As people try to rework and reimagine startup funding and venture capital, there are any number of interesting ideas coming to light. The latest comes not from the Valley but from our neighbor to the north, Seattle.
[Editor’s note: Thanks to Carolynn Duncan, Director, Portland Ten, for her assistance in covering OEN’s Angel Oregon, last week. Her recap and insights follow.]
This year, I was invited to attend OEN’s Angel Oregon, chaired by Angela Jackson, and the Oregon Entrepreneurs’ Network, and to write a guest article highlighting the experience. My hope is that you’ll get a quick download of the day’s events and outcomes, a taste for what the experience of being at OEN’s Angel Oregon is like from a blend of perspectives, a status update on Portland’s startup scene, and finally, that you consider attending and/or participating as an entrepreneur or investor at next year’s event. Read More
One of the most enigmatic components of any startup’s life is “funding.” Do I need capital? Should I pursue capital? How do I approach venture capitalists? Should I avoid venture capitalists? What are the benefits? What are the drawbacks? Necessary evil or rite of passage?
There are a ton of questions.
And unless you’ve been fortunate enough to learn the funding mating dance as part of another company, it’s a completely foreign—and intimidating—proposition.
Well, have heart Web-app-mogul-to-be. CenterNetworks is running a series on venture capitalists that may help inform your understanding of this strange and elusive beast.
The topic? How VCs get their money:
NYC Venture Capitalist Mark Davis is authoring a four-part series on how a VC is funded. Davis notes the four methods are: diverse limited partners, family office, government or public capital. Today, Davis looks at diverse limited partners. The other three methods will follow throughout the week.
I highly recommend you follow the series. Not only will this provide a great vantage point for helping you understand the motivations for the venture capitalist, it may just help demystify the whole venture capital question for you and your startup.
Earlier this week, I tried to shoot a hole in news that the “Web 2.0 sky is falling” by highlighting that Web 2.0 investments may be down in the Silicon Valley and Texas—but Web 2.0 venture amounts are up practically everywhere else, including the Silicon Forest.
In 2007, the median deal size was $5 million, up 22 percent. And the median pre-money valuation was $10 million, up 66 percent (from $6 million in 2006). Both deal size and valuation for Web 2.0 companies remained below the average VC deal across all industries ($7.6 million and $16 million, respectively)
But again, there’s a silver lining to this Silicon-Valley cloud. For us, at least.
Take a look at where the top investments landed. Lo and behold, there are two Silicon Forest companies on the list. Corvallis-based MyStrands appears on the list twice with nearly $50 million combined investment, and Portland-based Jive Software appears courtesy of their $15 million round, last year.
This is the kind of news that begins to put Portland and the entire Silicon Forest on the map. It’s news that, hopefully, makes the venture capital community take notice. And maybe, just maybe, the type of news that motivates those investors to take a second look at the Rose City technology scene.
I can’t wait to see what 2008 holds for our local companies. But the bar has been set. And I hope to see more than two of our companies on the list, next year.
(Hat tip Jeff the Great)