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Achieving Economic Diversification in Indian Country

A column by David Kimelberg advising American Indians to diversify their business interests past gaming and other such niches.

A buzzword that has been gaining a lot of traction in Indian Country of late is “economic diversification.” This recent attention makes a lot of sense. Many of our Indian Nations have achieved significant economic success through gaming. This success has helped us move along the path to true economic sovereignty.

Our achievements in gaming and other discreet areas create a paradox: on one hand, they create needed revenues for nation and community building; on the other hand, they create vulnerabilities as our growing communities increasingly rely on single sources of revenue. As our gaming or other single industry businesses face increasing competition, legal challenges and regulatory changes, our exposure to sudden decreases in revenues rises. As most people agree, it is a dangerous position to have all of our eggs in one basket.

Most Indian nations understand the dangers of relying solely on gaming or other single industries for revenue that benefits our communities. The question becomes, how do we protect ourselves against this? The answer is economic diversification.

One method for diversifying our revenue sources is to invest in, and build, businesses in other industries. Some Indian nations have executed on this concept by establishing nation-owned holding companies that establish, or invest in, other businesses. These businesses often leverage the various and powerful sovereign advantages inherent in all Indian nations. My nation, the Seneca Nation of Indians, has gone this route with great success. We’ve built a number of successful companies in a diverse range of industries.

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The holding company route, however, takes a great deal of patience, capital and human resources. It cannot be done overnight and often takes years to reach full maturation. An Indian nation needs to identify the right people to successfully build and run these companies, which often takes significant time itself. Equally important, Indian nations need to commit to separating their businesses from their political institutions, which can often be structurally and culturally difficult.

There is another possible route that is both faster and easier to manage. This is a private equity fund, founded largely with partners within Indian Country. A private equity fund is a pool of capital from partners that is invested in various private businesses according to certain strategies. Certain private equity funds can be diversified to include a broad range of industries, giving their partners exposure to a variety of companies. By pooling their capital, the partners are able to create valuable economies of scale and investment power that cannot be achieved alone. Experienced fund managers use their proprietary networks to access well positioned companies, invest the capital in these businesses and then help the businesses achieve success. The result is that the partners in the fund receive returns across a diversified range of businesses. In addition, the partners can gain access to valuable and exclusive investment opportunities in single businesses that may make sense as a direct investment.

Some parts of Indian Country have achieved significant success in gaming and other narrow areas. However, we’re at a critical juncture. These industries are facing increasing competitive and regulatory pressure. It is important to execute on a diversification strategy. An investment fund can function as a complement to a holding company strategy or serve as a stand-alone diversification strategy.

The ultimate economic power of Indian Country lies in our collective strength. A bundle of arrows is stronger than just one. By pooling capital across Indian Country to invest together, we can create significant investment advantages that we cannot do alone. The whole is truly greater than the sum of its parts. Most importantly, we can better create diversified revenues for our nations and communities, and Indian Country as a whole.

David Kimelberg is an enrolled citizen (Bear clan) of the Seneca Nation of Indians. He is the CEO of Seneca Holdings LLC, the investment arm of the Seneca Nation, and the founder of, an online forum and blog about economic development in Indian Country. His views are his own and not necessarily those of the Seneca Nation of Indians or Seneca Holdings.