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STATE OF ENTREPRENEURSHIP IN PORTLAND, OREGON April 30, 2011 Jon Down, PhD Peter Rachor University of Portland Joe

Cortright Impresa, Inc. Rob Wiltbank, PhD Willamette University

Contents
Executive Summary ................................................................................................................................. 2 Importance and Impact of Entrepreneurship ........................................................................................... 4 Comparison with Top 51 Metro Areas ..................................................................................................... 8 In-Depth City Comparisons ................................................................................................................ 11 PDX Entrepreneurship ........................................................................................................................... 16 Interviews.......................................................................................................................................... 16 Surveys .............................................................................................................................................. 16 Capital ............................................................................................................................................... 33 S.W.O.T. Summary................................................................................................................................. 38 Index of Entrepreneurship Indicators ..................................................................................................... 42 Conclusion............................................................................................................................................. 44 Appendices............................................................................................................................................ 45 Appendix A: Interview protocol ........................................................................................................ 45 Appendix B: Survey Text Responses .................................................................................................. 46 Appendix C: List of Study Contributors .............................................................................................. 69 Appendix D: Resource List ................................................................................................................. 70 Endnotes ............................................................................................................................................... 77

State of Entrepreneurship In Portland April 30, 2011

Executive Summary
The State of Entrepreneurship in Portland, Oregon addresses why entrepreneurship matters to Portland, how Portland is doing in generating entrepreneurship and what might be done to stimulate additional entrepreneurial activity. The study involved gathering baseline information through employment and firm economic data, interviews, and surveys in order to assess the current state of the entrepreneurial climate in Portland. This was then compared to other key metropolitan areas. Based on this analysis recommendations were developed on how the Portland Development Commission, the City of Portland and partners might assist entrepreneurs and support the growth of these firms. For the purpose of this study entrepreneurship is defined to include starting and growing high potential businesses that may be likely to take advantage of outside funding, as well as established small businesses that are innovative and growth-oriented. As a result of this study we conclude: Entrepreneurship is important to the economic health of Portland Portland is an entrepreneurial city and is recognized as such by a large majority of the people interviewed and surveyed In comparison with other similar cities, Portland receives a reasonable amount of venture capital, however venture capital backed firms in Portland over the past 15 years have had only a modest impact on employment There is a significant disconnect between angel investors and venture capitalists who generally believe there is adequate capital to fund investor ready Portland based start-ups and growth companies while many entrepreneurs starting companies believe there is a lack of investment capital in Portland, this is especially true of first time entrepreneurs Significant understanding gaps also exist in areas of tax burden and availability of human resources, with many believing Portland is at a disadvantage in comparison with other areas which we find not to be the case

In order to stimulate entrepreneurship we recommend the following: Leverage the work of existing organizations such as Oregon Entrepreneurs Network, Software Association of Oregon, Oregon Bioscience Association, etc. by supporting their efforts to educate entrepreneurs on business and funding success 2. Create opportunities to motivate, educate and engage the creative, young talent in Portland around entrepreneurship. Highlighting entrepreneurial success stories was mentioned frequently in the surveys and interviews as a means to accomplish this. 3. Strategically support those firms with the capability and desire to grow their revenue in traded sectors markets. While it is difficult to identify the firms that will grow into large companies
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State of Entrepreneurship In Portland April 30, 2011

4.

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while they are still young, by working with organizations such as OEN promising firms can be identified and supported. Work to use the resources of the City to leverage relationships outside the state to bring in buyers to meet with leaders of entrepreneurial traded sector businesses and venture capital investment from outside the state to complement and leverage the venture capital within the state Improve access to working capital for growth oriented small businesses and continue with programs like the Portland Seed Fund that leverage City resources with the private sector. Also encourage the formation of additional angel investor groups and education programs to increase the pool of active angel investors Continue to promote and cultivate a culture within the PDC and City government that is recognized as a supportive partner to the entrepreneurial community. A tangible way to do this is to continuously work on streamlining the process of starting a business in the City and learning about resources Support a tracking and reporting system for the entrepreneurship indicators scorecard of Portland entrepreneurial activity Use the Citys real estate expertise and tools to develop excellent physical spaces for entrepreneurial companies to be born and to grow.

