Investing from BOVF

Jon Maroney

January 2025

Oregon Venture Fund is excited to announce the launch of the Business Oregon Venture Fund, a new $10 million fund made possible by funding from the State of Oregon and the US Treasury’s SSBCI program. We are honored to be entrusted with this capital and look forward to using it to invest more dollars, in more promising early-stage startups, in Oregon.

Key Features and Guidelines

• Single Investment Limit: BOVF may only invest once in each startup.

• No Investments in Existing Portfolio Companies: BOVF may not invest in companies that are already part of OVF's portfolio.

Investment Strategy

BOVF will invest alongside OVF in eligible Oregon-based startups. Our primary objective for BOVF is to capitalize on early-stage investment opportunities. By allocating BOVF funds to the earliest rounds of financing, we aim to establish a strong ownership and pro-rata position, which can be leveraged for future investments from our core funds.

Eligibility Criteria

To be considered for BOVF funding, a company must meet the following criteria:

• First OVF Investment: BOVF investments will always be a component of an initial OVF investment in a company.

• Pre-Seed or Seed Stage: The company must be in the pre-seed or seed stage of development.

Investment Structure

BOVF investments will always be a part of a larger investment round. The allocation will be consistent across all participating investments: 25% from OVF and 75% from BOVF. This standardized approach ensures fairness and avoids any potential adverse signaling or questions from future investors.

Follow-on Investments

Any follow-on investments in BOVF-funded companies will be made from our core funds, ensuring that OVF maintains its desired ownership stake.

Strategic Considerations

While BOVF offers several advantages, it's important to recognize the trade-offs of this approach:

Pros:

• Extended Runway: BOVF capital will provide local startups more fuel to grow, and more time to try, test, and pivot.

• Reduced Risk to Core Funds: By allocating BOVF funds to early-stage investments, we can mitigate the risk to our core funds in our most risky investments.

• Larger Ownership Positions: BOVF investments can help OVF establish a stronger pro-rata position in subsequent funding rounds.

Cons:

• Limited Upside for Core Funds: Very early-stage investments carry higher risk and potentially higher reward. By sharing an initial investment with BOVF, OVF may be diluting its upside, especially if a startup’s next round is at a significantly higher valuation.

Conclusion

BOVF represents a valuable addition to OVF's investment strategy and an added benefit to Oregon-based startups. By focusing on early-stage companies and leveraging the benefits of BOVF, we can identify and better support promising startups within our region and drive more economic growth and innovation. Our strategy also has a trade-off that may reduce the financial risk, and therefore the financial upside, of an initial investment in return for getting more dollars into early-stage companies and increasing our pro-rata allocation in future rounds.  

If you know of a venture-profile startup with at least one key person in Oregon or Southern Washington, please let me know. We’d love to meet them and see if we can be helpful.