Portland investment firm Rogue Venture Partners is launching a new startup fund with Oregon State University.
Rogue has already raised $4 million for the current fund and hopes to raise between $10 million and $20 million by the end of that, according to Tom Sperry, the firm’s managing director. He said Oregon State has committed to fund a fifth of that, between $2 million and $4 million.
Venture investment in Oregon is on a prolonged upswing, rising steadily over the past few years. But little of that money comes from within the state — and many of the proceeds from successful deals leave Oregon. Regional investors hope to capture a greater share of the state’s technology renaissance and provide on-the-ground counsel to the companies they back.
Rogue’s new fund is the latest source of homegrown Oregon investment capital in a state that had been starved for it. A new firm, Elevate Capital, hopes to raise a $10 million fund, the Oregon Angel Fund has upped its annual investment pool to by 25 percent to $10 million, and the family of former Viewpoint Construction Software chief executive Jay Haladay has a new fund called 10 Branch to invest in local startups.
Oregon State’s contribution to Rogue’s new fund comes from the university’s foundation, alumni and other investors, according to Brian Wall, OSU’s assistant vice president for research, commercialization and industry. He said faculty and alumni have been pushing for more avenues to build companies based on technology at the university.
The arrangement doesn’t require Rogue to invest in any companies that emerge from the university, though the firm will work with OSU to scout for investment prospects and Rogue partner Adam Stoll will keep an office at the university two days a week to learn about OSU technology and advise faculty and students on their business prospects.
Rogue’s existing portfolio includes an array of technology and life sciences startups, including Athletepath, ID Experts, DiabetOmics, Chirpify, Indice Semiconductor and Vadio. Sperry said the company will continue to focus focus on software and life sciences companies, and is moving its offices from the Pearl District to the South Waterfront, close to Oregon Health & Science University.
Investors in Rogue’s new fund include the Zidell family, which owns 33 undeveloped acres on the South Waterfront.
While Oregon universities have long been a source of young companies, the university system has had an uneven track record of commercializing technologies developed by its students and faculty.
Corvallis nuclear energy company NuScale, for example, grew out of OSU but then relied on investment from a Connecticut firm federal regulators concluded was actually a “massive Ponzi scheme.” NuScale survived by selling its business to a big Texas energy services company called Fluor Corp.
There are “always lessons to be learned” from past experience, Wall said, and difficult decisions to be made when deciding how to fund a business.
Whether or not an individual idea wins funding through the new fund, Wall said having Rogue on site will help students and faculty understand the commercial prospects of their ideas – and adjust, when need be, to make a technology more attractive to investors.
The goal isn’t just to get Oregon State ideas funded, he said. It’s to demonstrate that the university is committed to finding applications for its research.
“Success for me would be retention and attraction of the best students and faculty we can,” Wall said.