Author: [none given]
Amid the prevailing bad karma for Oregon businesses, here's something about which to feel encouraged: Venture capitalists are feeding money again to young companies in the state. Results from the first half of the year show 13 Oregon companies raised a total of $106 million from venture investment firms.
That's not a huge number in a place like Silicon Valley or Seattle, but by Oregon standards, it represents a nice rebound from two dismal years for start-up companies that had to hunt for the money they would need to grow.
Oregon's first-half results are dominated by two firms -- Portland's Home Dialysis Plus, a medical services firm that raised $50 million, and Medford's Upwind Solutions, a wind energy services firm that raised $29 million. What's refreshing about that is that they represent sought-after industry segments outside Portland's traditional niches in semiconductor engineering and software applications.
It's hard to draw conclusions based on a mere 13 data points, especially when they are so heavily weighted toward two firms, but it's still worth celebrating the fact that 13 teams of Oregon business executives convinced at least as many investing partnerships that they had the potential to grow into profitable, meaningful companies. It certainly beats what we've seen in Oregon over the past two years, when the recession iced the climate for startup companies.
Upwind is a third-party provider of a range of services to owners of wind turbines. It can build and maintain the towers themselves and deal with local regulators to make sure they are in compliance with prevailing rules. It says it can help operate wind turbines so they deliver optimal loads and expenses remain under control. It already boasts a geographically and institutionally diverse list of clients and its progress was encouraging enough that it won its infusion of capital in March from the renowned venture firm of Kleiner Perkins Caulfield & Byers, as well as a follow-on investment by MissionPoint Capital. In the official announcement of the $28.8 million investment, MissionPoint credited Upwind's "very strong balance sheet and ... outstanding team."
In the universe of young companies, a venture capital investment is the ultimate expression of confidence, or at least optimism, in a business's prospects. It follows an arduous due-diligence process, vettings by partners, studies of the business niche and screening of the management team. It's not a process for the timid, especially since it requires embarking on a long-term relationship with a bunch of people who tend to keep asking what you're doing with their money.
There remains a good deal to fret about regarding Oregon's business climate. The capital gains rate and the top-end personal tax rate are among the highest in the nation and companies that seek to expand or develop in Oregon frequently face grueling fights over environmental and land-use issues. The tough campaigns over Measures 66 and 67 have angered business leaders around the state and apparently have helped fuel the campaign for Republican gubernatorial candidate Chris Dudley.
Yet the business landscape is not entirely bleak. Smart teams of entrepreneurs in Oregon are still dreaming up ways to reshape their industries and some of them are attracting money to fuel those dreams. At a time when unemployment remains stubbornly high and other indicators such as the office vacancy rate are lagging, news of an uptick in venture capital is most welcome.
The Oregonian,