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Oregon startups open for $1.5 million fund

September 11, 2010

Oregon startups to get a jumpstart with financing help from the Oregon Growth Account
–Board approves new $1.5 million investment in the Oregon Angel Fund
State Treasurer Office

TIGARD – The Oregon Growth Account is investing in the state’s promising startup companies.  At its quarterly meeting, held Tuesday in Tigard, the Oregon Growth Account Board endorsed a $1.5 million, one-year commitment to the Oregon Angel Fund, which evaluates and makes early-stage investments in companies with solid business plans.

“Now more than ever, it is important to help bolster the next generation of innovative Oregon companies,” said Treasurer Ted Wheeler, who is the chairman of the Oregon Growth Account Board. “The Oregon Growth Account is creating jobs for the long-term, with the goal of generating returns to support and strengthen schools.”

Since it was created by the 1995 Legislature, the Oregon Growth Account has invested a portion of Oregon Lottery proceeds to earn returns for the benefit of schools, and also to help spur economic development in Oregon.

Those commitments – totaling roughly $93 million to date — are paying off in terms of jobs and also investment returns. In June, Treasurer Wheeler declared earnings of $5 million from the Oregon Growth Account, with the money going directly to help schools.

Investment dollars are directed to companies with the best plans for financial success. The funds are an investment, and are expected to yield positive returns over time.

Investments through the Oregon Growth Account have paid off in new jobs: The aggregate payroll produced by assisted companies equals $30.6 million a year, according to statistics presented to the Board.

The Oregon Growth Account is managed by the Office of the State Treasurer, but the office does not invest directly into individual companies. Rather, applicants who are seeking financing are vetted by professional fund managers who have contracts with the state.

Tuesday’s pledge marks the fourth time that the Oregon Growth Account has invested in the Portland-based Oregon Angel Fund, bringing the total to $5.5 million. In addition, the Oregon Angel Fund’s managers have augmented the state’s contributions with investments from 120 separate individuals. That combined seed capital is helping to finance ventures such as Internet retailer GiftTango and pharmaceutical developer DesignMatrix.

The Oregon Angel Fund makes four or five investments annually in promising startups, with those ranging from $450,000 to $700,000.

“Even in the best of times it can be tough for promising companies to find early stage financing, and so this investment will be incredibly valuable,” said Eric V. Pozzo, fund manager for the Oregon Angel Fund. “When Oregon investments help Oregon companies to make money, good things happen.”

Oregon Growth Account Board members signaled a willingness to commit to subsequent investments in the Oregon Angel Fund, if sufficient capital is available. The Board also discussed several other potential investments Tuesday, but delayed decisions until December at the soonest.

More information about Oregon’s efforts to earn investment returns while also helping in-state businesses grow and prosper can be found on the “Investing in Oregon” page on the website for the Office of the State Treasurer, at www.ost.state.or.us.

The Oregon State Treasury protects public assets and saves Oregonians money through its investment, banking, and debt management functions. The office also promotes public outreach and education to help Oregonians learn strategies to save money, invest for college and make smart financial choices.

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Pooja September 13, 2010

The Oregon Angel Fund walked away with less than it had hoped and a new Portland-based seed fund came away empty handed from the Oregon Growth Account’s quarterly meeting.

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