Crop rotation: As previous seed funds move to later stages, more seed funds fill the void

Ask any Portland founder what their biggest challenge is and I will bet you that—nine times out of ten—the response will be “talent.” But if you ask them what else—besides talent—is keeping them up at night, the answer will be the same answer it has been since, well, since startups. “Money.” And that’s why it’s nice to see the funding environment here in Oregon continuing to mature.

Over the past decade, we’ve seen a natural maturation of the Oregon investment community. Where those who originally started as early stage investors have raised larger funds and, in so doing, have started writing larger checks for more established startups.

And what’s that mean? That’s right. That means there’s an opportunity for new investors and funds to fill that vacuum. And that’s exactly what’s starting to happen.

And two of those new early stage funds have been announced in the last week or so.

The first is the new Oregon RAIN (Regional Accelerator & Investment Network) fund under the management of long-time startup supporter and angel investor Nitin Rai. While the total size of the fund is not being disclosed, there are a few details emerging.

The fund is designed to:

  • Put funds from RAIN, foundations, private investors, and Oregon Growth Board to work
  • Invest in a variety of vertical, not just tech
  • Invest throughout Oregon and, potentially, the Northwest
  • Support traditionally underserved regions
  • Provide follow on funding

The second is the new $3 million Inclusive Startup Fund, which is in search of a someone to manage the fund.

The fund is designed to:

  • Support and cultivate entrepreneurs from underrepresented populations, like women and communities of color
  • Focus on seed stage companies
  • Cut checks from $20,000 to $50,000
  • Provide mentorship in addition to investment

Sound familiar? It should. It’s very similar to the beginnings of the Portland Seed Fund. And that fund has proven—with a number of interesting investments and successful exits—that this sort of model has a ton of potential.

So we’ve got seed stage funds that have matured to growth stage funds and a new crop of seed stage funds that are moving into the gap. That’s a good thing. Now all we need is some institutional level investment that helps shore up that need to for going out of state to find funding.

And once that happens, we’re getting closer to having a truly sustainable ecosystem.

We’re getting there. Please, please, please keep up the good work.

(Image courtesy of Brandon Price. Used under Creative Commons.)

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