Oregon hasn’t produced many high-profile start-ups in the past two decades, but among those that have thrived, a good portion have one thing in common: an early investment from the Oregon Venture Fund.
The regional firm manages $250 million in investments and says it has generated an average annual return of 34% for its investors since its founding in 2007.
OVF’s portfolio spans a full range of industries in Oregon and Southwest Washington – from boutique ice cream purveyor Salt & Straw to Newly launched public biotechnology startup Absci For semiconductor research company Inpria, It was sold last month for half a billion dollars.
“We get to pick the trash,” said Eric Rosenfeld, co-founder and managing partner of OVF.
The venture fund, which started as the Oregon Angel Fund, hopes to take it one step further. The company has added a new senior member from Silicon Valley, Allen Akintor, to lead its research into potential investments.
OVF aims to increase the size of its investment, from $2 million to $4 million now to as much as $10 million in the near future.
“The companies that we support here, they have competitors around the world that are likely funded at higher levels,” Rosenfeld said. Startups in Oregon need more capital available in their early stages in order to match the achievements of their competitors elsewhere.
Entrepreneurs have long complained that raising money in Oregon is a much bigger challenge than in neighboring countries.
Startups in Oregon raised just $744 million in venture capital last year, according to the National Venture Capital Association, compared to more than $5 billion in Washington and $86 billion in California.
But Akintor, who joined OVF in September to lead the due diligence process, said she wants to work in a field that is growing and growing.
“The Bay Area is crazy,” Akintor said. “I just wanted sanity.”
Top Oregon Venture Fund Deals
• Absci: a Vancouver-based startup that went public in July and has a market capitalization of $1 billion. OVF says that investors have made a return of 91 times on their initial investment.
• Gamma Software: It sold a Portland business software company to an investment firm in 2018 in a $200 million deal. OVF calculates the return of its investors as 37 times their initial investment.
• Elemental Technologies: Portland video encoding startup was sold to Amazon for $296 million in 2015 for $296 million. OVF return: 12x.
• Inpria: A Corvallis-based semiconductor manufacturing technology company was sold this month for $514 million. OVF return: 7.5x.
Akintur, originally from Rwanda, was a newspaper columnist, GE engineer, and fellow at the World Economic Forum before receiving her MBA from Stanford University last year. At mutual funds in the Bay Area, Akintur said managers are expected to stay on track — specializing in one industry.
The startup ecosystem in Oregon is not large enough for an investment manager to specialize in. So at OVF, everyone works across industries as the fund evaluates investment opportunities and assists the executives in the fund’s portfolio companies.
“For me, I actually like what intellectual allows on a larger scale,” Akintor said.
For industry expertise, OVF relies on its investors. Unlike larger funds, which have significant institutional backing, OVF’s capital comes from 180 regional executives and former entrepreneurs.
While OVF has become the most prominent domestic investor in Oregon, Akintore said the long-term success of regional entrepreneurship requires more competition. The new money in the Oregon market will bring more capital to local entrepreneurs and make the state a more attractive place to start an ambitious business.
“When you have more investors, you have bigger deals,” Akintor said. “And I think the bigger deals make the area more competitive.”