I don’t usually repost a lot of pre-published material, but this particular story from Inc. Magazine — 10 Growing Trends in Venture Capital for 2016 — had some real relevancy to our startup community. So I’m sharing away for your consideration and discussion.
A few highlights …
The article reports that the number of incubators and accelerators continues to surge, with an estimated 2,000 of them around the country. In Bend, we’ve seen the rise of the Bend Outdoor Worx accelerator, which has already mentored eight companies since launching in fall 2014. In addition, our increase in co-working spaces, including BendTECH, The Bridge and The Wilds, all of which opened last year, also provides fertile ground for growing startups.
Meanwhile, the article predicts continued competition among investors for seed and early stage investments — smaller cash infusions that can deliver big returns. “Seed and early-stage investments have accounted for the majority of investment gains in every year since 1995, suggesting that despite the deep pockets of late-stage investors, early-stage investments hold their own on an apples-to-apples basis (total gains),” Inc. reports.
In our small and growing startup community, early-stage investment is mostly the game. Sure G5 snagged $76 million last year. But a dozen-plus smaller, younger companies received more than $15 million in investment as well.(Caveat: That last figure is tracked by EDCO. It doesn’t represent the universe of Bend startups and it’s from their fiscal year ending June 30. I can tally another few million raised by Bend startups since then).
These small dollars are important ones that can help companies survive the bumps of their youth and hopefully flourish into mature ventures.The article goes onto to say that the number of smaller funds continues to increase. Yep. We saw a few of our own take hold here.
For instance, Cascade Angels is now on its second fund. It’s invested in eight startups since it’s inception two years ago and five of them are from Bend. Meanwhile the BVC is in full stride, doling out nearly $900,000 to startups last year. Brian Vierra, conference organizer and EDCO venture catalyst, is vowing to make it even bigger and better in 2016. And Seven Peaks continues to invest in Oregon and beyond. Stay tuned for more news on them shortly.
Keeping on this early-stage train, the article also reports that access to angel or seed capital is “professionalizing” and will continue to do so in 2016, especially with crowdfunding as an increasingly viable option. Again, we’ve very recently seen startups in Bend — take Niki Singlaub of Hydaway — raise in excess of six figures in seed funds on Kickstarter. Oregon’s new equity crowdfunding program promises to adds a whole new element as more startups are able to tap into a new early-stage funding source.
Finally, the article revealed that the number of female founders has increased (women now account for 1 in 5 startup founders) and that women founders basically bring their A game. The author notes that First Round, a top performing early stage venture partnership, released the results of ten years of investing in 600 early stage founders. “The number one takeaway was that female founders outperform male-only teams financially by 63%,” the story reports.
Now, to be honest, I’m not sure we’re on trend here. I don’t have an exact figure of Bend women startup founders and I don’t know whether they account for 20% of our startups. Shoot I’d like them to account for at least 50%, because you know — half the population. What I can say: We have some kick-ass women taking big risks to start companies (shout out to Handsell, Prestobox, FoodFu, Gobi Gear, Airfit and Radventure to name a few). I’m excited to see what 2016 brings in this arena — and hoping we see even more women founders as our community grows.
So what’s it all mean? Infer what you will. My takeaway is that we look like a little microcosm of the great big startup world. And that’s a good thing. Sure, we’ve still got work to do. But (warning: unyielding optimism ahead) a lot of what’s happening here is trending in the right direction.
You can reach Kelly by email at [email protected].