are 93 rigs producing 178,000 barrels of oil a day in western North Dakota, according to Lynn Helms, state mineral resources director.

Recoverable oil estimates rise

The government recently estimated that 200 million barrels of oil can be recovered in the Williston Basin in North Dakota, South Dakota and Montana.

That’s compared with a 1995 estimate of 150 million barrels using technology at that time, according to the U.S. Geological Survey.

The estimate is separate of the Bakken shale formation assessment, completed in April, which said up to 4.3 billion barrels of oil could be recovered from that area.

Natural gas pipeline planned

EOG Resources of Houston wants to build a pipeline to route North Dakota natural gas into the Alliance pipeline.

The 12-inch natural gas pipeline could run for 75 miles from Palermo to Towner, meeting with the Alliance pipeline in McHenry County.

Pecan Pipeline will handle the $45 million project and expects to start construction in April, completing in July.

The project is in front of the Public Service Commission.

North Dakota wind center to double in size

Basin Electric Power Cooperative announced it will join with FPL Energy to expand the Wilton Wind Energy Center near Wilton.

The center will double in size in the next two years, said Ron Harper, CEO and general manager of the cooperative. There are 33 wind turbines in Wilton that began operating in 2006.

Basin is also in the process of developing an additional 300 megawatts of wind generation in both Dakotas, Harper said.

The company also has two coal-based power plants being developed: Dry Fork Station and one in Selby, S.D.

South Dakota pipeline task force cannot regulate

A pipeline task force created by the South Dakota Legislature was told recently that it cannot regulate construction and operation of interstate pipelines.

The state can ask the federal government for that authority, said state lawyer John Smith, lead counsel for the Public Utilities Commission.

The PUC has the authority to decide the Trans-Canada Keystone Pipeline route, but cannot regulate design and construction of the pipeline through North Dakota, Smith said.

The pipeline will run from Alberta to refineries in Illinois, Missouri and Oklahoma.

Keystone pipeline work halted

Wet weather has may halt work on the North Dakota part of the TransCanada Corp. Keystone Pipeline for the winter, officials say.

Jeff Rauh with Keystone said record rain falls prevented crews from finishgin come sections of the 30-inch pipe, which is based in Mekinock.

The Keystone Pipeline, projected to ship about 435,000 barrels of oil a day, is scheduled to be finished in late 2009 and will stretch from Hardisty, Alberta, to the Chicago area. The pipeline will extend to Cushing, Ohio, by 2010.

University of Wyoming partnership may lead to commercial use of clean coal technology

The University of Wyoming announced an agreement to further cleaner coal technology, partnering with General Electric to develop the High Plains Gasification Advanced Technology Center to accelerate the technology’s commercial use.

The new center will include a small-scale gasification system that will enable researchers from GE and the university to develop advanced gasification solutions for Powder River Basin and other Wyoming coals. The research may expand the range of coals that can be used with GE’s integrated gasification combined-cycle technology for power plants. The facility is expected to be operational by 2012.

- Briefs compiled by Business Watch staff and from the Associated Press

]]> http://www.ndbusinesswatch.com/nd-energy/weekly-energy-news/your-north-dakota-energy-news-week-ending-dec-5/feed/ http://www.ndbusinesswatch.com/business-news/business-news-editorial/five-creative-ways-to-start-a-business/ http://www.ndbusinesswatch.com/business-news/business-news-editorial/five-creative-ways-to-start-a-business/#comments Mon, 01 Dec 2008 21:23:18 +0000 admin http://www.ndbusinesswatch.com/?p=235 By Russell Smith, SBA’s Region VIII Administrator

Creating a start-up business during turbulent economic times can be a challenging task. But business ownership can be immensely rewarding, and with good business practices, the chances of success can be good. Research by the U.S. Small Business Administration shows that nearly three-quarters of all new businesses (with or without employees) survive two years or more, approximately half survive four years or more, and about 40 percent survive six years or more. Especially in times like these, people thinking about starting a business should understand the reasons why small businesses fail, and may want to consider creative alternatives to becoming a small business owner.