Thousands of small to large cities around the world are working on how to enhance their economies and to achieve greater entrepreneurial success for their region. This can best be achieved by continuing to develop Portland as a great place to live, work and learn; by using resources to leverage the existing organizations already devoted to improving entrepreneurship, and by being entrepreneurial in trying new initiatives such as the Portland Seed Fund.

State of Entrepreneurship In Portland April 30, 2011

Importance and Impact of Entrepreneurship


In examining Entrepreneurship in Portland and elsewhere, it is important to first consider the process, ingredients and evolution of new firm creation. Further, it is important to understand the significant variation in intention, aspiration, success and outcome of entrepreneurial firms including starts ups, small and medium enterprises and emerging growth companies. As part of the background and context for this study we reviewed and benchmarked against a large body of research, empirical data and experiences for the U.S. as a whole, as well as specific cities and regions. In this work, we focused on assessing what constitutes high value entrepreneurship, the contribution of such firms to economic activity, as well as what can be done to identify, stimulate and nurture these firms in Portland. Entrepreneurship drives job growth. The formation of new firms is a major source of job growth. Nationally the establishment of new firms generates between 3 and 3.5 million jobs each year. i Small firms of 500 or fewer employees accounted for 65 percent (or 9.8 million) of the 15 million net new jobs created in the U.S. between 1993 and 2009. And as the national economy had a net loss of 8.7 million jobs during the recession from late 2007 through early 2010, entrepreneurship will play an important role in replacing these lost jobs. It is important to note, that although statistics and studies are frequently cited with the message that entrepreneurship creates most new jobs in the US, this is actually a gross generalization of the underlying information. In fact, a relative handful of entrepreneurs create the vast majority of new jobs and new wealth in any economy. And, these are not necessarily the companies many people first imagine will represent the greatest impact. Neither are they typically predictable at the outset. There is periodic and vigorous debate as to whether the firms with the greatest potential to create the most jobs are firms that are young companies, small firms or those financed in a particular way, such as with venture capital. A comprehensive study done for the Small Business Administration examined high-impact firms defined as firms with not only significant revenue growth (gazelles) but also employment growth. The study looked at firms over three different time periods and found that only 3 percent of all firms were high-impact yet they accounted for nearly all private sector employment and revenue growth in the economy. Over 90 percent of the high-impact firms had fewer than 20 employees and the average age of all the high-impact firms was 25 years.ii In a similar study Dane Stangler looked at the impact on employment of high revenue growth gazelles using the Business Dynamics Statistics database.iii This study reports that approximately 40 percent of new jobs in any given year come from 1 percent of all firms and that the large majority of these firms have between 20 and 249 employees. This study also found that more than 60 percent of the top 5 percent of firms based on revenue growth are from 1 to 5 years old. Start-up companies usually fail. Fewer than half of all companies started survive for five years or more. And many of the surviving firms are marginally successful. Figure 1below shows survival rates for startup companiesiv 4

State of Entrepreneurship In Portland April 30, 2011

FIGURE 1, Survival Rates of Companies Founded in 1992

Creation of a portfolio of high-growth firms. Given that many start ups fail or remain small, in order to achieve significant economic results two factors are critical. An environment should be created that one; leads to the start-up of a large number of new companies and two; supports the rapid development of these small new firms to grow into large companies with significant employment. In other words, the two keys to high economic value are to generate a high birth rate and improve the percentage of firms that avoid death and grow rapidly. Figure 2 below illustrates this concept.

