The Oregon Regional Accelerator and Innovation Network (RAIN) is partnering with Portland entrepreneur and investor Nitin Rai on a new regional seed fund in an effort to close the funding gap for startups around the state.

Rai will oversee what will be a regional early-stage fund. While the fund will likely be larger, between $2 million and $4 million will be focused on companies in RAIN’s geographic area of the south Willamette Valley and mid-coast region.

RAIN is a state-funded organization designed to support startups by gathering resources from government, business and academia. It operates accelerators at the University of Oregon and Oregon State University.

“We’ve known for some time that an early-stage fund would be critical for taking RAIN — and therefore the companies it supports — to the next level,” said RAIN Executive Director Jim Coonan, in a written statement. “We went through an exhaustive process to identify a partnership that would align our needs, and we couldn’t be more pleased to have an accomplished entrepreneur, mentor and investor like Nitin lead this new venture.”

Rai is president and CEO of the software company First Insight and a founding charter member of the entrepreneurial organization TiE Oregon. He serves as president of the TiE board and chair of TiE Angels, the organization’s angel investment group.

A common refrain of the Oregon startup community is the lack of money available within the state. There are several efforts to boost the number of angel investors in the state and already a handful of seed funds. Seed- and early-stage money supplied by angel investors is frequently critical to startups in order to gain market traction, critical for grabbing the attention of venture capital.

The new fund is anticipated to dole out investments between $25,000 and $250,000. Capital for the fund will likely come from private investors, governments and foundations. The group isn’t yet ready to name investors.

“RAIN has already had a lot of success with its programmatic elements, which include the two accelerators and the innovation network, but the third element of the RAIN strategy is to develop a regional pool of capital, which will tie everything together,” Rai said. “This early stage fund also fits in with my plan to create a larger state and northwest region wide fund that will invest in both early and seed stage startups in diverse and under-represented regions and entrepreneurs.”

The fund is still being raised. Rai declined to comment on investors who have already committed.

via A new Oregon-based seed fund to help startups is in the works – Portland Business Journal.