Top five reasons why start-up businesses fail:

1. Insufficient capital (money). Start-up businesses with $50,000 or more in initial capital have a much better chance of keeping their doors open. You will have to pay vendors, employees, utilities, rent, and a wide variety of other expenses. Plan on having a minimum of six months cash available to keep the business operating.

2. Lack of management experience. Many new entrepreneurs have the passion to start a company, but lack the day-to-day management skills to run a business. You may love to ski, and think you want to run a ski supply company. In addition to having a passion for skiing, you need to prepare yourself for the business aspects of starting a company too. Those include: understanding cash flows, marketing, and who your customers are.

3. Poor business location. If customers cannot readily find your business location, they won’t buy your products and services.

4. Poor inventory management. Too much inventory will kill your cash flow. This is an issue many new businesses have, and many owners have no clue how to manage it.

5. Lack of initial planning. This includes the misuse of personal assets to fund the business, how to handle unexpected sales growth, poor sales in the first 90 days of business, understaffing, and unreliable vendors. That is why our mantra is “business plan, business plan, business plan.”

Five Creative Ways to Start a New Business:

1. Purchase an undervalued existing business. During turbulent economic times, many owners may be forced to sell their businesses for various reasons. This creates an opportunity for people with capital to purchase an existing business on more reasonable terms than they would have paid a year ago. Other advantages for buying an existing business include:

· Established businesses are “ready for business” on day one

· Business assets and equipment may already be in place.

· Established client base. People are already aware that the business exists.

· Lenders will more likely provide financing to existing businesses.

· Trained experienced employees and staff are in place.

2. Exchange salary for equity position in business. Most existing businesses are hungry to hire experienced, driven and innovative employees. Cash-strapped businesses that are growing, but need new talent, may be willing to exchange an equity or stock position in the company in lieu of a traditional salary and/or benefits package. This new equity position could eventually provide an employee with an ownership opportunity in the company. Consider working part-time at a new start-up business, while maintaining your regular job, in order to learn the business and eventually make an offer to purchase the firm at a future time.

3. Virtual office is the wave of the future. There are many creative alternatives to the traditional office or retail space. The Internet is a great way to market, promote and distribute your products and services. Working from home, and utilizing “shared office services”, are other ways to create a virtual office space. Additionally, virtual offices may significantly reduce the cost of your start-up.

4. Establish alternative and innovative means to obtain capital. An under-capitalized business start-up is a losing proposition. This is especially true during the current economic times. Obtain capital by bolstering your personal savings in advance of starting your business. Friends and family financing is always an option. Friends and family may provide their money in exchange for a stock or equity position in your company. Or, start your business very slowly, and use the cash flow to build up over time, without taking on any equity or debt. The less debt you incur today, the better prepared you will be when the economy improves.

5. Leverage outside counseling before starting your new business. Now is the time to make an appointment with one of the SBA’s many resource partners – including SCORE and the Small Business Development Centers. We can help you develop a well-defined and comprehensive business plan, realistic financial statements, and an extensive marketing strategy. Studies have shown that entrepreneurs who put a minimum of one year of planning into their new business have a better chance of succeeding in their new ventures.

Starting a new small business can be a very exciting experience. Though the risks can be high, the rewards can be great. The SBA is here throughout the entire journey, and our goal is make the experience a good one. For more information on our programs and services, please contact your local SBA office or go to our website located at www.sba.gov.

(Russell Smith is the SBA’s Region VIII Administrator based in Denver, CO. His office is responsible for SBA programs in Colorado, Montana, North Dakota, South Dakota, Utah and Wyoming. He can be reached at 303-844-0500 or russell.smith@sba.gov)

(ARA) - As the world’s economy becomes more and more challenging, small business owners need to find ways to keep their business afloat. Here are some tips to maintaining good customer relations while managing the bottom line:

Invest in technology.

