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|Articles - February 2011|
|Thursday, January 27, 2011|
Page 5 of 7
The first company the Oregon angels voted to invest in was Lumencor, a California transplant that developed a sophisticated light engine for bioanalysis. The husband-and-wife founders Steve and Claudia Jaffe reversed the prevailing migration pattern for growth companies by moving from Silicon Valley to Beaverton to build the company in December 2006. They placed second in the 2007 Angel Oregon contest, landed $197,000 from the fund in September of that year, and set to work developing, manufacturing and marketing their products, with help from mentors such as Pixelworks co-founder Bob Greenberg and later DesignMedix CEO and biotech veteran Lynnor Stephenson.
They also tapped into a talented pool of optics experts from a local community that has seen several big successes in that niche. It was not an easy time to launch an ambitious new business but the founders kept at it, and with time the product took hold. VP Claudia Jaffe says the company has been living off revenue since October 2009, and employs 15 people in Beaverton.
A more recent investment supported a similarly ambitious medical devices company called Clear Catheter Systems. Dr. Edward Boyle moved from Seattle to Bend in 2001. A cardiothoracic surgeon by training, Boyle teamed up with researchers from the Cleveland Clinic to develop a device that prevents blood in catheters from clotting (these clots can lead to expensive and dangerous problems for patients and sometimes death). The company’s product, PleuraFlow, received FDA approval in December 2010.
The Oregon Angel Fund invested in Clear Catheter last year and placed 40-year medical device industry veteran Jim Fee on the board after Fee led the due diligence team. Boyle says Fee’s experience proved a huge asset as the company moved to hire the right sales executive to ramp up marketing after FDA approval. “Jim was very involved in helping me draw up the job description and recruit the right person. It was good to have him in the room, and I think it was good for the applicants to see him there too. We made the hire and he’s been doing great.”
Of course, angels do not give away their money and expertise for free. Entrepreneurs must work hard to earn their support, often coming before the group multiple times before landing an investment. And the terms of the deal don’t always please the recipients; at least one growing company, advanced food processor Columbia Phyto Technology, recently turned down an OAF investment because the founders were uncomfortable with the terms. Other entrepreneurs get put through the wringer repeatedly, revealing insider details about their nascent companies, only to be voted down in the end.
But the process is challenging for several reasons. First of all, the angels want to make sure they are investing in the best of the best. Secondly, they want to help the businesses that don’t make the grade to improve their plans and apply again. Giftango CEO David Nelsen, who has managed to expand aggressively during the downturn thanks to angel support, describes the process as worth the effort. “It’s more than them just giving you money,” he says. “It’s them taking you through a process that makes you a better entrepreneur.”
OAF invested half a million dollars in Giftango in 2009, and outside investors followed that up in 2010 by pouring in another $5 million. That money enabled the electronic gift cards company to expand into a new office near PGE Park in Portland and grow to 17 employees in time for the holiday rush season. Nelsen credits the Oregon angels with enabling that growth. “After having gone through that process with OAF, our series B round was pretty easy,” says Nelsen. “It made things easier for us at the next level.”
Other local companies have enjoyed healthy success since receiving backing from OAF. Portland-based Jama Software, which received $400,000 from the fund in 2008, has grown from eight people to 20. “Their revenues have quadrupled since we started working with them,” says Drew Smith, who led the due diligence team and sits on Jama’s board.
Another rising star from the OAF portfolio is Portland-based Elemental Technologies, a video processing business led by some of Greenberg’s former colleagues at Pixelworks. Elemental has raised $15 million and is aiming for $10 million in revenue next year. “They’re off to the races, and it’s great to see,” says Greenberg. He led the due diligence team for Elemental and serves on the company’s board.
Greenberg spent 20 years growing with InFocus and Pixelworks before delving into investing. He says he is more than happy to share his experience with the next generation of entrepreneurs. “We need people who have gone through the mill to nurture the next InFocus and the next Pixelworks,” he says. “We need more of those successes in Oregon.”
Thursday, September 25, 2014
BY LINDA BAKER
Two businesswomen, two iconic food brands and one food-obsessed city. We thought this sounded like a recipe for good conversation. So in late August, Oregon Business sat down with Wendy Collie, CEO of New Seasons Market, and Kim Malek, owner of Salt & Straw, to discuss their rapidly expanding businesses and Oregon’s trendsetting food scene.
Friday, September 26, 2014
BY JASON NORRIS | GUEST BLOGGER
This post focuses on the recent release of the new Apple iPhone as well as Alibaba's IPO, the largest U.S. IPO in history.
Friday, September 19, 2014
BY TOM COX | OB BLOGGER
How can you tell if you, a peer, a subordinate or a job candidate has the emotional intelligence needed to do well?
Thursday, September 25, 2014
Nick Herinckx, CEO of Obility, and Jake Weatherly, CEO of SheerID, share what they've been reading.
Tuesday, August 26, 2014
BY VIVIAN MCINERNY
Craft beer comes to Mount Angel.
Tuesday, August 26, 2014
BY KIM MOORE
The ubiquitous fast-food restaurant may be on the decline.
Wednesday, October 15, 2014
BY DIANE BUISMAN
Some common misconceptions employers have about marijuana.
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