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|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.
Monday, July 13, 2015
BY CAMILLE GRIGSBY-ROCCA
Can the brave new world of neurotechnology help an OHSU surgeon find a cure for obesity?
Thursday, August 13, 2015
BY JACOB PALMER | DIGITAL NEWS EDITOR
Portland-based startup ImpactFlow recently announced a $5.7 million funding round. CEO and co-founder Tyler Foreman talks about matching businesses with nonprofits, his time at Intel and the changing face of philanthropy.
Wednesday, July 15, 2015
Former Governor John Kitzhaber's resignation in February prompted some soul searching in this state about ethical behavior in industry and government.
Wednesday, July 15, 2015
We asked readers to weigh in on the fossil fuel-green energy equation.
Wednesday, July 15, 2015
We asked readers how Obamacare has impacted their business.
Thursday, July 09, 2015
The sweltering weather didn't keep the crowds away. Although the numbers were down slightly from last year, the Oregon Food Bank raised $850,636 to fight hunger. About 80,000 people attended despite temperatures in the upper 90s.
Monday, July 13, 2015
BY SAM BLACKMAN
Storyteller-in-chief with the CEO and co-founder of Elemental Technologies.
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Yesterday, a divided National Labor Relations Board dropped another hammer on the employer community. In a long-awaited and much debated move, the Board jettisoned the decades old standard for determining when two independent businesses should be considered joint employers of an individual worker for collective bargaining purposes.
Transforming the culture of Oregon’s educational leadership.
The Board dismissed a petition related to efforts to unionize the Northwestern University football team.
Oregon Sick Leave is here, and changes to the federal white-collar worker regulations are on the way. This workshop will prepare you for both. We invite you to participate in an interactive discussion on how to start planning now for the future impact on your operations and finances.
Presented by OEN + CENTRL + YESpdx.
This Roundtable will cover numerous issues under the employer "shared responsibility" rules of the Affordable Care Act, including how to track the "full-time" status of variable-hour employees, temporary or seasonal employees, and employees who experience a change in status or a break in service. Additionally, we will provide a brief overview of Code sections 6055 and 6056, which require most mid-sized and large employers to submit their first information reports to the IRS in early 2016 regarding the health insurance coverage being offered to employees. We invite you to participate in an interactive discussion on how to prepare for the future impact of the shared responsibility rules on your operations and finances.