Maintaining your computer systems is vital to keeping your business running smoothly. If you’re not a technical whiz and you don’t want to pay for ongoing information technology support, consider Macintosh computers for your business. Although they cost a little more initially, many people find the investment pays back in ease of use and longer life. More companies are releasing business software that runs on the Mac and you can also use a program such as Parallels to run any needed Windows-only software on the Mac. Investing in technology will allow you to implement other cost-saving processes and programs.

Share files and data.

When you share a centralized database and critical files between computers, it can increase productivity. For example, if a customer gets a new phone number or moves, updating it in the central database that everyone uses will keep you connected to customers. “Synchronization and file sharing are easy and intuitive on the Mac and these were key reasons driving the move to Mac,” says John Ives, who runs a defense-industry consulting firm and recently made the switch to Mac.

Communicate with your customers and prospects efficiently.

In a tougher economy, don’t stop marketing, just do it more efficiently. Rather than sending out direct mail, consider e-mail marketing as a way to reach out to customers and prospects alike. Using a tool such as a CardScan contact management system, you can capture all your contact information electronically. Scan and read all your business cards with the card reader and use “drag-and-drop” to capture e-mail signatures or prospect contact information from Web sites. Using CardScan software, you can create and assign categories for your contacts. If you meet a group of prospects at a meeting, scan in the cards, assign the category with the meeting name and then you can send targeted follow-up e-mails to these prospects in just a few steps.

CardScan for Mac also keeps a photo of each business card, so you can flip through the various images of them on your computer, rather than losing them in a folder or a pocket. For business-owners on the go, the scanner plugs directly into your laptop’s USB power source, allowing you to scan your cards on a bus, in the hotel or on an airplane - before you return to the home office.

With over 7200 contacts, Ives, needs to be organized. Using a CardScan system, he quickly enters notes for contacts such as special interests or where he met the person. “I can type in a few letters or words and instantly find the one person I need with the CardScan system,” he says. “It’s very easy to use and synchronizing to Address Book ensures we are using accurate and up-to-date information.”

Get your business online.

Many small businesses put off building a Web site, or they let it get out of date because it costs money to maintain. But there are now many non-technical and free tools to build and maintain a Web presence. For example, using WordPress, an open-source blogging tool, you can build a blog that looks professional and is very easy to maintain. It’s also a more modern approach to communicate with customers and prospects.

Use inexpensive creative resources.

If you need photos, illustrations or graphics for your marketing materials or blog, resist the urge to use the amateur-looking clip art packaged with your software programs.  Instead try inexpensive online sources such as iStockphoto.com for low-cost photos and graphics, or tempatemonster.com for Web templates and blog themes.

Visit www.cardscan.com to learn more.

Courtesy of ARAcontent

When I ask them about their web site marketing plan, I get that look. First the eyebrows go up. Then the eyes glaze over for a minute. And then the stammering begins.

“Uh, well, you know - I have my URL on my business card.”

“I, ah, I’m going to start an e-mail newsletter.”

Some of them may even mention something about “search engines.”

But practically no one has a plan! And you know how the old saying goes: “Failure to plan is a plan to fail.”

Most small business owners I talk to are frustrated. They think their web site is a big waste of money. An “online business card.” A “marketing expense” that doesn’t return any of its investment.

And no wonder:

You’ve spent thousands on a pretty web design. You shell out dough each and every month for web site hosting. You may even be paying a webmaster to update the web site regularly. And month after month, year after year, the sales barely trickle in.

Marketing your web site is frustrating. It’s confusing! So we end up doing what all of us do when we’re frustrated and confused: deal with it “later.” And later never comes.

Know what? It’s not your fault! No one ever taught you how to market on the Internet, this new medium. (They sure didn’t cover that in my marketing class when I was in school.) And there’s all that hype on the Internet - so called web marketing gurus who’ve made millions online. But guess what? The only thing they’ve ever sold is reports and e-books on - what else - “how to market on the Internet.” They’ve never packed and shipped a box or ran down the street after the UPS guy.