State of Entrepreneurship In Portland April 30, 2011

FIGURE 2, The Accumulation of High-Growth Firms

Entrepreneurship can be the source of game-changing developments that take the economy in a new direction. Economists are loathe to attribute progress to the actions of individuals, rather than to the effects of seemingly impersonal economic forces, but it is clearly the case that the actions of some individuals make a huge difference in economic development. The origin of the regions two signature industry clustershigh technology/semiconductors and athletic and outdoor gear, cannot be told without reference to the entrepreneurs that created the foundation firms in each industry. Our work validates that without the entrepreneurship of Howard Vollum and Jack Murdock there would have been no Tektronix, and therefore, almost certainly no Silicon Forest.v And had Phil Knight and Bill Bowerman not founded Nike in Oregon, there would be no outdoor and apparel cluster. Similar stories could be told in other metropolitan areas.vi In Seattle, the entrepreneurial vision of Bill Gates and Paul Allen (Microsoft), Jeff Bezos (Amazon), and Howard Schultz (Starbucks), was essential to the emergence of these transformative companies, which were not instantly identified as outliers at their outset. In fact, these firms have all seen turbulent times through their evolution, including predictions from time to time of their demise or irrelevance. This kind of entrepreneurship is a once or twice in a generation event. In economic terms, it has a low probability and there is a highly skewed distribution of returns. Most entrepreneurship will have only a small or transitory impact on the regional economy. But occasionallyrarely and unpredictablya new firm will tap or create a much larger market and trigger the creation of a new industry cluster and transform the regional economy. In a sense, this kind of entrepreneurship is like buying lottery tickets: one might play the lottery regularly for a lifetime, and not hit the big jackpot. This very asymmetric 6

State of Entrepreneurship In Portland April 30, 2011

distribution of economic returns from entrepreneurshipa few extraordinary firms produce major impactssuggests that policy cannot rely on the expectation of regular, predictable or outsized gains from promoting entrepreneurship. But, a region that fails to promote entrepreneurship forecloses a major source of economic dynamism. Entrepreneurship is the principal source of Fortune 500 Headquarters. Much is frequently made of the fact that Portland has very few Fortune 500 headquartered companies. The Portland areas two Fortune 500 firms, Nike and Precision Castparts, were both founded here. Thats not unusual: it is overwhelmingly the case that the headquarters locations of Fortune 500 firms are in the communities in which they were founded. The way other communities have gained new Fortune 500 firms is to have had successful local entrepreneurs. An analysis of data on the origins of Fortune 500 company headquarters illustrates this process.vii In Seattle, the growth in Fortune 500 headquarters over the past several decades has come entirely as a result of local entrepreneurship. Of these, only Nordstrom was around before 1975: Seattle Area Fortune 500 Company Headquarters Company, Location (Fortune 500 Rank) Costco , Issaquah (29) Microsoft , Redmond (44) Amazon, Seattle (171) Starbucks, Seattle (277) Nordstrom , Seattle (299) The same is true of the San Francisco Bay Area, where nearly all of the increase in the number of locally headquartered Fortune 500 firms in the past several decades has come from entrepreneurial businesses founded in the region: San Francisco Bay Area Fortune 500 Company Headquarters Company, Location (Fortune 500 Rank) Wells Fargo, (19) Intel Corporation, (62) Cisco Systems, San Jose (71) Apple, Cupertino (103) Oracle, Redwood City (137) Google, Mountain View (150) Gap, San Francisco (162) Sun Microsystems, Santa Clara (184) Applied Materials, Santa Clara (270) eBay, San Jose (326) Yahoo, Sunnyvale (353) Advanced Micro Devices, Sunnyvale (406) Symantec, Cupertino (461)

