Trade-offs to Investing Regionally

April 2025  

Jon Maroney 

Since its founding in 2007, Oregon Venture Fund has limited its investments to startups with a presence in Oregon and Southern Washington. More specifically, our criteria is - at minimum - at least one founder or key leader should have a primary residence in our region. While the majority of the 82 startups we’ve backed are genuinely headquartered in Oregon or Southern Washington, since the pandemic startups are increasingly virtual, with key leaders and employees spread across the country or globe. Some have a primary office, others just have distributed offices, and a few are completely work-from-home or work-from-anywhere, especially at the pre-seed stage. Why would OVF intentionally limit its deal flow by investing only in startups with a key person living in our region?   

We believe the competitive advantages to investing locally include… 

Hands-on portfolio support – Founders appreciate that OVF knows this region well. We know the top technical and entrepreneurial talent, industry leaders who can serve as advisors and door openers, and professional service organizations.  OVF regularly helps portfolio companies find their ideal workspace, recruit leaders & specialized talent, connect with creative agencies, specialized attorneys, CPAs, and lenders, and even form relationships with faculty and researchers at local universities and OHSU. OVF managers and venture partners often lead tailored workshops with portfolio companies on topics ranging from strategic planning to budgeting and scaling.  When startup leaders are local, there’s simply a lot more we can do to help accelerate a startup’s growth and success. 

Access to top founders – Because of our longstanding commitment to this region, we know the top serial entrepreneurs and potential entrepreneurs and the organizations that support and surface them. Our network of hundreds of investors and 180 venture partners serves as a small volunteer army of eyes and ears in the community and has become our largest single source of deal flow. That, combined with our reputation for being well-connected and helpful, ensures OVF has access to the “pick-of-the-litter” in this often overlooked and underserved region. We get to invest in nearly every company we want to. If we were investing in Seattle or the Bay Area, that would not be the case.  

Depth of Diligence – OVF’s reputation for speedy and rigorous diligence stems, in part, from our local focus. We can quickly form an expert group of local, national, and global experts on nearly any market opportunity, technical innovation, and business model to assist our diligence and we can triangulate on a local founding team’s work history and strengths/weaknesses more quickly and accurately because of our extensive local network of trusted, confidential relationships. Our diligence sprints can take as little as a week and our record of false negatives [startups we decline that go on to generate a superior return] and false positives [startups we invest in that don’t generate a superior return] are both very low compared to the venture industry nationally. We believe our regional focus has a great deal to do with that.  

Heightened Accountability – When you invest locally, founders – and their investors – have nowhere to hide. Not only do we get to meet with our portfolio leaders regularly [vs. the industry standard of a quarterly zoom or in-person board meeting], we also run into them serendipitously all the time – on the sidelines of soccer games, at the airport, at community events. With proximity, founders feel a heightened sense of accountability to their local investors, and investors feel highly accountable to add value to their local startups. Everyone’s reputation is on the line.  

Better VC Relationships – Have you ever seen a dog try to eat the kibble from another dog’s dish? It’s not pretty. Because OVF doesn’t invest in Seattle or Bay Area startups, Seattle and Bay Area VCs don’t view OVF as a competitor. Rather, they often turn to OVF as their feet-on-the-street in Oregon and Southern Washington and as a trusted source of potential deal flow. We’re fortunate to enjoy close relationships with over 50 national and global venture firms who have invested with and after us. They assist with our diligence and filling out financing rounds.  

Place-Based Investing – OVF was a pioneer in place-based venture investing, which has since become a national and global trend. Just as citizens like to eat and shop local, investors increasingly want to invest local. While having local institutional and family investors may not directly benefit local entrepreneurs, it benefits OVF with capital raising – local investors appreciate our consistent regional focus and that our portfolio companies are creating local jobs and wealth, along with superior returns.  Just as small cap fund managers would lose investor confidence if they drifted into large cap investments, OVF would lose investor confidence if the clarity of our regional focus were compromised. The top performing venture funds are the best investors in the world at something – often a business model [eg, SaaS or marketplaces], an area of innovation [eg, life science, cybersecurity], or, as in OVF’s case, a geographic region. It’s increasingly hard for a generalist fund to compete with, and win against, more focused competitors.  

That said, as with any strategy, there are trade-offs. While OVF’s regional focus is one of our greatest sources of sustained competitive advantage, it’s also our greatest limitation.  

Investing local means limited deal flow – We see roughly 300 new startups a year with a presence in our region. Funds serving larger regions, and those investing nationwide, can benefit from a deal flow larger by 10X, or more. We want to invest in the cream-of-the-cream-of-the crop – the top 1% of our deal flow, which is consistent with the venture industry nationally. That means we can realistically expect to find just 2-4 new companies annually that meet our narrow investing criteria. The founders we back need to be the best in the world at what they do…and at least one of them must also live here – a high bar to clear. Locally focused investors will always wish there was more local deal flow. Local founders will always wish there were more local investors. And so it will always be.  

While OVF’s regional focus offers significant long-term advantages, it does come with real limitations. We will miss promising investment opportunities outside our region. Self-imposed constraints may sound limiting, but they can also serve as powerful mechanisms for boosting focus, creativity, inspiration, productivity, and problem solving.  

We view our geographic focus as both a challenge and an advantage. At OVF, we remain steadfast in our commitment to investing regionally. We believe our regional focus drives our ability to consistently generate superior returns for our entrepreneurs and investors. By convening and unleashing the talent and capital in our region, we can help build world-class businesses right here. Investing locally. Scaling globally.  

We invite you to join us on this journey to strengthen our regional economy, drive innovation, and make venture returns while doing it. Together, we can create a more prosperous and vibrant future for Oregon and the Pacific Northwest.