Lots of good analysis and insights popping up. Just last week we had the 2024 Oregon Innovation Index and the subsequent AI analysis of the findings and opportunities. And now local investor Elevate Capital has released their insights on the Oregon investor ecosystem and startup economy — and ways to improve it.
“One of the challenges for growth here, and there will be growth whether we control it or not, will be the alignment of private capital within the State, the attraction of private capital from outside the State, and the alignment of those two sources of capital with public capital,” said Rukaiyah Adams. “There’s a lot of community building here and growth on paper, but if the investing doesn’t come back financially, all the talk just doesn’t work. It’s been hard to have a conversation about what is investable for institutional investors. If we don’t have the return capital, it’s hard for CIOs to keep putting capital to work.”
Surprisingly, Oregon has done more deals compared to 2019 (66%) than either Washington (39%) or the U.S. as a whole (53%). However, this increased deal activity has come at the cost of real dollars invested. The average size of each deal nationally is up 28% compared to 2019 while it is down by 26% in Oregon and 13% in Washington.
One interpretation of this trend is Oregon startups attract less funding per round because they are either too early to gain much national attention or there are competitors elsewhere that are outperforming them. Support for this view comes from the breakdown of deals between Oregon and Washington. Oregon is more heavily weighted towards pre-seed and Seed deals while Washington has more presence in the Seed and Series A funding rounds.
“The strategy shouldn’t be replicating those models [in the Valley and North Carolina], the strategy should be, What do we have here that none of them have?” Rukaiyah said. “Our aspirations should be more in line with Taiwan and Singapore instead of Boston and Philadelphia. Our economy already looks East. But our thinking is geographically limited to our position in the United States. We need to be more ambitious about where we want to go with our economy than replicating other U.S. cities.”
Insights from Marcelino Alvarez, Monica Enand, Kanth Gopalpur, and Oregon State Treasurer Tobias Read also share their thoughts in the piece.
To read the entire report, visit “The Current State of the Venture Capital Industry: Oregon Trends and Challenges” from Elevate Capital.
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