|| 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.
Thursday, April 17, 2014
BY JASON NORRIS | OB BLOGGER
The “polar vortex” of 2014 seems to have finally thawed and we believe this change in weather will bring more sunshine to the U.S. economy as well.
Tuesday, February 25, 2014
BY LINDA BAKER
Les Schwab has put a premium on customer service since 1952, when legendary namesake Les Schwab founded the company with one store in Prineville. (Schwab died in 2007.) But if the corporate principles remain essentially the same, the world around this iconic Oregon business has changed dramatically.
Thursday, February 20, 2014
BY VIVIAN MCINERNY | OB BLOGGER
As retailers consolidate and newspapers fold, the business of modeling shifts to ad agencies, apparel companies and new media.
Tuesday, February 25, 2014
BY LINDA BAKER
A blueberry bush is a blueberry bush — except when it’s a blueberry tree.
Tuesday, March 11, 2014
BY MARK BLAINE | OB BLOGGER
The publisher of the Emerald Media Group moves on, leaving a cutting edge media group that depends on business acumen for its survival.
Thursday, February 27, 2014
BY ERIC FRUITS
Because they have little chance of working for someone else, today’s teens need to be entrepreneurs. But, first, we must teach our teens that entrepreneurship starts small.
Tuesday, February 25, 2014
BY JESSICA RIDGWAY
A self-proclaimed “chile head,” John Ford “grows, eats and does everything spicy.”
|How Doug Badger spends his downtime|
|Port at a crossroads|
|100 Best awards 2014|
|Our man in Congress|
|NASA discovers first potentially habitable planet|
|Effects of childhood bullying last a lifetime|
|Scientists make first embryo clones from adults|
|Man urinates in reservoir, ruins 38M gallons of water|
|Recreational marijuana use linked to brain changes|
|Former NYC mayor announces $50M gun law election push|
|U.S. consumer inflation rises: higher food, rent costs|
Marketing the state brings new business, new jobs and a better quality of life for everyone.
Living in the beautiful Pacific Northwest means enjoying our wonderful surroundings, while remaining aware of the multiple types of natural disaster threats that we face: winter storms, windstorms, floods, landslides, earthquakes, volcanoes and tsunamis.“
Oregon State University's hospitality degree program invests in next-generation leaders.
On Saturday, April 26, more than 1,900 local Comcast employees and their families, friends and community partners will “make change happen” as they volunteer to improve schools and nonprofits in Oregon and Southwest Washington as part of Comcast’s 13th Comcast Cares Day.
NAI Norris, Beggs & Simpson just completed their newly rebranded First Quarter Market Reports. Not only does it feature a brand new format, but the report ensures accuracy due to the annual truing up of their database.
Samuel Hernandez, an Associate at Barran Liebman, is the recipient of a 2014 Oregon State Bar Litigation Section Rising Litigator Award.