Bend grows entrepreneurs

Study ranks city 16 nationally in high-tech startup density

By Rachael Rees / The Bulletin

Published: September 01. 2013 4:00AM PST

 

Jim Miller, founder and CEO of a tech startup, moved his family and business to Bend:

— before learning Entrepreneur Magazine labeled Bend the next big city for entrepreneurship;

— before he knew about FoundersPad, the startup accelerator program, and

— before discovering Bend is home to a number of investors and venture capitalists.

Miller moved from Seattle to Bend last year for the quality of life, as well as the lower costs of living and running his business, KardioFit, an online wellness rewards program.

“We don’t have the traffic that we had in Seattle, but (we have) all the amenities and beauty,” he said.

Recently, others across the country also have discovered the entrepreneurial hub growing in Bend.

The city ranked 16 out of 384 metropolitan areas in the country for high-tech startup density, the concentration of startups relative to the nation as a whole, in 2010, according to an Aug. 14 report from the Ewing Marion Kauffman Foundation, a Kansas City, Mo., nonprofit dedicated to entrepreneurship.

Corvallis ranked 12th and the Portland metro area came in 23, according to the report.

While Portland has a growing community of software companies and innovators, Bend has also attracted hi-tech entrepreneurs because of the lifestyle, said Ron Adams, executive associate vice president of the Oregon State University Advantage program.

Universities have also increasingly engaged in entrepreneurial activities, he said, developing and attracting talent to the ideas coming out of university research. OSU’s Advantage Program, announced earlier this year, has a business accelerator to identify and develop startup companies and an industry-partnering component to help businesses conduct research and development.

“I think what’s happening in Bend is also a cultural shift,” Adams said, noting a possible Silicon Valley influence. “The value people are placing and the community is placing on entrepreneurship has gone up a lot (and) it appears it has been predominantly over the past 10 years … There’s something in the water.”

 

Bend Venture Conference

 

Bend Business Advocate Carolyn Eagan agreed the city has been working to attract entrepreneurs and cultivate startups since the early 2000s, noting the first Bend Venture Conference occurred in 2004.

“We started a long time ago providing infrastructure and support for these companies,” she said. “And some of our most prominent companies were started by one person with an idea.”

Today, a decade later, she said the entrepreneurial ecosystem is comprised of not only the Bend Venture Conference, but accelerator programs like FoundersPad and organizations such as Economic Development for Central Oregon and the Tech Alliance of Central Oregon.

“From the city’s perspective, we are a town of entrepreneurs,” she said. “Even if you start a little retail shop, you’re an entrepreneur. You’re starting something from nothing.”

Referencing data from 2011, Eagan said 90 percent of the companies in Bend had 19 or fewer employees.

“In Bend you either work for an entrepreneur or you are one,” she said.

The Kauffman Foundation report mirrors Eagan’s perspective, stating entrepreneurship is consistently linked with measures of economic development, such as employment growth. “Research shows that one high-tech job in a region is associated with the creation of more than four additional jobs in the local services economy of the same region in the long run,” the report states.

 

FoundersPad

 

Since FoundersPad, formerly called VentureBox, began in fall 2011, it has graduated 22 business founders,establishing 14 companies and creating 41 jobs that have attracted more than $2.4 million in capital, said Molly Mount, program manager of FoundersPad.

“By focusing on developing a new generation of entrepreneurs, most of whom have ties to the local area, FoundersPad is helping to build companies that will create jobs and spark economic growth in the region for years to come,” Mount said.

The program wrapped up its third session in July, and has plans to offer a fourth in January, she said. Other events, such as Bend’s Startup Weekend, where entrepreneurs launch a company in 54 hours, are also fueling the fire of entrepreneurship, she said.

“All the pistons are working together,” she said. “It’s one good engine with everyone collaborating, nurturing and supporting each other to really build the entrepreneurial ecosystem of Bend.”

Miller, of KardioFit, graduated from the second session of FoundersPad. He said the experience gave him access to successful entrepreneurs and investors which helped him hone his business plan.

In addition, he said there’s a lot of attractive components to locating a business in Bend.

“(Entrepreneurs) can come and cost effectively incubate and develop their businesses,” he said. “Real estate, salaries and all services across the board are cheaper here.”

When comparing the cost to live and do business in Bend versus Seattle, he said, Bend was about 33 percent less expensive, so money goes further in Bend.

In addition, he said, availability of flights from Redmond Airport makes traveling for business easy.

“I go to Seattle once every six weeks to maintain professional relationships and do business,” he said. “But I can be building my business in an area that is beautiful, that offers a great quality of life for raising a family and has access to talented and educated people that we can recruit into our business.”

 

Venture capital

 

Because of the entrepreneurial infrastructure in Bend, Eagan said, companies coming out of local entrepreneurial programs have been catching investors’ eyes.

“We’re starting to see more funding interest in Central Oregon and Bend.” Eagan said. “Lots of those startup companies require private investments. So what we’re seeing is more and more private investors considering companies in Bend because they know the companies in Bend have been well-trained and are ready for money.”

One of those investors is Dino Vendetti, a venture capitalist and co-founder, investor and mentor for FoundersPad.

Vendetti, managing director of Formative Ventures in Menlo Park, Calif., founded Seven Peaks Ventures, a $15 million Bend-based venture capital fund focused on investing in Web and software companies, according to The Bulletin’s archives and a Securities and Exchange Commission document.

“I am investing in Bend because I am finding very high quality entrepreneurs who are building interesting businesses that have the potential to scale,” he wrote in an email.

“Why Bend? Because it has a high density of entrepreneurs (tech or other), it’s launching a new four-year university and because of the close proximity to Silicon Valley.

“Oh, and also because I enjoy living here!”

— Reporter: 541-617-7818,