Introducing 1859 Ventures

Let’s not sugar coat it, it is supremely difficult to raise money in Portland (and more broadly throughout Oregon) if you are a founder who is still looking for that first customer. In fact, the data backs this up. In Oregon, funding for rounds A and later are all up while earlier stage funding (pre-revenue/early seed) are all down substantially. You can read more about this in the 2018 Oregon Capital Scan.

We all know why this is happening. Many funds throughout the region who have typically filled this role have moved downstream and require companies to have a substantial amount of revenue before they will even look at the company seriously. There are a few examples in which companies are getting that pre-revenue funding, but they are scarce and are often a result of close ties to fund managers.

Now to be fair, this is not a problem unique to Portland. In fact, nationwide pre-seed and seed rounds are down across the board. Part of the issue is that many institutions are no longer offering collateralized loans putting more pressure on venture as well as other sources of funding like SBIR programs.

The challenge is that Portland feels this in a much more profound way in part because our community is much smaller. We are a much smaller market compared to our neighbors to the north and south. We have also struggled to show a history of large exits making it even harder for investors to buy into the notion that Portland is a viable place to put money down on early bets.

While this is all true the way we build better founders in our state is to help them at their earliest stages. We need to build in a system that does not leave behind those that are in the early stages of leaving their comfortable and safe day jobs to build something great. We need to collaborate in a way that actually moves the needle for founders.

Some of us do this today by providing programming for founders in a way that connects them to resources. However, without an option in which founders can utilize funding that will help them rapidly scale to compete in the global marketplace, we are asking them to fight with one hand tied behind their backs.

That is why today I am excited to announce the creation of 1859 Ventures. Born out of necessity, this small fund will help fill the gap left by firms who used to help founders at those earliest stages through some sort of funding mechanism.

1859 Ventures is a true seed fund here in the Portland region and will keep terms very simple.

• No Board Seats
• $50,000 to $100,000 checks (in some rare cases larger checks)
• SAFE notes
• Follow on investment availability

The first fund will be $5M and we are currently in the middle of that raise with the hopes of closing by early 2020. We would like to deploy capital as quickly as possible.

1859 Ventures was created to be founder friendly. Too many firms say they have founders in mind, but their actions say something else. I myself have been very vocal about calling out such shenanigans and will make a pledge to adhere to a strict set of guidelines that ensure the fund keeps founders the focus. My objective is to build better founders and have done just that through my role at WeWork Labs.

Having been a founder myself I know how hard it is to not only raise money, but to do so while focusing on the growth of your business. It is exhausting. It is mentally draining. It is frustrating to deal with investors who show interest, but are happy to string founders along. It’s not right and it will never happen with 1859 Ventures.

At the end of the day I want to see our area thrive. I want to see more founders be given the opportunity to take their early ideas and grow them to be the next top companies within the state of Oregon.

Pretty soon the website will be launched along with an application process for startups that would like to be considered for the first fund. The general thesis for this fund will be very broad. While my background is in SaaS and technology, my feeling is that every company needs to have a component of technology if they are to compete on a global scale. That being said, we will be looking at companies from a wide variety of industry sectors.

We also want to ensure we are thinking a lot about underserved/underrepresented founders. As a veteran this is definitely something I think about often and find that most funds talk about diversity as a value, but their portfolios say something else. Again, this is where 1859 Ventures will strive to be better. We know that when you have a diverse set of voices, you have a path for sustained and inclusive growth.

I just want to take a moment to thank those that have encouraged this path and this process. Many people throughout Portland and beyond have really taken a keen interest in seeing this happen and I am absolutely thrilled that it’s finally becoming a reality.

If you have questions, comments, or concerns you can reach me at josh@1859.vc