Each year, the Oregon Venture Fund raises a new fund to invest.
In 2022, the group has set a new standard. OVF’s 2022 annual fund of $15 million represents a significant jump from last year’s $11 million figure.
“It shows there are a lot of people looking to invest locally, which I love,” said partner Jon Maroney. “This whole mission of (showing) people how to invest locally, it’s really starting to pay out.”
It’s also part of an overall growth and maturity story for the Portland startup ecosystem in which several local venture firms, who bet on the region in the mid-aughts, are raising larger and larger funds.
Last week, there was word of Portland Seed Fund targeting a $20 million third fund. In 2021, Rogue Venture Fund announced a $30 million target for its fourth fund, and Elevate Capital announced it had raised $26 million of a targeted $40 million second fund. Although Oregon’s figures still lag funds in such cities like Seattle and Austin that raise hundreds of millions at a time, local funds are getting bigger.
The annual fund, all of which OVF will deploy this year, consists of individuals and family offices, with institutions involved through investments in OVF’s multiyear fund, which invests in lockstep with the annual fund.
This year, limited partners came in with larger amounts beyond the $50,000 minimum. In some cases, investors provided between $200,000 and $1.5 million.
While some new fund investors have invested locally, they've targeted other sectors, like real estate, said Maroney.
“We have a unique model and the results have been standout and people want to be a part of it,” he said.
OVF's portfolio logged several exits, including the now-public biotech Absci, event software maker Hubb (acquired by Intrado) and semiconductor materials maker Inpria, which JSR Corp. acquired for $514 million.
Those three exits generated a combined $1.3 billion in new wealth, according to an OVF note by operations partner Lynn Fletcher, with much of that wealth staying local. Additionally, the group stressed that it is committed to diversifying the demographics of its portfolio companies. To date, 33% of its portfolio companies are led or founded by a women and 22% by a person of color.
"While that’s considerably better than Silicon Valley, we know we can do better," the firm said.
OVF originally started as Oregon Angel Fund in 2007. Its annual fund counts about 180 individual investors who help the fund source and vet deals, as well as work with portfolio companies when needed.
The group is exploring an avenue that would investors to remain largely hands-off while remaining financial backers. The move could provide an onramp for those who want to invest locally but don’t have the time or expertise to be hands-on.
The larger 2022 fund will yield bigger checks.
At this level, the group envisions writing three $2.5 million or $3 million checks for Series A rounds, allowing OVF to lead or co-lead a round. It could write another three pre-seed checks in the $500,000 range to pre-revenue companies. And it could provide follow-on investments into existing portfolio companies in the $2 million to $3 million range.
Maroney said the group's deal flow remains strong. It invests across the board in software, life sciences, Internet of Things and consumer products.
Coming off the last two years and the effects of the Covid-19 pandemic, Maroney remains impressed with its portfolio company CEOs. No portfolio companies went out of business because of the pandemic.
“(CEOs) did what they needed to do to run a business through it. 2020 was hard on everybody. They positioned themselves well. Coming out of 2021 we see them positioned well for a next raise and rapid growth,” he said. “It’s a testament to the management teams in place at these companies.”
Some large venture capital firms in the Bay Area and Austin are warning companies to rein in spending amid rising inflation and other macro-economic factors. However, Maroney said he doesn’t see the same fears locally, in part, because area companies have always had strong fundamentals.
“We (the Oregon ecosystem) have never had the curse or benefit of unlimited spending,” seen in VC hubs like Silicon Valley. “Everyone has always had to run a real business and grow accordingly and responsibly.”
