Study Identifies Gaps in Oregon’s Supply of Capital, Recommends Areas for Action

4/27/2012 Press Release

SALEM – Oregon businesses of all sizes face significant hurdles when it comes to acquiring money for expansion and additional hiring, a report released today shows.

The study, “Oregon Capital Scan: A Developing Ecosystem,” identified so-called “capital gaps” affecting employers across the spectrum of Oregon industries. The four-month analysis was conducted by Niels Zellers of Confluence Capital, LLC, and released jointly by The Oregon Community Foundation, the Oregon State Treasury, Meyer Memorial Trust, Business Oregon and CTC Consulting.

The study was commissioned by The Oregon Community Foundation and Oregon State Treasurer Ted Wheeler to give policymakers and financial leaders a clearer understanding of the state’s business capital landscape. The primary goal is to foster well-informed decisions that will strengthen Oregon's economy.

Capital gaps are defined as a disconnect between the supply of capital and the qualified demand for capital – for example, from promising companies that need capital to grow. Business capital is necessary to generate and sustain economic development.

“Many conversations about economic development in Oregon have assumed that there are gaps in available capital. But until now, there hasn’t been a systematic effort to analyze where these gaps exist,” said Duncan Wyse, Oregon Business Council President.

The study is based on data from more than 90 participants, including angel investors, venture capitalists, bankers, municipal lenders, microlenders, representatives of community development financial institutions, state finance program leaders, investment bankers and managers of economic development district loan funds. Data gathered include assets available to invest and estimated investment in 2012.

The study identified a number of gaps in Oregon’s capital flow, including seed-stage capital transactions of $100K to $500K; growth capital for smaller companies with profits of $500K to $3M; and working capital ($150K+ lines of credit) for small manufacturers. The study also provides broad recommendations on how to address capital issues going forward.

“This study is an important step in a comprehensive approach to increasing economic development opportunities across sectors in Oregon," said Max Williams, OCF President. "Each of the partners involved in funding the study will be carefully analyzing the report’s recommendations to see how and where we might support this effort in the future.”

The full report is available here: Oregon Capital Scan.