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|Articles - February 2011|
|Thursday, January 27, 2011|
Page 4 of 7
People who get involved in the Oregon Angel Fund tend to get intensely involved. Many describe the group as a family — a large, boisterous family with strong opinions and lively debates, but also a prevailing sense of civility and decorum.
The fund’s investors meet eight or nine times per year and pore over between 80 and 100 business plans annually. They vote on which companies they want to present and organize due diligence teams led by volunteers with relevant expertise to research the selected companies. Then at the next meeting they entertain 12-minute pitches from top executives, followed by a question-and-answer session. The companies are excused from the room and the due diligence teams present their initial findings along with a recommendation to hold off or to intensify research. The group votes on whether to delve deeper.
Once the investors decide they want to learn more, they dig into everything they can find, posting their findings on a shared Angelsoft website. Investors read the reports and express their enthusiasm and concerns at the following meeting before voting thumbs up or down on an investment deal negotiated by the fund managers. “Sometimes it [fails] and there’s a sigh,” says Pozzo. “But when it happens there’s applause and we break open the bottles of wine. Then we call the entrepreneur and tell them, ‘Good job, we got the thumbs up. Now let’s get this deal done.’”
The process does not end once the deal is signed. The investor who leads the due diligence effort usually ends up with a seat on the company’s board. The operating ethic is to mentor rather than meddle; the motto: “nose in, fingers out.” Individual angels move outside the group to add new investments to the pot. And with the entrepreneur’s permission, the group shares its research with other outside investors to bring in new money.
These aren’t just feel-good processes. They’re designed for results. Rob Wiltbank, an associate professor of strategic management at Willamette University who has written several research papers about angel investing, says most individual angel investments fail but a diversified portfolio of angel investments can produce average returns of $2.50 for each dollar invested over five years. The catch is that about 10% of angel investments produce 80% to 90% of the returns. Wiltbank recommends investing in 10-20 companies to improve the odds of success.
Wiltbank says the Oregon Angel Fund's strategy of pooling expertise and refreshing the fund annually addresses the two most important rules of angel investing: to invest widely but also carefully. “I’m very familiar with the Oregon Angel Fund model and I’m a fan of it,” says Wiltbank. “The key is the people and the expertise they have.”
Rich Bader, a board member of the state's Oregon Growth Account, is also a fan. “The processes that the Oregon Angel Fund has put together are very sound,” he says. “We’re pleased with the quality of the investments they’ve made and the level of due diligence.”
Since embracing the investor-driven, participatory model, Rosenfeld says he has no interest in going back. “It’s like a private sector-driven stimulus with state support. It’s not coming from the halls of government. It’s coming from individual businesspeople who could be on their yacht in the Caribbean or in Palm Springs but instead are here in rainy Portland spending their rainy afternoons with us. It’s a statement that people care about Oregon and its economic future.”
Monday, July 07, 2014
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Named after the 2010 experiment by Thomas Ryan, "Robin Sages" are fake social media profiles designed to encourage linking and divulging valuable information.
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Friday, June 27, 2014
BY JASON NORRIS | OB BLOGGER
Over the last several months we have seen a wave of cross-border acquisitions, primarily U.S.-based companies looking to purchase non-U.S.-based companies. There are a few reasons for this, but the main culprit is the U.S. corporate tax system. The United States has one of the highest corporate tax rates in the world.
Thursday, June 12, 2014
BY ANDREA DURBIN | OB GUEST BLOGGER
Last week, the Obama administration took an important and welcomed step in the effort to protect the health and well-being of all Oregonians by limiting carbon pollution from existing power plants.
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Demand for organic food continues to soar: Last year, sales of organic food rose to $32.3 billion — up 10% from 2012. In Oregon, organic produce wholesaler Organically Grown Co. has been championing organic growing methods for four decades.
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BY VIVIAN MCINERNY | OB BLOGGER
Some people think Amazon’s winking eye logo is starting to look like a hoodwink.
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