New venture capital fund wants to increase money flow to Eugene-area startups

In January, entrepreneur and investor Nitin Rai launched Elevate Capital, a Portland-based venture capital firm. The firm’s Elevate Capital Fund aims to raise $10 million from investors in the next 12 months. About $1 million of the $10 million will be raised from Willamette Valley investors, with plans to plow most of it back into the Willamette Valley, said Rai, Elevate Capital’s managing director.

On Thursday, Elevate Capital announced that Meyer Memorial Trust had stepped up as lead investor in the venture fund by investing $2 million.

Meyer Memorial was created by the late Fred Meyer, founder of the Northwest retail chain.

Other investors in Elevate Capital include the Oregon Community Foundation, and some individual investors from the angel investment groups TiE Oregon Angels and Willamette Angel Conference.

Investors who put money into small, early stage companies in exchange for an ownership stake are betting that their investment will increase in value as the company grows.

Historically, Eugene-area entrepreneurs had to seek venture financing in more established hubs of Seattle or the Silicon Valley and were pressured to move their operations to be closer to the investors.

By July, Elevate Capital plans to complete its first round, raising $3 million to $4 million, and start investing $100,000 to $500,000 in 12 to 14 high-growth startups in the Northwest, Rai said.

“I’m going to be making some investments in startups in the Eugene-Springfield area — seed capital and larger — so these companies can get the appropriate funding that they need in order to get started and be successful,” he said.

“The idea is to help early stage companies to get $500,000 to $1 million of investment and not have to leave the area to get funding,” Rai said.

The fund could make a big difference to local startups, Eugene entrepreneur Todd Edman said.

“A fund of this size is a big deal,” he said. Ten million dollars targeted to the Pacific Northwest “will signal to startup companies that they don’t have to move outside the Eugene region if they’d like to raise money. It will mean more new and high-growth business here.”

The fund promises not just access to money, but to expertise and mentorship.

“Getting the money into this area is good, but getting connections to people of this caliber, visiting Eugene to talk to investable businesses is invaluable,” Edman said.

Rai, who was chosen seed-fund manager last year by the Regional Accelerator and Innovation Network, seeks to raise at least $1 million from investors in RAIN’s region of Lane, Linn, Benton and Lincoln counties.

Rai said he and Elevate Capital venture associate Eric Boothe, a University of Oregon law student, will be spending time at the RAIN business accelerators in Eugene and at Oregon State University.

“I’ll likely be a mentor,” Rai said. “We’ll be coming to Eugene quite a bit to meet with entrepreneurs and expand our mentoring network in collaboration with the RAIN accelerator and Fertilab,” the local business incubator.

Rai said he’s hoping “with Elevate having a larger checkbook, we can bring more smart money into your ecosystem and also partner with local investors.”

“We will have a really strong group of mentors that will partner with us, including some local mentors from Eugene,” Rai said. “The idea is we collaborate and bring all this intelligence from all over to Eugene startups and help them with our brains, our money and our connections.”

The Elevate Inclusive Fund, a separate fund managed by Rai, will invest $3 million in the next five years in underrepresented entrepreneurs, including women, veterans and minorities.

Portland Development Commission, Multnomah County and the state of Oregon have committed $1.25 million to this fund, which is one of the first public/private funds of its type in the nation, Rai said.

The Elevate Inclusive Fund is intended to serve Portland-area startups, but Eugene-area entrepreneurs might qualify if their companies have a presence, such as a sales office, in Portland .

Rai has more than 28 years of high-tech industry experience. He is CEO of First Insight Corp., a Hillsboro-based software company, which he founded in 1994.

Rai was born in India, earned a degree in computer science in Canada and came to the United States in 1987 to work in Silicon Valley. He has lived in Oregon since 1989.

Rai also is a founder and current president of TiE Oregon, part of what is considered the world’s largest nonprofit entrepreneurial organization.

Rai said he was inspired to create Elevate Capital to try to address funding gaps for startups.

“I realized there needed to be a fund that was intentional about making these investments,” he said.

Funding happens, Rai said, “but it’s mostly been concentrated in Portland and (other) regions have been ignored. There are local angel groups trying to address the issue, but they only meet once a year.”

Rai added, “I’m doing this because I really believe in it. I came here as an immigrant, and this country gave me a lot.”