State of Entrepreneurship In Portland April 30, 2011

Only Wells Fargo existed before 1968. And, Levi Strauss, which would have easily been on the list at that time, has now dropped below the top 500, as new firms in new industries made their mark. Entrepreneurship is critical to the growth of clusters. Our region has increasingly come to recognize the central role that industry clusters play in economic development groups of related firms that sell into distinct markets, and utilize similar skills and technologies. Traded sector clusters represent industries in which member firms sell their goods or services into markets for which national or international competition exists. Portlands economy is driven by a series of these clusters including; clean technology; advanced manufacturing; athletic and outdoor gear; software; and others. And the growth of each of these clusters has been characterized by widespread entrepreneurship. Two recent analyses of the genealogy of leading clusters show the critical role of entrepreneurship in contributing to cluster growth. The Silicon Forest Universe diagram developed by Heike Mayer illustrates the hundreds of firms that populate the regions high technology industry. The majority of these firms were started by local entrepreneurs.viii More recently, the Portland Development Commission retained Meyer to generate a similar analysis of the athletic and outdoor industry cluster. That diagram shows an explosion of entrepreneurial activity, particularly in the last decade, has helped fuel the growth of this cluster.ix Entrepreneurship is an important source of economic opportunity for immigrants and minorities. Of the 27.1 million nonfarm businesses in 2007, women owned 7.8 million businesses, which generated $1.2 trillion in revenues, employed 7.6 million workers, and paid $218 billion in payroll. Another 4.6 million firms were 50 percent woman owned. Minorities owned 5.8 million firms, which generated $1 trillion in revenues and employed 5.9 million people. Hispanic Americans owned 8.3 percent of all U.S. businesses; African Americans, 7.1 percent; Asian Americans, 5.7 percent; American Indians and Alaska Natives, 0.9 percent; and Native Hawaiian or other Pacific Islanders, 0.1 percent. Veterans owned 2.4 million businesses in 2007, generating $1.2 trillion in receipts; another 1.2 million firms were 50 percent veteran owned. About 7 percent of veteran business owners had service-connected disabilities in 2002. In 2008, the overall rate of self-employment (unincorporated and incorporated) was 9.8 percent, and the rate was 7.1 percent for women, 7.2 percent for Hispanic Americans, 4.7 percent for African Americans, 9.7 percent for Asian Americans and Native Americans, and 13.6 percent for veterans.x Entrepreneurship is an important part of the American dream, and is a key avenue for immigrants and minorities to participate in the U. S. economy. Based on Census data, we estimate that there are more than 20,000 foreign-born, self-employed persons in the Portland metropolitan area.xi

Comparison with Top 51 Metro Areas


As a first step in assessing the degree to which Portland is an entrepreneurial city and region we develop an appropriate set of indicators that allow for a comparison with other regions. Using these indicators we provide a description of how Portland compares to other major urban areas across the country.

State of Entrepreneurship In Portland April 30, 2011

Average Firm Size This is a measure of the average number of employees per establishment. Data source is the County Business Patterns, 2007. Small Firms per 1,000 Population Edward Glaeser studied employment growth in major cities from 1977 to 2000 and found that in general, those cities with an abundance of small firms in 1977 had higher employment growth rates throughout the time of the study.xii Data source is the County Business Patterns, 2007. Non-Employer Firms per 1,000 Population Firms without payroll per 1,000 population. Data source is Census Non-Employer Series, 2007. Percent Self-Employed Measurers the number of self-employed workers divided by all workers. Data sources if the American Community Survey, 2006-2008. College Attainment Percent of adult population, 25 and older, who have completed at least a fouryear college degree, 2008. Creative Class Percent of adult workers, 25 and older, who are in one of Richard Floridas creative profession occupations, 2008. Venture Capital Dollars per Capita This data comes from PWC MoneyTree, 2008. Data for each of these indicators for the 51 MSAs with more than a million in population is shown in Table 1 below. With a population of 2.2 million in the MSA area, Portland ranks 23rd among the 51 MSAs with more than a million people. The Portland MSA includes Multnomah, Clackamas, Washington, Yamhill, and Columbia counties in Oregon as well as Clark and Skamania counties in Washington, Portland As the data show, Portland has a relatively large number of small firms with a high percentage of the working population self-employed. Portland also has a relatively well educated adult population (even though it has recently been widely reported that Oregon has a low rate of enrollment into college by 18 year olds). While everyone hopes for the kind of successful entrepreneurship that ultimately generates a Fortune 500 company like Nike, entrepreneurship at all levels is an important and ongoing source of employment and income for a significant fraction of the our regions residents. Based on our teams tabulation of data collected by the Census Bureau, there were more than 130,000 self-employed people in the region. These sole proprietors annually generate more than $7 billion in income for households in the regionxiii. And if one treated all self-employed individuals as a separate industry, they would be one of the regions largest, employing more than 130,000 persons. xiv Later in this report, in the section labeled PDX Entrepreneurship, we will address venture capital funding in more detail, however it should be noted that Portland ranks 18th on this measure despite the dollars invested being well below the mean due to a small number of MSAs receiving the lions share of venture capital. 9

