Reflect, Evaluate, Proceed: Exploring Fund Structures

August 2025

Melissa Freeman

August has arrived. It’s a wonderful time to reflect on the first half of the year, recharge during a vacation or two, and then start to execute plans for our remaining goals before year-end. The investing team at Oregon Venture Fund has been productive this year, making investments in great companies like Hydrolix, Conveyor and Digs. The capital raising team has been sharing the story of Oregon Venture Fund with interested potential investors across the region, including Bend, Eugene, Newberg, Vancouver and Walla Walla.  

Throughout the year, our team regularly debriefs on our practices and discusses ways to improve. How can we serve our founders or our investors more effectively and efficiently? This spring, we explored whether a better fund structure model might exist for our investors. Currently, we raise an annual fund each year and a 5-year fund every five years and both invest in parallel in the same portfolio. This enables accredited investors the option of investing in one annual fund with one capital call for a minimum of $50K. If they choose to invest in a subsequent annual fund, they have the option, but not the obligation to do so. Alternatively, investors have the option every five years to invest in a 5-year fund that enables investors to commit a minimum of $50K per year for five years and receive one K1 instead of five –ie, instead of one for each year. The model has served our investors well, but because we want to be sure, we conducted a research project to identify whether a better fund structure exists for our size and purpose. Our project concluded this summer and it was a worthwhile exercise.

A handful of conversations with attorneys from Portland to New York, and other experts in fund structures, surfaced the idea of using a master-feeder fund, among others. It could enable OVF to attract global sources of capital, improve tax efficiency and achieve some operational streamlining, however the disadvantages heavily outweighed the advantages.

In addition to not caring for the name, “Master-Feeder” fund, the disadvantages included more administrative costs for a fund of our size and scope, tax and regulatory complexity, and a limit on how many accredited investors could participate each year. This type of structure is better suited for Registered Investment Advisors and investors categorized as Qualified Purchasers.

For these reasons, and with counsel’s guidance, we chose to stick with our current annual fund and 5-year fund structure because democratizing venture capital is core to our mission. We believe our model succeeds because it is affordable and accessible to accredited investors. OVF wants to be both investor friendly and founder friendly. We want more people, not just the wealthiest of our community, to have the opportunity to invest in and financially benefit from our region’s top startups. That being said, we still only have a certain number of units for accredited investors each year, but that is double what it would be if we were to switch fund structures.

Heading into September, it feels good knowing we took time to revisit our investment offering and structures and, after 18 years, we’re confident it is still the right way to proceed. For now.

Oregon Venture Fund raises an annual fund each year. The investing window is open each fall, capital is due the first week in January and deployed during the calendar year. The next 5-year fund will start investing in 2028. Please contact Melissa Freeman, Director, Investor Relations if you would like to learn more about Oregon Venture Fund.