|| Print ||
|Articles - February 2011|
|Thursday, January 27, 2011|
Page 2 of 7How did they do it?
Investor and entrepreneur Eric Pozzo was the nominated chairman who led the Angel Oregon selection and investment process in 2005 as a volunteer with the Oregon Entrepreneurial Network. “We did a lot of research, found the companies to present, went into a room, voted and signed a big check to these individuals,” he recalls. “Everyone very much enjoyed it, and at the end of the process a lot of us wanted to do it year-round… We wanted to turn it from a small one-time pop to a well-organized machine that constantly cranks through deal flow and is very much investor driven.”
Pozzo’s ideas made sense to Eric Rosenfeld and his colleagues at Capybara Ventures. Rosenfeld had been wondering whether the traditional model of investing — “You surrender your money to a couple of smart people and they decide how to invest it on your behalf” — was becoming obsolete. Rather than perpetuate that model Rosenfeld was eager to embrace the lessons of the rise of Web 2.0, Google and Facebook: the “phenomenon of people wanting to contribute and share, not just to consume, but to be a part of something, and shape it.”
With those ideals in mind, Rosenfeld and his partners developed a new model for participatory investing. Twenty investors with deep collective knowledge of markets, technologies and business operations would put $25,000 each into an annual fund established as a limited liability corporation. They would pool their expertise as well as their money to research companies in depth, then vote on which ones to back, with a two-thirds majority required for the money to flow. The two-thirds threshold would set high standards, the size of the group would widen its perspective and the one-year nature of the fund would force decision-making. The entire fund would be invested each year, with a newly formed LLC replacing it in the following year. Entrepreneurs would be motivated to apply because the money is already in the bank waiting for someone to take it. Investors would be motivated to take due diligence seriously because it’s their money on the line. Everyone would be motivated to bring new businesses into the process, because the more companies that apply, the better the odds that one will succeed spectacularly. Individuals within the group would be more likely to invest on their own knowing the company had earned the support of a diverse collection of accomplished businesspeople.
They didn’t find 20 investors that first year; they found 36. They signed on the Ater Wynne law firm, the Geffen Mesher accounting firm and OEN as sponsors and made four investments in 2007. The state got involved as a non-voting member the following year, contributing matching funds from the Oregon Growth Account and treating them as a pure investment rather than the typical ribbon-cutting-style economic development project. Word spread, and the pool of investors grew. Today about 80 investors are involved. Most have voting rights although a few invest passively. The 2011 fund will exceed $3.1 million, with more than $1.6 million raised from investors, matched by $1.5 million from the state’s Oregon Growth Account. The plan is to invest $400,000 to $750,000 into four to five hot Oregon companies, selected for the talent of their teams and the quality of their ideas.
“We’re at a size now where someone in the room is going to know about any given market or technology that comes before us,” says Rosenfeld. “And if they don’t, chances are they will know someone who can help us understand it.”
The fund is managed by Pozzo, Rosenfeld, and Capybara associate Shannon Heim, who organize meetings and negotiate terms with the companies seeking funding. The investors range from retired executives with decades of experience to newcomers who have made millions in emerging web technologies. Among the more active members are Pixelworks co-founder Bob Greenberg, Intel Capital veteran Drew Smith, former Novas Software CEO Scott Sandler, Vesta CEO Doug Fieldhouse and retired marketing executive Donna Blake.
Greenberg, who retired from Pixelworks at age 44 in 2005, estimates he has invested about $250,000 in local companies since becoming involved in the angel fund. “I like the group, I like the process and I like the results,” he says.
Tuesday, August 19, 2014
BY TOM COX | OB BLOGGER
Tom Cox interviews Steve Balzac, author of "Organizational Psychology for Managers."
Wednesday, August 13, 2014
BY TOM COX | OB BLOGGER
When I say, “Your Employee is Always Right,” I do not mean “right about the facts,” but rather “right about how they feel” and “right about how they want to be led.”
Thursday, July 31, 2014
BY MARY SPILDE | OB GUEST CONTRIBUTOR
Faced with the aftermath of the “great recession,” increasing concern about the environment and dwindling family wage jobs, we have some very important choices to make about our future.
Monday, August 25, 2014
BY JASON NORRIS | OB GUEST BLOGGER
Ferguson Wellman’s investment views on the economy and capital markets.
Thursday, July 24, 2014
BY CLIFF HOCKLEY | OB GUEST CONTRIBUTOR
With the increasing retirements of Baby Boomers, a massive real estate shift has created a significant increase in demand for NNN properties. The result? Increased demand has triggered higher prices and lower yields.
Friday, August 22, 2014
BY CLIFF HOCKLEY | OB GUEST CONTRIBUTOR
When business intersects with family, a host of situations can arise. Without a clear vision and careful planning, hard-earned investments can become stressful burdens.
Monday, June 30, 2014
Oregon Business magazine won two silver awards for excellence in writing in the National American Society of Business Publication Editors Western region competition.
|The Private 150: Bigger But Leaner|
|The Perfect Food|
|Powerlist: Staffing Firms|
|Taxis Uber Alles?|
|FBI investigates JPMorgan 'cyber-attack'|
|GoPro launches camera dog harnesses|
|Snapchat now worth $10B|
|Tomatoes may lower prostate cancer risk|
|WHO: Ban e-cigarette use indoors|
|Burger King to acquire Tim Hortons for $11.5B|
|Burger King in talks to buy Tim Hortons|
Vigilant enters a New Year with a new president.
How George Fox has become one of Oregon's largest private universities.
Forest Grove sees growth in the burgeoning food and beverage scene.
Lane Powell Shareholder William T. Patton has been appointed to the board of directors for Cascade AIDS Project, an organization that provides educational services and outreach to thousands of Oregonians living with HIV/AIDS.
Fifty-one Lane Powell lawyers were recently selected by their peers for inclusion in The Best Lawyers in America® (Best Lawyers) 2015; of those selected, 23 lawyers are from the Firm’s office in Portland, Oregon.
Barran Liebman is proud to announce that Andrew Schpak, a Partner of the firm, has been named Chair of the American Bar Association’s Young Lawyers Division for the 2014-2015 bar year.