State of Entrepreneurship In Portland April 30, 2011

TABLE 1, Top 51 MSA Cross-Sectional Comparison


NonSmall Employer Firms per Firms per 1,000 1000 Population Population 22.4 86.0 21.1 82.5 21.9 69.8 20.8 69.7 23.9 74.8 20.2 47.8 23.3 74.4 22.0 72.4 18.9 61.4 22.6 64.8 19.4 72.1 19.0 80.2 26.7 84.8 20.1 64.8 21.6 66.5 18.1 77.6 21.9 66.1 24.2 67.5 22.4 68.6 19.1 67.1 23.1 85.9 20.8 68.5 17.1 68.6 29.9 121.8 21.5 53.6 24.8 75.9 21.3 87.2 22.5 80.3 25.3 84.6 23.7 80.8 25.2 82.7 21.9 63.4 18.9 62.6 21.9 58.6 25.7 70.3 23.7 64.6 23.8 75.1 22.7 62.4 14.3 65.6 19.6 59.4 19.5 69.9 21.8 61.7 25.7 73.8 17.2 72.2 23.0 76.9 24.8 85.7 22.1 69.7 26.4 68.7 23.8 75.6 20.2 52.9 22.8 81.3 22.0 20.2 23.7 4 72.1 65.2 78.9 25 Percent SelfEmployed 11.8% 11.8% 9.4% 11.2% 10.8% 7.8% 10.2% 9.7% 9.2% 9.5% 8.9% 10.5% 11.9% 9.3% 9.6% 10.7% 9.5% 10.3% 9.7% 8.9% 14.6% 9.0% 8.8% 16.2% 8.7% 10.5% 11.9% 13.0% 11.2% 11.6% 12.0% 9.4% 11.5% 9.0% 13.1% 9.6% 10.7% 9.3% 11.6% 8.9% 11.8% 9.2% 10.2% 10.1% 13.7% 13.5% 10.7% 11.5% 12.6% 8.1% 10.0% 10.6% 9.3% 11.7% 5 Venture Capital Investment $ per capita 77 213 76 17 541 46 14 44 16 60 12 87 169 19 3 54 44 NA 20 4 135 17 16 10 2 141 24 1 94 12 41 93 49 62 69 25 243 10 0 10 19 158 56 404 1489 2473 252 22 11 2 131 151.74 14.50 93.75 18

MSA Atlanta Austin Baltimore Birmingham Boston Buffalo Charlotte Chicago Cincinnati Cleveland Columbus Dallas Denver Detroit Hartford Houston Indianapolis Jacksonville Kansas City Las Vegas Los Angeles Louisville Memphis Miami Milwaukee Minneapolis Nashville New Orleans New York Oklahoma City Orlando Philadelphia Phoenix Pittsburgh Portland Providence Raleigh-Cary Richmond Riverside Rochester Sacramento St. Louis Salt Lake City San Antonio San Diego San Francisco San Jose Seattle Tampa Virginia Beach Washington Mean 25th Percentile 75th Percentile Portland Rank

