Funding Bioscience in Oregon
By Linda Barney, Barney and Associates
The final session of the OBA Conference discussed biotechnology funding and ways the industry can collaborate to increase funding opportunities. Panelists and their areas of expertise included:
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SBIR/STTR grant opportunities : Alison Craig, policy liaison, Cong. Kurt Schrader of Oregon’s 5th District
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Oregon Growth Account update: Les Fahey, OGA board member
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Venture Funding in 2010: Michael Tippie, Milk Street Ventures
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HB 3644 Economic Gardening: Rep. Jefferson Smith, Oregon’s 47th District
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WINGS – a nonprofit angel network for seed and early stage medical technology companies: Chris Rivera, president, Washington Bioscience and Biotechnology Association
SBIR and STTR grants
Alison Craig described the Small Business Innovation Research (
SBIR) and Small Business Technology Transfer
(
STTR)
grant programs (under NIH) which are designed for small business investment and small business technology transfer. The goal is to provide funding for research and development to help turn ideas into viable companies. The goals are the same for STTR program, which requires collaboration between small business and a research institution. “Grant applications are due three times a year. Our Congressional office is here to help provide a Letter of Support to NIH or aid in other ways. Feel free to contact us,” stated Craig.
Our Congressional office is here to help provide a Letter of Support to NIH or aid in other ways.
The Oregon Growth Account
Les Fahey presented information on the
Oregon Growth Account (OGA). The search for more investment capital to help encourage Oregon start-ups led the Legislature to create the Oregon Growth Account (OGA) in 1995. The OGA is a unique fund in Oregon, and is specifically designed to inject seed capital to launch and expand young Oregon companies.
The funds come from the Oregon Lottery, which, among other goals, finances economic development. Returns from investments in the OGA help fund education. The OGA is overseen by a
public board
and State Treasurer Ted Wheeler is the chairman. The Office of the State Treasurer maintains the
policies
for the fund.
The OGA is a unique fund in Oregon, and is specifically designed to inject seed capital to launch and expand young Oregon companies.
The Oregon Growth Account has committed over $92 million since inception. Investments through the fund have paid off in new jobs. The aggregate payroll produced by companies aided by the Oregon Growth Account equals $83 million a year.
The funds in the OGA are managed by external managers, who vet applicants and decide which of them have the best ideas and best chances for success. Also, in recognition of the need to develop early-stage investments devoted to Oregon, the OGA has a requirement to invest its money in Oregon and a preference for Oregon-based managers.
The Oregon Growth Account does not invest directly in companies. Investments are made at the sole discretion of the external managers. Entrepreneurs are invited to contact any of those
general partners
and submit business proposals. Fahey states, “If your company is trying to raise money, go to OGA website, where you can see a list of potential fund partners and find the funds amounts. The ones who have received money in recent years are required to invest in Oregon funds.”
Venture capital funding in 2010
Michael Tippie from
Milk Street Ventures
stated, “Our fund specializes in medical life science companies— it must save lives or we are not interested.” At Milk Street, the primary investment focus is on transactions with venture capital and private equity funds as they seek liquidity for a portion or all of their portfolios. According to Tippie, between 2001 and 2007, there were a number of venture capital funds raised in boom years that are now closing down or doing funding exits.
Michael Tippie from Milk Street Ventures stated, “Our fund specializes in medical life science companies— it must save lives or we are not interested."
When asked the best way for Oregon companies or researchers to obtain funding, Tippie responded, “Oregon companies must be willing to travel out of state to find venture capital funding because biomedical investors are very specific investors and it is harder to raise capital for something like genomic models versus technology.” Tippie encourages companies and researchers to look for local seed capital funding from angel investors that are within an hours drive so that there can be active involvement and cooperation with the team. Tippie also advised, “In bioscience, you must look at ways to make a company very efficient. You must be realistic about how much money you can raise.”