But what if there was a formula you could follow, a step-by-step guide to creating an online sales machine?

After 10 years of marketing and selling on the web, I’ve boiled it down to a winning eight-step formula. This formula works for any web business, for any product from amber gemstone jewelry to zebra-print home accessories. In a nutshell, the eight no-fail steps of this formula are:

When you work each of these steps, your e-commerce marketing can’t fail.

Author Bio
Jamila White, “The E-Commerce Diva^TM“, helps small business owners develop their web marketing strategy to attract new customers and sell more products during her six-week “Supersize Your Web Sales”^TM Tele-Bootcamp. Learn more at www.ecommercediva.com/supersize

Article Source: http://www.ArticleGeek.com - Free Website Content

Except, that is, in North Dakota, and a few other energy exporting bright spots.

Financial institutions in the state, because of a basic conservative inclination, are steady. Collapse, so far, has only been for those in other states. And collapse is something we wish on no one. But North Dakota will not be able to avoid all the ripple effects. Already Bobcat has said it will shutdown operations in Gwinner and Bismarck from Dec. 15 to Feb. 15, because its customers can’t get credit. We are connected and interconnected in so many ways with the rest of the globe. In order for farmers in North Dakota to export their commodities, there must be people with the cash or credit to buy them.

The efforts made in recent years to diversify the state economy may do much to help the people of North Dakota as the globe recovers economic stability. Part of that effort has been aided by North Dakotans who have been willing to invest capital in startup businesses in the state.

In this issue of Business Watch, writer Lelan Bosch takes a look at some of North Dakota’s successful venture capital operations, including high tech possibilities, medical technologies and value added agricultural products.

We also look at some of the spinoff from increased oil industry activity in the Williston Basin. And contemplating needs in the face of an economic downturn, Business Watch’s Debora Dragseth reports and writes about charities and giving. After all, businesses are a major source of funding for the non-profit work done in our communities. This is certainly appropriate given we are entering the holiday season.

Readers also will find a story about how the community of Rugby has faced the challenges of maintaining a vigorous community on the prairie. Enough said, please read.

Ken Rogers
701-250-8250
ken.rogers@bismarcktribune.com

“We’ve invested in five entities in the past 15 months or so,” said Jerry Renk, leader of the Northern Plains RAIN® fund in Bismarck. “The common industries in which we invest are software, manufacturing and medical devices; similar to national trends. Some of the software and medical devices we have seen are amazing.”

RAIN funds are local investment groups operating under the umbrella of RAIN® Source Capital, based in the Minneapolis area. RAIN funds have operations throughout Minnesota, Iowa, South Dakota, Montana, Idaho, and other areas. In North Dakota, Bismarck, Fargo and Minot have established RAIN funds.

As leader of the Northern Plains RAIN fund, Renk helps organize about 20 investors in the Bismarck area, including a screening committee that is first to review and perform due diligence on proposals from prospective entrepreneurs.

Before investing in startup businesses, venture capitalists look closely at the proposed business plans.

“We look to see if the business’s leaders have thought about how much it will cost to buy raw materials and purchase the product versus projected revenue, whether they have created a marketing plan, and other factors,” Renk said. “If we have to spend a lot of time coaching them through the business plan, we probably wouldn’t consider it a safe investment.”

Renk, who is also president of BNC National Bank, North Dakota Market, is careful to point out that the investments he makes through the RAIN fund are personal ventures, independent from the banking business, and fundamentally different from traditional banking, as well.

“Venture capital is money that is not available through the normal financial investment channels,” he said. “Young entrepreneurs sometimes have trouble acquiring capital because the amount of risk is too high for banks. By acquiring partners and venture capital, however, entrepreneurs can raise the equity to get loans or start businesses.”

The RAIN Source Capital parent network assists local RAIN funds by providing an infrastructure that includes additional capital, legal templates, management expertise, workshops and networking opportunities, according to the Web site, rainsourcecapital.com.

RAIN® Street is a Web-based tool to help RAIN funds in different areas communicate with one another and discuss potential investments online.