Population 5,261,296 1,592,590 2,663,805 1,108,672 4,492,338 1,126,513 1,646,431 9,496,853 2,143,824 2,094,885 1,753,010 6,153,474 2,453,393 4,457,523 1,186,485 5,597,958 1,692,737 1,297,813 1,981,480 1,827,655 12,784,612 1,232,304 1,279,120 5,392,118 1,543,378 3,197,620 1,520,160 1,109,411 18,922,571 1,189,158 2,028,669 5,823,285 4,165,921 2,354,159 2,166,491 1,598,348 1,043,961 1,211,101 4,066,573 1,032,488 2,082,186 2,805,465 1,095,362 1,984,921 2,959,734 4,216,125 1,786,355 3,298,225 2,715,273 1,659,679 5,302,295 3,207,761 1,531,769 4,116,247 23

Average Firm Size 16.1 16.2 16.4 17.4 18.5 17.3 17.7 16.9 18.9 17.3 19.3 18.6 14.7 16.5 18.5 18.5 17.9 14.8 17.4 20.8 15.5 17.8 20.4 11.4 19.7 18.0 18.4 15.4 14.2 14.6 16.1 17.1 18.0 17.5 14.5 14.7 14.7 16.3 16.4 18.2 15.1 17.4 17.1 17.8 15.1 15.8 19.9 15.4 13.9 16.0 17.2 16.8 15.4 18.0 48

College Attainment 34.6% 38.2% 34.3% 26.2% 41.9% 26.9% 32.0% 33.0% 28.1% 27.0% 32.8% 29.6% 37.5% 26.5% 34.8% 28.2% 31.8% 24.6% 31.9% 21.9% 29.9% 24.0% 24.7% 29.5% 30.9% 37.6% 29.4% 23.5% 35.2% 26.4% 26.3% 32.1% 26.5% 28.7% 33.3% 28.0% 41.5% 30.6% 19.0% 32.1% 29.8% 29.0% 30.0% 24.6% 34.2% 43.4% 43.5% 36.4% 25.6% 27.4% 46.8% 31.0% 26.7% 34.2% 15

Creative Class 7.6% 11.0% 9.3% 5.2% 10.5% 5.5% 6.6% 6.9% 7.0% 6.1% 8.3% 7.3% 9.0% 7.9% 8.2% 7.2% 7.1% 5.2% 7.0% 4.6% 8.0% 5.0% 4.5% 4.9% 7.0% 9.3% 6.3% 5.5% 7.9% 5.8% 6.6% 7.7% 6.5% 6.4% 8.6% 6.2% 11.6% 6.7% 4.1% 8.1% 8.2% 7.0% 7.3% 5.3% 9.7% 11.8% 17.2% 10.9% 5.7% 7.0% 13.8% 7.6% 6.1% 8.3% 12

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In-Depth City Comparisons


After reviewing comparison quantitative data for the 51 MSAs of one million or more in population and getting input from the PDC and the advisory group members for this study, we selected six cities to include as Portlands comparison group. It was important to compare similar sized cities and to keep the number small to allow for depth of investigation and analysis. Lastly, it was important to include cities that are frequently used in comparisons with Portland. Below we summarize the rationale used and provide an economic overview of each city in the comparison group. Rationale for including the specific cities in our comparison group: 1. Austin On many Portland comparison lists, similar size to Portland 2. Cincinnati Good size comparison. A lot of similarities to Portland such as no large comprehensive research university. It isnt a city Portland necessarily aspires to be like, but interesting to compare to given Midwest location 3. Denver Good match size wise and is on both the PDC and Greenlight Greater Portland comparison lists 4. Minneapolis/St. Paul Also on the PDC list and a good match with high scores in the creative class and college attainment measures 5. San Francisco The only California city we have included. Other California MSAs were discussed as possibilities but we decided this is the best one to compare to Portland. Core city is similar in size to Portland and also is on the PDC list. 6. Seattle Given close proximity to Portland and many similarities, as well as many people will want to know how it compares on our measures Below find additional economic and other information on Portland followed by each city in the comparison group. Portland: MSA Population: 2,166,809 Urban Population: 551,226 Household Income: Mean - $67,384, Median - $48,993 Median Age: 37.5 Top 50 Bank HQ: None Fortune 500 HQ: 2 Unemployment Rate: 10.2 Research Funding (millions): OHSU, PSU Research Funding: $296.21 Education Attainment: Bach 39.6%, Prof 15.5% Major employers (rank): Intel Corp(1), Providence Health Systems(2), Safeway(3), OHSU(4) Fred Meyer Stores(5), Kaiser Foundation Healthcare(6), Legacy Health Systems(7), State of Oregon(8), Nike(9), City of Portland (10)