The Oregon Economic Gardening Bill
Oregon State Representative Jefferson Smith, District 47 (Portland),
s
ponsored the
Economic Gardening Bill
designed to provide funding for businesses in the state. Smith described the business environment where states spend large amounts of funds trying to attract new Fortune 500 companies to their state. In 1980, Oregon had 10 Fortune 500 companies; now there only 2.
Research has found that stage-two businesses actually create more jobs and are growth drivers in a state. Stage-two businesses are small- or medium-sized businesses–often employing from 20 to100 employees–which fits the profile of most companies in Oregon. Smith describes “economic gardening,” as the process of investing in local businesses instead of working to attract outside companies to the area. Smith states, “We need to pay more attention to germinating businesses already here. In other words, in addition to economic hunting, we need economic gardening."
"Economic gardening” is the process of investing in local businesses instead of working to attract outside companies to the area.
Washington Biotechnology and Biomedical Association and WINGS
WBBA President Chris Rivera described the work of the
Washington Biotechnology and Biomedical Association (WBBA)
in helping companies and researchers gain access to funding in the State of Washington. WBBA staff and those supportive of research, development and commercialization of life science technologies met to determine how to provide more funding. Biomedical and biotechnology companies in Washington needed help with funding, staffing and training. The group realized that there were 50 or 60 high-worth medical people who could be potential angels.
This group formed
WINGS
—The Washington Medical Technology Angel Network—which is a non-profit angel network that facilitates seed and early stage investments for medical technology companies in Washington State. The Washington Medical Device Angel Network is active in four areas: innovation, access to capital (WINGS), talent (recruitment and retraining), and policy. The Wings organization helps screen business plans for medical device companies, helps connect entrepreneurs with investors, and provides mentorship. The group holds investing events during the year and invites entrepreneurs to give their best pitch. Rivera reports that 28 companies have applied and 3 companies were funded through the WINGS program.
The Washington Medical Technology Angel Network is a non-profit angel network that facilitates seed and early stage investments for medical technology companies in Washington State.
What can we do to improve education and funding in Oregon?
In the question and answer session, the group discussed what can be done to improve bioscience funding and education in Oregon. A consensus of the group was that Oregon is competing globally and not just with other states in the U.S. All panelists agreed that funding for education must improve in Oregon and that we need to attract more students in K-12 into math and science. Craig stated,”Congress is looking at trying to pass an infusion of money into states to close the short-fall so that cuts don’t need to be made to the education system. Congress needs to hear from businesses to let them know the importance of education funding.
Also, make sure your opinion is heard on the SBIR program.”
Congress needs to hear from businesses to let them know the importance of education funding.
Representative Smith stated, “Some research says kids lose ground in their educational knowledge during the summer; let’s look for help in developing summer programs.” An audience member had a great idea stating, “Many of us have labs and kids love to blow things up. Let’s invite the kids into our labs with some activities that are interesting and will spark their interest in science and math.”
Panelists encouraged the audience to use the existing programs described during the conference to gain access to services and funding sources. They also indicated that the OBA, companies and university researchers should work with the state government to come up with ways to improve funding. The fact that bioscience jobs are high-wage jobs can be used as an argument. Fahey stated, “A major source of capital is angel funding – how do we retain more wealth in Oregon? The Oregon Growth Account is a good start.”
Rivera stated, “I encourage Oregon to do what our group in Washington did which is to look at your bioscience and biotechnology areas and determine your strengths. Take an inventory of areas where you are
strong, such as medical devices, and then look at ways to provide support and funding in Oregon.”
Take an inventory of areas where you are strong, such as medical devices, and then look at ways to provide support and funding in Oregon.
Linda Barney
is the founder and owner of
Barney and Associates, a technical / marketing writing, training and web design firm in Beaverton, Oregon that provides writing and web content for the high tech, government, biotechnology, medical, sustainability and scientific communities. Linda writes articles for the Software Association of Oregon, the Oregon Bioscience Association, the Clean Technology Alliance, and the Supercomputing Conference. Contact Linda at
linda@barneyassoc.com.