For example, Renk said the Northern Plains RAIN fund might listen to a proposal and perform background research. Then, if the board decides it needs more capital or just wants to open the opportunity up to other RAIN funds, they can post the proposal and solicit responses from other RAIN Street users.

The RAIN funds in North Dakota especially stay in touch regarding ventures within the state.

“All of the entities we have invested in are in North Dakota, and some are from Bismarck,” Renk said. These new businesses create new employers, new tax payers, and it all trickles down to sustain economic growth in our communities, he said.

Within the venture capital industry, lenders are often called “angel investors,” a term that initially struck me as strange because I have never envisioned angels being wealthy business people who give people money to solve their problems, but Mr. Renk helped me see things a little differently.

“The reason I love my job is that I get to meet so many people (who) have great ideas, but sometimes they don’t have the funding to take that idea to market,” he said. “It’s rewarding to give someone who has an idea a chance to succeed. Hopefully, when these businesses grow, they reach out to the next round of startups, and the wheel keeps going around.”

In Fargo, one group of investors is starting to give back. James Burgum, former president of private equity firm Advenio Partners LLC and Doug Burgum, former chairman and CEO of Great Plains Software Inc., and Sr. Vice President of Microsoft Business Solutions Group, are co-founders of Arthur Ventures.

The group, which includes other investors, wants to invest in startup information technology, life sciences and clean or “green” technology, especially in the energy industry.

James Burgum, managing director, Arthur Ventures, uses Great Plains Software Inc., as an example of how difficult it can be to start a business. He said the software company’s executives struggled through 17-18 years of scary times before the business was stable, but now they can use that experience to help others succeed.

“We want to invest in technologies that have the potential to spark growth in entire industries,” Burgum said.

I have to take this time to admit that I once stayed up far too late watching a rerun of 60 Minutes, featuring Tom Perkins, former Hewlett- Packard (HP) executive and co-founder of venture capital firm Kleiner Perkins Caufield & Byers, and his 290-foot, $152 million yacht, which he built using the fortune he earned investing in startups like Amazon.com, America Online, and Google. Perkins’ story made me wonder if I might soon hear about North Dakota venture capitalists sailing big yachts.

Burgum admitted the business of venture capital in North Dakota has not reached the same level as the capital funds in Silicon Valley or some East Coast areas, but he said capital within the state has recently become more abundant, more accessible and more organized thanks to groups like RAIN Source Capital and other angel investor networks.

“Capital investment in North Dakota means building a partnership with the business,” Burgum said. “In addition to providing money, we also want to offer our expertise to help the company succeed.”

Burgum said these partnerships may mean one of the Arthur Ventures partners takes a seat on the company’s board of directors or at least observe board meetings.

Arthur Ventures recently made its first investment in Intelligent InSites, a Fargobased software company that makes all-in-one wireless nurse calls, security and access controls, and safety and assets management devices for the healthcare industry. As part of the partnership, Doug Burgum will take a seat on the Intelligent InSites Board of Directors.

James Burgum said that while he and his partners are very pleased with the business they have created and what they plan to provide the North Dakota economy, there are plenty of other lucrative projects in the state and a variety of financing methods to help get them going.

With energy and agriculture playing such large roles in the North Dakota economy, ethanol refi neries have become an investment type involving both those industries.

Ethanol plants in North Dakota vary in their financial structures. Some plants are owned by large corporations like VeraSun, based in Brookings, S.D., which owns an ethanol refinery in Hankinson and Archer Daniels Midland Company, based in Decatur, Ill., which owns the Walhalla facility.

In other cases, smaller investors like Harold Newman, Jamestown, and Gary Tharaldson, Fargo, have organized partners and capital to build refineries.

Newman, of Newman Signs fame, operates the oldest ethanol plant in the state, Alchem in Grafton, which opened in 1983 and produces about 10 million gallons of ethanol per year.

