Oregon Angel Fund founder Eric Rosenfeld would agree that he and his band of intrepid investors are enticed by nanotechnology. He’s also quick to note, however, that OAF investors tend to gravitate toward Oregon industries “where there is already a concentration or cluster of talent to draw from,” i.e., not nano-inspired businesses. Since 2007, OAF has put together a fund each year (this year’s is $5.7 million with 130 investors) with the aim of making four to seven company investments, from $100,000 up to $1 million.
Prior to 2011, Rosenfeld says, OAF didn’t have particular investor expertise in the nanorealm; roughly 50% of the last two funds’ investments were in software-related companies. However, the due-diligence committee formed to explore investment possibilities in Portland-based Pacific Light Technologies helped shift that. OAF has given money to Pacific Light and NorthShore Bio, and now has an investment offer pending with bioMetric Holdings.
Rosenfeld, 48, says OAF searches for “showstopper” ideas among the 100 to 200 business plans they see each year. Intel alumni are a source of both investors for OAF funds and ideas for companies; Rosenfeld says Intel is almost like having a semiconductor university in the region.
“We see the really neat stuff, the nano innovations, happening at the intersection of different disciplines rather than within the core disciplines,” Rosenfeld says. “Like in the case of NorthShore Bio, where people coming out of Intel who understand semiconductors are coming together with others who get digital biology, to develop sensing ‘nanopore’ chips. And even Pacific Light, which blends expertise in electronics with advances in nano-level optics.”
Despite enthusiasm for OAF investments in these “intersection” nanocompanies, Rosenfeld is clear that an economic success is now needed, and the sooner the better.
“It’s still early, but we need a success and some wealth generation to initiate that cycle of wealth creation,” he says. “The cycle works in Seattle and the Bay Area, but it hasn’t happened here in nano.”
Practically speaking, without a nanocluster, whether in digital biology, electronics or some other area, supply chains don’t develop. Existing companies also have less of a local talent pool. In addition, as Rosenfeld explains it, OAF is typically a first or lead investor in local Oregon startups. As companies go through further funding rounds, however, Oregon’s venture capital community may not be big enough, and some startups may bow to demands to pick up stakes and move nearer the Silicon Valley investor community.
“We have the inklings, the embryonic stages,” Rosenfeld said. “But these days it actually takes a village to grow a successful company.”