As part of our close-out of 2022 and year ahead coverage, I checked in with five local investors to get their advice for founders looking to raise money next year.
I also asked about their own strategies for 2023 when it comes to what they are expecting and how they will be deploying funds.
So here is part two of my year-end check-in with investors:
Angela Jackson, Portland Seed Fund
What is your strategy for PSF next year? Is deal flow still there, or are things slowing at all?
We have strong deal flow and are on track to deploy more capital than forecast in 2022. In this market, we are able to get into later-stage companies with more traction at a lower price. This is great for our investors. We believe Oregon companies actually fare very well in these conditions, provided they didn't get over their skis spending too much cash without product/market fit. Our north star is and always has been to invest in seed/early stage capital-efficient companies with high growth potential, primarily in Oregon. Five of our last nine investments have a woman or person of color in the CEO role.
Nitin Rai, Elevate Capital
What is your strategy for Elevate next year?
We are focusing on supporting our top performing investments with bridge funding and helping them with strategies to survive the downturn.
Are you expecting any changes in deal flow?
Deal flow has grown even more and we expect to see a lot more deals.
Julie Harrelson and Robert Pease, Cascade Seed Fund
What is your strategy for Cascade next year?
Our strategy will be what it always is, to lean into our process, be deliberate and plan to fund three to five deals a year. The good news for Cascade is we are investing on a horizon that says it takes five to eight years to build value and we have a fund we are currently deploying.
What are you expecting in terms of deal flow, are you seeing any shift in the companies you are vetting?
We think deal flow will accelerate with all the smart people who are laid off or reconsidering their future. Historically, down markets have been a great time to start a business. The Pacific Northwest where we primarily invest has great talent and opportunity.
Diane Fraiman, Voyager Capital
What are you expecting for Voyager next year?
Voyager’s discipline over the last few years is now paying off in having the majority of our portfolio companies with plenty of cash and at valuations positioned well for the current environment. This allows us to continue to invest in the best deals over the coming year while having cash in reserve to support our existing companies. Bottom line, Voyager remains optimistic about 2023.
Deepthi Madhava, Oregon Venture Fund
What is the strategy for OVF next year?
Oregon Venture Fund invests along the continuum of a company’s early years, from pre-seed and early stage to growth and beyond. OVF strives to be the first institutional investor in top startups in our region.
We anticipate investing a record $20 million in the region’s most-promising startups in 2023 — that is, companies targeting large and growing market opportunities. OVF aims to invest in approximately four to six early-stage companies and four to five follow-on investments by December 2023. We will likely focus more on “must-have” solutions that can measurably impact the top and bottom lines of their customers.
Are you seeing any shift in the kinds of companies approaching OVF?
With our increased fund size, we now can invest earlier in a company’s lifecycle and invest up to $10 million over time in top performing companies.
While it hasn’t been a strategic shift, we have done more follow-on investments in the past couple of years. Opportunistically, we are investing more in the best companies in the market. Our bar for new investment selection is very high, giving us the opportunity to follow on and double down on many of our portfolio companies.