Austin: MSA Population: 1,590,744 Urban Population: 746,835 11

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Household Income: Mean - $72,857, Median - $51,004 Median Age: 31.4 Top 50 Bank HQ: None Fortune 500 HQ: 1 Unemployment Rate: 6.9 Research Universities: Univ. of Texas at Austin Research Funding (millions): $444.65 Education Attainment: Bach 42.6%, Prof 16.4% Major employers (rank): State of Texas(1), Dell Inc.(2), The University of Texas at Austin(3), Austin Independent School District(4) , U.S. Government(5), City of Austin(6), IBM Corporation(7)

Cincinnati: MSA Population: 2,138,528 Urban Population: 299,577 Household Income: Mean - $52,706, Median - $33,524 Median Age: 35.7 Top 50 Bank HQ: Fifth Third Bancorp (23) Fortune 500 HQ: 6 Unemployment Rate: 9.7 Research Universities: UC Research Funding (millions): $147.72 Education Attainment: Bach 28.9%, Prof 11.2% Major employers (rank): Kroger(1), University of Cincinnati (2), The Procter & Gamble Company(3), Cincinnati Childrens Hospital Medical Center(4), Health Alliance of Greater Cincinnati(5), TriHealth Inc(6), Archdiocese of Cincinnati(7)

Denver: MSA Population: 2,454,378 Urban Population: 584,563 Household Income: Mean - $67,903, Median - $45,002 Median Age: 35.3 Top 50 Bank HQ: None Fortune 500 HQ: 1 Unemployment Rate: 7.7 Research Universities: UC, University of Denver Research Funding (millions): $602.78 Education Attainment: Bach 38.0%, Prof 15.5% Major employers (rank): Federal Government(1), Walmart Stores (2), King Soopers Inc(3), Centura Health(4), Safeway(5), Quest Communications(6), HCA-Health One(7)

Minneapolis: MSA Population: 3,197,225 Urban Population: 358,896 Household Income: Mean - $67,563, Median - $47,097 12

State of Entrepreneurship In Portland April 30, 2011

Median Age: 34.2 Top 50 Bank HQ: U.S. Bancorp (11) Fortune 500 HQ: 10 Unemployment Rate: 6.4 Research Universities: UM Research Funding (millions): $563.91 Education Attainment: Bach 42.5%, Prof 15.6% Major employers (rank): University of MN-Twin Cities(1), U.S Government(2), State of MN(3) 3M CO(4), Fairview University MED CTR(5), Park Nicollet Methodist Hosp(6), Thomson Reuters(7)

San Francisco: MSA Population: 4,222,756 Urban Population: 798,176 Household Income: Mean $104,413, Median $71,957 Median Age: 40 Top 50 Bank HQ: Wells Fargo & Company (4), Unionbancal Corporation (25) Fortune 500 HQ: 11 Unemployment Rate: 10.1 Research Universities: Stanford, UC Berkeley Research Funding (millions): $1,399.92 Education Attainment: Bach 50.3%, Prof 19.4% Major employers (rank): City&County of San Fran(1), University of California SF(2), Wells Fargo & CO.(3), State of California(4), California Pacific Medical Center(5), San Francisco School District(6), USPS(7), PG&E Corp(8)