Newman also has plans to build a $260 million refinery near Jamestown and Spiritwood with help from partners and public investments such as the Jamestown/Stutsman Development Corporation. The 100 million-gallon-per-year facility would be located in the newly developed Spiritwood Energy Park with a proposal to use a nearby coal-fired power plant to generate steam to cook corn into ethanol.

Tharaldson began construction on his ethanol plant in Casselton in June 2007. The $200 million, 110 million-gallon-per-year facility is expected to open later this year.

In addition to these methods of raising capital, Frank Kirchenheiter, a rancher from southwest North Dakota, helped organize 800 farmers, ranchers and business people and raise $40 million in equity to build the Red Trail ethanol refi nery near Richardton in 2005.

While it does have a large number of member investors, the Red Trail plant is not technically a cooperative because it allows non-members to deliver commodities for refinement. Therefore, the company is structured as a Limited Liability Corporation (LLC).

In January 2007, the $78 million Red Trail facility began producing 50 million gallons of ethanol from 18-20 million bushels of corn annually, and Gov. John Hoeven named it the 2007 Project of the Year.

Now, other plants in development are being modeled after the Richardton refinery. These prospective projects include Yellowstone Ethanol, near Williston, and a plant near Gascoyne to be operated by Buffalo Creek Energy.

Of course, the ethanol industry has its skeptics. Uncertainty about government subsidies and volatile commodity prices have made people question whether the industry can sustain itself over the long-term.

Most recently, skeptics have questioned where ethanol fits in America’s quest for energy independence. After all, 2007 motor gasoline consumption in the United States was 3.4 billion barrels per year, according to the Energy Information Administration, and the estimated production of ethanol will be about 210 million barrels next year, according the South Dakota-based American Coalition for Ethanol. Therefore, it is a question whether ethanol can ever be a feasible replacement for fossil fuels.

Randy Schneider, President, North Dakota Ethanol Producers Association, said it is important to remember, however, that ethanol was never intended to be the one-size-fits-all answer to the energy crisis.

Ethanol production first took off in 1990, when Congress required oxygenates, like ethanol or methyl tertiary butyl ether, be added to fuel mixes to reduce pollution. Then, in 2003-2004, states started to ban MTBE because it was seeping into groundwater through underground gas station tanks, and ethanol became the additive of choice.

At that time, North Dakota farmers were also looking for a way to bring the price of corn at their local elevator closer to the price listed on the Chicago Board of Trade. Creating new markets with ethanol refi neries seemed like a perfect solution.

“In those days, fund drives used to be just an ad in the local paper and a meeting at the school gym,” Schneider said. “It didn’t take much for a gym full of checkbooks to raise capital.”

Today, as with most industries, debt and capital are harder to come by and people are more cautious about investing, Schneider said, but there are also new applications for ethanol being developed, including use in nanofiber technology, that are making the product an even more lucrative proposition.

Of course, alternative fuel is still a promising application for ethanol. While ethanol and bio-fuels may not completely eliminate U.S. dependence on foreign oil, Schneider believes it can come close.

“I think people sometimes look for a single ‘magic pill’ to fix our energy crisis, and that just doesn’t exist. A policy of energy independence will need to include, nuclear, wind, coal and natural gas power, and ethanol will play a major role as well,” he said.

Schneider said construction of pipelines would greatly benefit ethanol production because current transportation of ethanol by truck and train costs 10-20 cents per gallon, but a pipeline could reduce transport costs to 1-2 cents per gallon. He said once that technology is in place, investments in ethanol could become very lucrative.

Like corn farmers raised money for ethanol plants, in 1990, about 1,000 farm families, led by current Lt. Gov. Jack Dalrymple, pledged $12.5 million to build a $40 million durum mill and pasta plant near Carrington.

Dakota Growers Pasta was originally built as a cooperative to combat falling commodity prices and open trade policies.Dakota Growers Pasta company’s original growers’ agreement was for members to deliver one bushel of durum wheat for $3.85 in stock value.

In 1996, 1,085 members contributed $9.7 million equity at $3.80 per share toward an expansion to double durum capacity.

