Friday is the inaugural Business 20/20 Executive Breakfast, and if you haven’t registered yet, you don’t want to miss it. Over the past few weeks, panelists have explored the topic Access to Capital in Cascade Business News. Portland keynote speaker Kanth Gopalpur will be providing an excellent lecture on this topic at the event, Friday, Sept. 9 at the Tower Theatre.
Now, Jim Coonan, venture catalyst manager for the Economic Development of Central Oregon, and Jeff Anspach, CEO of the Confederated Tribes of Warm Springs’ Economic Development Corporation, return to weigh in on the question: How does one encourage investment in a “flyover” state?
Jim: Oregon is sometimes considered a “flyover state” because Seattle and the Bay Area are where most of venture capital is. There’s a lot of talk about how to attract more venture capital, but there’s also a counter argument. In my opinion, Oregon doesn’t need that much big venture capital, because many of the companies that angels invest in are not necessarily looking for an exit to venture capitalist, they’re looking to exit to strategic buyers. Certain ideas require a lot of capital—and then venture capital is the way to go—but lots of start-ups need less than 5 million dollars. So the question really is, how to encourage angel activity and seed venture capital. Additionally, these early-stage financing opportunities can provide contacts to the broader venture capital community if a company needs to go that direction.
Jeff: I see this as more of an infrastructure issue; such as a critical mass of industries, talent base, education, access to markets and geographic relevancy all play into the attractiveness of an area. Investors do not like to put all their eggs in one basket. If an area has one strength, this can sometimes correct other weaknesses. For instance, if there’s a concentration of tech companies in an area, but there’s not a deep talent base, usually the existence of a tech hub can recruit a decent talent base.
In Bend, talent base is an issue. You can have a great idea here, but because you don’t have a deep talent pool to pick from, one person can leave and you can have a difficult time replacing them. We have talent, but it’s up at the management level—I don’t see a whole lot of worker bees. This demographic forces businesses to import their workforce. But this problem isn’t just unique to Bend, it’s an issue facing most rural towns.
The good news is that there is money looking for a home. If Central Oregon builds a solid foundation, investors will be more likely to invest in businesses located in the area.
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