For those of you not familiar with the OIF, it was a fund established by the state of Oregon in 2004 to reinvest a portion of the Oregon Public Employee Retirement Fund (OPERF) in Oregon and Pacific Northwest businesses—to the tune of $158 million in potential investment.
In 2004, the Oregon Legislature passed HB 3613 that allowed the Oregon Public Employees Retirement Fund (“OPERF”) to develop a fund-of-funds strategy specifically to take advantage of the private equity opportunities in Oregon and the Pacific Northwest (“PNW”). Managed by CFIG, the Oregon Investment Fund (“OIF”) commits capital to private equity and venture capital funds (“Underlying Funds”) that will, in turn, invest in companies located in the State of Oregon as well as the PNW.
Comprised of combined commitments of $150mm from OPERF ($100mm in Fund 1 and $50mm in Fund 1A) and approximately $8mm by CreditSuisse ($5mm in Fund 1 and $3mm in Fund 1A), the $158mm, return oriented program seeks to build successful, innovative enterprises for the benefit of its investors by:
Fostering the creation and growth of young and maturing companies in Oregon and the PNW
Encouraging the development and growth of a vibrant Oregon and PNW private equity community
Facilitating public and private partnerships within the State of Oregon
And one of the areas in which CreditSuisse has authority to invest? That’s right, you guessed it: high tech.
The high tech industry represents more than 50 percent of Oregon’s economic output and includes leading semiconductor manufacturers as well as makers of computer components. Semiconductor companies with operations in Oregon include, Intel, ESI and TriQuint, among others. These companies make up 10 percent of the annual semiconductor production in the U.S. Oregon’s computer component companies include digital projector manufacturers, electronic design automation leaders and liquid crystal display (“LCD”) makers. InFocus, Mentor Graphics, Planar Systems and Hewlett-Packard are among the corporations who represent the State’s computer components sector. Each of these companies presents a breeding ground for creative innovation to spur the development of new businesses and a growth economy.
Yeah, I hear you. I don’t see much about open source, Web applications, or Mobile development, either. And “InFocus, Mentor Graphics, Planar Systems and Hewlett-Packard… [presenting] a breeding ground for creative innovation to spur the development of new businesses and a growth economy”? Seriously?
Now, as anyone who has read Silicon Florist can attest, I’m not exactly the sharpest knife in the drawer. So this is where you come in. (See? Dangling preposition. I repeat: not sharp.)
I realize it’s terribly short notice. But I was wondering if I could get some of your input?
What would you like to ask CreditSuisse about the OIF?
Please feel free to comment or ping me on Twitter. I’ll do my best to ask your questions along with my own.
And rest assured, that once I’m done with the interview, I’ll no doubt blather on about it here, as per usual.
No, this isn’t some spammy email. It could prove to be true for startups in the Silicon Forest if everything goes right.
And it all begins with a very simple question: What could you accomplish with $250,000, this year? That’s what the folks at Portland-based Nedspace are asking, this Thursday.
Why? Because you may actually have the chance to get your hands on those funds.
Most importantly, though, the goal of this event is to prove to the State of Oregon that there are enough jobs, compelling ideas and entrepreneurs to warrant an immediate investment of $100,000,000 for start ups that want to hire local talent.
We are working to raise a $100M fund that makes small investments in Oregon-based companies who hire Oregon-based employees. Now, in 2009. Not next year or some point in the future. In growing these new startups, we are investing in innovation, creating jobs and building Oregon’s brand with innovators and entrepreneurs.
Oh, so now that question seems a lot more interesting, doesn’t it?
The event is a combined effort of Capybara Ventures, NW Technology Ventures, NedSpace, Oregon Angel Fund, Oregon Entrepreneurs Network, Reference Capital, Software Association of Oregon and Starve Ups. It will be held Thursday evening at Nedspace—right next door to the Lotus on SW 3rd.
If you would like to participate—and just between you and me, I think you should—be prepared to answer the following questions:
Could your company hire $250,000 worth of Oregon-based talent in 2009 to get it to the next level?
What could your company achieve during 2009 with a $250,000 investment?
How many new jobs would be created if 400 new Oregon startups were funded?
How would you like to see $100,000,000 invested in Oregon startups?
Last week, I had the opportunity to attend “Lunch with a VC” hosted by Carolynn Duncan of FundingUniverse and Epic Ventures. Carolynn took the time to field questions from a number of Portland startups and consultants on what it really takes to get a venture capitalist interested in investing in your company.
I thought I’d hit the high points, to help you get your head around what it’s going to take.
Think about these 10 things before you think about pursuing outside funding for your startup
Have you really solved a problem? Just because you see a problem doesn’t mean you’re the person to solve the problem. It’s far easier to criticize existing solutions than it is to invent your own solution. And even if you do invent a solution to that problem, there’s no guarantee that that’s a business.
