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Thanks for the call out to discussion, Randy. My take on your observations are, 1) that there’s certainly some truth to what you’re saying — the Portland capital market is still relatively immature, 2) all of the bad behaviors you mentioned happen in other markets as well, with relatively similar frequency, and 3) Portland’s not perfect, and I’m truly sad to hear that you had an experience that led you to base your company somewhere else, but I think you may be overstating the challenges that Portland is facing.

I’ve personally experienced plenty of both Portland and Bay Area angels who are happy to treat “Deal flow as entertainment”; and “pay-to-play” funding models are everywhere (I’m also not personally a fan of those, BTW). The (painfully) “slow no” has happened to me (and everyone else I’m aware of) in the Bay Area just as it happens in Portland, even when, in hindsight, there was a clear lack of fit from very early on. And far too many ‘less than beneficial’ early stage investors from anywhere are happy to take (or sometimes even try and demand) a board seat — even to the detriment of the company. In my experience, that’s one of the more frustrating parts of what fundraising looks like. You’re trying to sell a part of your business to someone who is often functionally a well-heeled stranger. Given that dynamic, sometimes the early interactions are going to include bad investor behavior. As you said, that’s part of the burden of being an entrepreneur. Our job is to (as efficiently as possible) sort out the value from the rubbish.

Despite Portland’s imperfections, I’d actually say that there is some overlooked and relatively unique value in the fact that the Portland capital market is still relatively tight-knit. The only investor that I feel has ever treated us dishonestly in their interactions wasn’t from the Portland market. Portland is too tight knit of a community for truly bad behavior to go unpunished. While there is going to be some degree of “standard” bad investor behavior anywhere, snakes have a much harder time surviving here in Portland for any kind of extended period of time. Your reputation will precede you, and your deal flow will dry up pretty quickly. That also means that while our local capital scene certainly needs to continue to grow and mature, many of the people here have a very genuine interest not only in the growth of the companies that the invest in, but in the Portland startup ecosystem as a whole.

Also, the idea that only one type of company gets funded in Portland or that you can’t get a clean security, a decent valuation, or that you just can’t raise money in Portland simply isn’t true. certainly isn’t a back-end-tech infrastructure company and we’ve raised $3.5M (with about 80% of it coming from Oregon investors) on a very strong valuation, and under very reasonable control terms. We’ve had solid experiences with a number of investors and investor groups, and have a great board with investor representation that brings a very good balance of industry-specific experience and solid, insightful Venture experience. Undoubtedly, we’ve been particularly fortunate, but it’s clearly more than just possible. In fact, Oregon led the nation in startup capital growth, up more than 650% year over year

In my opinion, the real capital challenge that Portland is facing is that we’ve now got a decent (certainly not perfect, but certainly above average) early stage investment scene, but no substantive Oregon-based Series B options. Native Angel and Seed investor groups here in Oregon are trying to move up-market, but don’t yet have the sophistication, structure, or fund size that are really needed to lead that next tier of investment. Anything bigger than about $3–4M is going to require participation from outside the state, and even that size is more likely to be the exception, not the rule.

There will always be missed opportunities (ask any VC with more than a few years of experience and they’ll be happy to bemoan “the one(s) that got away”), but if someone isn’t able to raise a $1–2M round here in Portland, there’s at least a reasonable chance that their idea or their execution aren’t ready or right to be raising that kind of capital. And while it’s certainly true that Portland’s capital market isn’t perfect, I think that a balanced awareness of both what’s going well and what could be improved would be more accurate and productive.