Bend-based Cascade Angels has a new strategy that could help startups become more fully formed businesses.
The group closed its fifth fund, a multi-year endeavor, this year at $3 million. The capital is expected to be deployed this year and next year. The investments Cascade Angels made in 2018 came from this fund, said new Cascade partner Robert Pease.
The strategy meshes with the state’s maturing investment ecosystem. This year, the state’s venerable angel group Oregon Angel Fund, which rebranded as Oregon Venture Fund, launched a multiyear fund to, like Cascade, attract more institutional backing. The strategy allows such groups to write bigger checks.
The five-year old Cascade Angels had previously raised annual funds, returning any money that’s not invested to the investors. Its first fund in 2014 totaled $460,000.
As the group becomes an important part of the state’s capital ecosystem, it has attracted more individual and institutional investors who wanted a multiyear fund, said Pease.
As a multiyear fund, the group can offer follow-on investments to successful companies.
“The mission to me was to get it started, to take it from an idea to be a community asset and then scale it to be a durable community institution,” said Cascade co-founder and Managing Partner Julie Harrelson. “I think we are doing that.”
With its fifth fund, Cascade expects to invest between $150,000 and $250,000 into startups, up from the $50,000 minimum it used to invest in such companies. So far this year, it has put $1.1 million into these seven companies:
- Portland software maker Tali
- Portland digital media company Outdoor Project
- Portland blanket maker Rumpl
- Statewide entrepreneurial group StarveUps
- Seattle security software maker Stabilitas
- Vancouver children’s product maker Slumberkins
- Hood River collaboration software maker Talkoot
The group’s targets include enterprise software, cloud-based businesses and tools, consumer products and easier access to such services as health care and financial services.
Cascade typically invests in companies first external funding rounds. Harrelson and Pease described their deal flow as strong, with as many as 15 expected through next year.
“We do not invest in pre-revenue or pre-launch,” said Pease. “We want some degree of (market) traction.”
Institutional investors in Cascade’s Fund V include the Oregon Growth Board, Oregon Community Foundation and Oregon Entrepreneurs Network.
Since 2014, Cascade Angels has invested $4 million across 24 investments, with those companies employing more than 200 people. The group says 25 percent of its companies employ woman CEOs while more than half count women or minority executives on their leadership teams.
Access to capital is often cited as the biggest barrier for Oregon companies. Over the years, Cascade Angels has joined groups including OVF, the Portland Seed Fund, Seven Peaks Ventures, Rogue Venture Partners, TiE Oregon Angels and Elevate Capital to fill this gap in Oregon-based investment funds.
While Portland-based startups comprise about half of the Cascade Angels portfolio, the group targets innovators throughout the Pacific Northwest.
“We see a slightly different deal flow and investor,” she said. “We see more from non-Portland. That has been an interesting development as all the funds differentiate.”
So far this year, venture investors have invested $360 million across 63 deals in the Portland metro area, according to the Seattle research firm PitchBook.