Are you mentally prepared? Pursuing VC funding isn’t about self esteem. It’s about business.If you want someone to review what you’re doing and give you positive feedback, Silicon Florist may be a better candidate than a VC. A VC isn’t here to build you up or inflate your ego. A VC is here to figure out how you’re going to make money so that the investment firm can make money.
Are you ready for the oversight? Angels invest their own money. VCs invest other people’s money.As such, they’re going to have different types of involvement. And different kinds of goals. What kind of involvement and what kind of goals? Read on, gentle reader. Read on.
Can you deliver on the promise? Angels look for incremental gains. VCs look for exponential gain.But, rest assured, when it comes to investing, everyone’s goal is to make money. Angels are looking to invest time and money to get more money than they had. VCs are looking to invest far larger sums to make an exponential amount on their investment. Why? To make up the for the other crappy companies they picked that are failing to return anything.
Can you give up control? Angels are going to want more control because it’s their money. Why? Well, VCs invest other people’s money. Angels invest their own money. While both of those parties are going to be extremely interested in what you’re doing with their money, it’s highly likely that the Angel is going to be more involved—because Angels will be especially interested in keeping an eye on their personal money.
Can you tell the story of the money? The old adage hold true: It takes money to get money.As a rule, VCs don’t fund ideas. They generally fund things that are already making money. For VCs, an investment is an accelerator. They invest money in order to help the company make more money faster. Not making money yet? A VC might not be the right target.
Are you ready to make the VC pitch? To an investor, the “product” the investor is buying is the business. Not the actual product that the company sells. If you’re thinking of pitching a VC, don’t do the usual “show up and throw up” product demo of features and functionality. Give the potential investor a pitch on your business, moreso than that the product, itself.
Are you planning ahead or are you too late? Always pursue funding before you get desperate.Why? Well, two reasons. First, no one likes the stench of desperation. And second, it takes 3-6 months to do the due diligence on the deal before you can get stuff going. Don’t wait until it’s too late to begin the conversation. Better yet, begin the conversation before you need anything, at all. Work on your pitch and test drive it.
Are you ready to play the numbers game? How much of the final entity do you want to own? Take this into consideration… do you want to own 100% of a $1 million company, or do you want to own 51% of a $500 million company? If additional investment is going to make for an exponentially larger pie, then it might be wise to take a cut of the bigger pie, rather than try to horde the smaller pie. Angels and VC are interested in helping you build that bigger pie, so that everyone wins.
Are you foregoing a “great” funded company in favor of a “good” company that you control? A dead company doesn’t help anyone. The longer you can reasonably put off funding, the better off you will be. But don’t kill your company to retain control (see #9). If garnering additional funding ensures the fulfillment of your idea—even at a loss of control—funding may be the way to go. Bootstrap what you can, but not if it means the loss of your pursuits.
And that’s what I took away. But as always, that’s the high-level. For the deep dive, see Carolynn’s post.
Hopefully this overview helps. Interested in getting more feedback or answering different questions? Carolynn is planning to do this on a regular basis, here in Portland.
It would be great to have you at one of the future events.
Okay. So what’s being funded and why am I writing about it?
Utilizing general purpose, programmable “off-the-shelf” graphics processing units (GPUs), ETI software performs video encoding, transcoding, and filtering at unprecedented speeds while maintaining the highest video quality.
Who’s a-what-uh hunh? Okay. Maybe this will help:
[This technology] allows consumers to format their media up to 10 times faster than existing solutions.
Ah ha! Now you’re talking.
With the growing popularity of services like Seesmic, Vimeo (Portland connection), and Viddler—oh and that little site called YouTube—it’s obvious that video is very much a part of our future existence in the Web world. And while any number of companies have come up with ways to deliver that video content on the Web, there always seems to be one major sticking point to widespread adoption: Encoding video content for posting is excruciatingly slow.
To be successful, we’re going to have to be able to encode and upload video as quickly as we can download it. And Elemental may just be able to deliver.
The first product out from Elemental is consumer oriented, will arrive sometime before September and is expected to cost between $30 and $100, depending on the features. The software will allow consumers to take HD inputs such as a Blu-ray disc or homemade HD video and rip it to a computer, iPod or other device five to 10 times faster than existing technologies using the CPU.
No doubt, the infusion of cash will go a long way in promoting this offering—and ensuring that development continues.
In Oregon’s venture capital community, [Elemental]’s new investment represents the second big funding round this month. Last week, NexPlanar Corp., a small semiconductor company that recently moved to Hillsboro, announced it had raised $14.5 million in venture capital.
And let’s hope that greases the skids for other Silicon Forest startups looking for some backing.