Startup geek around town

HEY STATE: Invest in Oregon Startups NOW!

Last night over a hundred entrepreneurs crowded into Ned Space to help kick off an effort to develop funding for start-ups in Oregon. The message was clear.  The state should take a small portion of investment dollars and funnel them not into one time projects, but into entrepreneurs that can make a difference.

The brain trust behind the push is Harvey Mathews, Wayne Embree, Josh Friedman and Mark Grimes.  They aim to build a 100 million dollar investment fund that funnels much needed start-up capital into the Oregon communities.

The event started out with Harvey discussing the difficulties that start-ups face obtaining funding in Oregon.  The proposed solution is a fund that helps entrepreneurs make the leap and take their business to the next level.   With all of the talk of the Obama Stimulus Plan it just makes sense that some of the money is directed towards the people that want to create new companies.   The case is simple.  Small businesses employ a hell of a lot of people and could employ a lot more.  It doesn’t take millions of dollars to get a smart entrepreneur down the path to success.   This meeting was all about showing the state of Oregon that there is talent, there are ideas, there are businesses to invest in.

The meeting continued with an open mic night approach allowing entrepreneurs two minutes to discuss what a $250k investment would do for them.  Everyone of the speakers talked about adding jobs here in Oregon.  They averaged 5 new employees per company at an average salary of about $50,000.  (which is typically half salary based upon market rates).  But hey, entrepreneurs are willing to take risk and that’s the beauty of it.    Not only would this infusion of capital help these companies immediately hire out of work Oregonians, it would get them well down the path to building a sustainable company which would have a much wider economic impact in the community.

So you think to yourself, what would be the result of such an investment?  Let’s look at pure numbers.  Let’s say they carve out $30million of the fund to invest in 2009.  That would be roughly 120 start up ideas getting funded at the $250k level.  Based upon the feedback of the entrepreneurs, that would directly put to work 600 local people – immediately.  Now we can put this into perspective.  ODOT is using $234m in stimulus to do transit projects.  They claim it will create 3300 new jobs.  That’s roughly 71k per head.  It’s actually more cost effective to fund start-ups from a pure dollar standpoint, but here is the big difference.  The investment in ODOT projects doesn’t stimulate the economy beyond spending.  When the money runs out, it’s gone.  But with start-ups – there is a big opportunity.  Each of these companies has a chance to create a business that brings much needed tax revenue to the state on an ongoing basis.  If successful, each start-up could expand to employ more and more people over time.

Personally I know that an investment of $250k into the MioWorks.com team would change the dynamics of our business plan.  We would be able to accelerate hiring by at least 6 months and reach profitability much sooner than anticipated.  This would result in employees paying taxes, buying coffees, eating lunch near the office and kick starting out own little part of the economy.

NOTE: If you missed the event yesterday and want your voice heard, go to the Silicon Florist blog and fill out the form.  Hurry up, the info is needed by the team in the next few days.