The company has since been privatized and has grown to become the 3rd largest pasta manufacturer in the United States, with plants in New Hope, Minn., and Minneapolis.

In addition to the eight workers who won the $200,000 lottery prize in December 2007, Dakota Growers Pasta has been profitable in other ways.

In 2001 and 2006, the company paid cash dividends to its members, and from 2003 to 2007, annual net revenues increased from $136 million to $191 million, and earnings per common share rose to 52 cents, up from a three-cent loss.

Dakota Growers Pasta company’s assets include an elevator, mill, four pasta production lines, and a warehouse – a model of vertical integration.

Vertical integration is the key component for any cooperative business because the more pieces of the supply chain members can control, the more value they can add to their product and the more they will profi t as a result.

The Dakota Prairie Beef Co-op, near Scranton gives ranchers more control over their cattle through the fi nishing process.

It was once a custom to haul cattle and feed to more southern states where they were closer to many processing and packing plants. However, the high costs associated with shipping feed and a growing number of processing plants in and around North Dakota made ranchers realize it would be more profi table to open a feedlot closer to home and ship the feeder cattle.

Planning for the feedlot began in the mid-1990s. Throughout one year, project organizers staged community meetings in North and South Dakota and Montana.

Ranchers could choose between two types of shares depending if they would be delivering a yearling or a spring calf. Between 145 members who initially purchased feeding shares and other preferred stock sold, the initial capital drive raised $500,000.

Farm Credit Services also lent $900,000 to get the project off the ground, and in 2000, the fi rst deliveries of cattle arrived.

Moving farther down the supply chain, the North American Bison Cooperative formed in New Rockford in 1993. The cooperative specializes in the processing of all-natural bison products.

About 330 ranchers in the United States and Canada purchased shares and promised to deliver animals to the co-op. NABC also invested in-kind funds equal to 10 percent of the ownership of the company.

NABC now operates in partnership with North Dakota Natural Beef (NDNB), LLC, Fargo, and the North Dakota State University Beef Systems Center of Excellence.

Although all-natural beef and bison are relatively small, niche market products, Dieter L. Pape, president/CEO of NABC and NDNB, said the company’s consumer research, combined with the North Dakota name have resulted in marketing success.

“Part of the allure is that we are North Dakota companies, and consumers trust North Dakota ranchers and farmers,” Pape said. “Understanding our customers has led us to develop brands and packaging that the consumer can identify with and meets their needs when they make their purchase decisions.”

Pape said NABC earned its fi rst profi t in 2007, and members were paid a patronage of 10 cents per pound.

“Both North American Bison Cooperative and North Dakota Natural Beef add signifi cant economic benefi t to North Dakota. For every $1 spent on harvesting, processing, and distribution, the state benefi ts with over $4 added back to the economy,” Pape said.

Even food retailers are getting into the cooperative capital investment business.

This summer, the Michigan Job Development Authority, Michigan, N.D., organized a fund drive to buy the property of Johner’s Fairway grocery store, which closed this spring.

The residents of Michigan, population 345, raised more than $163,000 to buy and reopen the store, which they lease for free to Fred Wangler of Casselton, who has experience operating six similar small-town stores.

Similarly, the people of Bowden, population 139, are trying to buy the town grocery store and run it as a cooperative rather than have people travel to purchase food. According to the Bismarck Tribune, a Bowden co-op board has taken over the lease, but would like to raise $62,500 at $50 per share to purchase the store and inventory and operate it as a formal cooperative.

From venture capital in high-tech industries, to helping to keep open a local store in order to buy groceries, these are just a few examples of North Dakotans exhibiting confi dence in their communities and local economies and fi nding ways to invest There are many other stories of successful cooperatives, equity fund drives, and capital investment in all corners of the state.

If North Dakota hasn’t been historically known as having the largest economy in the nation, I think its safe to say that its people and businesses have learned how to work together to invest and build for a better future. As our economy continues to grow, the lessons in cooperation that we learn now can only lead to better things in the years to come.