BIZTIPS - February 10, 2008
Biz Tips: Investors Agree That Things Look Different Here
Sunday, Feb. 10th, 2008
By Art Hill
Before Oregon adopted “We love dreamers” as a state slogan, the theme was “Things look different here.” The point was that Oregon is different because of its leadership in agriculture, natural resources, environmental stewardship, quality of life, etc.
But nobody ever accused Oregon of leadership in developing promising young companies – the next Microsofts, Googles, or Amazons. Oregon’s big hits can be counted on one hand (think Nike). Some led for a while but lost their edge (Pixelworks). Others are promising but still under development. Worse, some investors joke about Oregon as the “fly-over” state between thriving start-up centers in California and Washington.
Now all of that is changing. A recent workshop hosted by State Treasurer Randall Edwards and the Board of the Oregon Growth Account brought together top venture capital fund managers from all over the West. Their companies are valued in the billions and they invest worldwide. They deal in numbers with a lot of zeros, but every deal comes down to some very simple questions – does the young company have a solid product, a proven management team, and a market that matches its growth plan?
As one investor after another sketched their experiences with Oregon companies, a complete picture began to emerge. Some parts of that picture are not pretty. The Oregon Legislature only recently removed archaic limits on turning public university research into commercial products. The brilliant innovation that has flooded out of Cal Tech and UW is just starting to trickle out of Oregon’s universities, but dismal funding for public higher education still caps their potential.
According to investors, the quality of Oregon’s entrepreneurial talent is second to none. But with our total state population just a bit larger than metropolitan Seattle, the bench isn’t very deep. Most investors have to “drop in” their own seasoned managers to take promising companies to the top.
Perhaps the brightest part of the picture is the high score investors give Oregon for coordinating the resources young companies need at each step toward becoming the “next big thing.” One fund manager described his firm’s investments in Bi-Mart, Tidewater, Warn, and WinCo…all Oregon success stories. A start-up company owner told how the Oregon Entrepreneurs Network introduced him to investors and got him on the road to the $50 to $100 million needed to launch a new computer graphics chip design.
At the root of these and other wins has been the patient, methodical investment of a small slice of Oregon Lottery revenue by the Board of the Oregon Growth Account. Over $81 million in funding has been distributed to 14 investment firms for professionally managed re-investment in growing Oregon companies.
Investment professionals agree that Oregon has to make some serious progress in attracting experienced entrepreneurial company managers, in funding higher education as a source of “disruptive technologies,” and in getting more deals into the pipeline.
On the plus side, we’re doing everything right, we just need to do more of it…more smart investing, more political will to fund innovation, more opportunities to connect young companies with investors. The Oregon Growth Account Board is leading the way. These are the people behind Oregon’s economic future. They are a good reason why things really can look different here.
For more information on the Oregon Growth Account and how it helps developing companies fuel Oregon’s economic future, contact your Small Business Development Center or Oregon Growth Account Board member Stan Timmermann at (541) 276-0591.
Content © 2008 East Oregonian