Melissa Freeman, most recently of Oregon Community Foundation, joined Oregon Venture Fund to help the investor raise its next five-year fund and foster closer relationships with the fund’s institutional and large investors.
She will be overseeing the largest fund to date for OVF with a target of $50 million to $100 million.
This is the first time the fund, which started as Oregon Angel Fund in 2007, has had someone with a dedicated role for capital raising and investor relations, said fund co-founder Eric Rosenfeld.
“We’re excited to have Melissa join us to be more systematic and deliberate and with sustained outreach and investor relations,” he said. “We haven’t really done marketing or sales, we’ve been product-led, in the parlance of business.”
OVF typically raises an annual, which means the money raised one year is invested that year and anything left over is redistributed back to the roughly 180 investors in the pool. In 2018, the group launched its first multiyear fund to make it easier for institutional investors to participate.
That first five-year fund, called Fund XII, raised a total of $18 million and is in its final year. The group had targeted $30 million to $50 million for that fund. Though it came short of targets, it has invested in around 35 companies. The multiyear fund invests alongside the OVF annual fund in lock step.
This time around OVF has a larger target for the five-year fund, called Fund XV. It already has commitments from investors in the mid-$20 million range, Rosenfeld said. It’s already ahead of where fundraising was for the first multiyear fund, he added, and the lessons from that fundraising informed the decision to add Freeman to the team.
“The last fundraising we didn’t put a lot of effort into marketing the fund. It’s a new muscle for us,” he said. “We focused on existing relationships. With this effort we are trying to reach out and make it available for new relationships.”
For her part, Freeman sees this move as a natural next step for her work with entrepreneurship in the state. While at OCF she was most recently director of initiatives and partnerships. She organized the Oregon Capital Scan, a regular report that looks at the state of available funding for startups across Oregon. She was also an organizer of OCF’s Thriving Entrepreneurs program and the Oregon Impact Fund.
The people that both organizations work with are similar in that they care about Oregon and want to invest locally, whether its in for-profit or philanthropic endeavors, Freeman said.
“What I found at OCF is that OVF offered a unique way to put more of the endowment to work locally in communities,” she said. OCF was an investor in the first OVF multiyear fund. “I don’t believe that enough foundations have considered OVF locally for their investment portfolio.”
The minimum commitment for institutions in Fund XV is $1 million and $250,000 for individuals and families. The fund is expected to invest in between 20 to 30 companies in any sector across Oregon and southwest Washington. Check sizes range from $500,000 to $4 million.
The group notes that including follow-on investment OVF could invest $10 million in a single company over the company's life. About 41% of companies that receive an initial investment receive a second investment from the firm. Vancouver-based Absci received six investments from OVF before it went public last summer.
“Every region our size: Pittsburgh, Raleigh, Nashville, Salt Lake City, all have larger funds than OVF,” said Rosenfeld. “It shows the opportunity for us to be a more meaningful and impactful investor and an engine for innovation. It’s healthy to have more capital under management investing locally.”
Of the record amounts of venture capital raised by companies in the last several years, the vast majority of it has come from out-of-state investors, so when exits occur those returns also head out of state. OVF and other Oregon-based funds have been working to ensure more money is available locally so returns are more likely to be reinvested locally.
Within OVF’s portfolio of exited companies the founders have turned around and invested in OVF funds. Recent exits include: Wild acquired by Autodesk; Hubb acquired by Intrado; Inpria acquired by JSR; and Iotas acquired by ADT. Across all of its funds OVF says it is averaging a 23% annualized rate of return and 3.1 times total return net to investors.