Seattle: MSA Population: 3,299,005 Urban Population: 571,293 Household Income: Mean - $87620, Median $61,055 Median Age: 38.1 Top 50 Bank HQ: None Fortune 500 HQ: 7 Unemployment Rate: 8.4 Research Funding (millions): UW Research Funding: $931.06 Education Attainment: Bach 53.8%, Prof 21.7% Major employers (rank): University of Washington(1), Seattle-Tacoma INTL AP(2), Microsoft(3), Boeing(4), UW Medical Center(5), Washington State(6)

Later in this report in the section on The Index of Entrepreneurship Indicators we describe and report additional data on Portland and the above cities. However, in order to provide a more fundamental lay of the land we researched organizations and programs in Portland and each of the six comparison cities and created seven interactive entrepreneurship ecosystem maps. The interactive aspect of these maps with live links to each organization is what makes them an especially useful tool for exploring programs 13

State of Entrepreneurship In Portland April 30, 2011

and organizations that support entrepreneurship and to provide a visual assessment of the depth of resources available to entrepreneurs in each city. We encourage you to take the time to explore each map. They are available at this webpage: City Entrepreneurship Interactive Ecosystem Maps. (http://www.up.edu/cfe/default.aspx?cid=11226&pid=3832) The maps will be maintained and kept up to date by staff at the University of Portland Center for Entrepreneurship (please send any corrections or updates to ecenter@up.edu). Figure 3 below provides a sample, non-interactive, snapshot of the entrepreneurship ecosystem map for Portland to give you a taste of what they look like.

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FIGURE 3, Sample Map - Snapshot of the Portland Entrepreneurship Ecosystem

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State of Entrepreneurship In Portland April 30, 2011

PDX Entrepreneurship
In addition to comparing Portland to other metropolitan areas on the question of Is Portland entrepreneurial? a significant part of this study was to get input from people in the region on their view of entrepreneurship in Portland. This was accomplished through in-person interviews and on-line surveys.

Interviews
The list of interviewees was developed with the intent of gaining input across a variety of industry sectors and various constituency groups, including entrepreneurs, investors and service providers. In developing the list, we sought to include individuals working in each of the five target clusters identified as strengths for Portland by the PDC: athletic and outdoor; clean technology; advanced manufacturing; software; and research and commercialization. Also included are leaders of companies and organizations in the biosciences, as well as some scalable local firms not in the target clusters but which are experiencing growth. The focus is on firms that are doing all or a significant share of traded sector business, as well as a few firms that have been able to grow locally with little or no traded sector participation. Twenty five people were interviewed for this study. The structure of the interview used a Strengths, Weaknesses, Opportunities and Threats (SWOT) framework to gain an understanding of the interviewees assessment of entrepreneurship in Portland. See appendix A for a description of the interview protocol. The interview results helped to inform the survey design and SWOT summary provided in a later section of this report.

Surveys
A survey instrument was developed to gather input on entrepreneurship in Portland and suggestions for improving the environment. It was sent specifically to 89 people targeted as knowledgeable about entrepreneurship in Portland. After several rounds of follow-up calls and emails 30 people completed the survey for a response rate of 34%. This survey is referred to as Expert Survey in the results below. In addition we coordinated with a number of organizations involved in entrepreneurship in Portland for on-line distribution to their members. The participating organizations are the Oregon Entrepreneurs Network (OEN), the Software Association of Oregon (SAO), and the Oregon Bioscience Association (OBA). An additional 119 people completed the survey, primarily via the link used for distribution to OEN members. This survey is referred to as the Open Survey in the results below. The survey questions and summarized results are shown below. Expert Survey responses are shown separately from those of the Open Survey. Its interesting to note that for some questions the answers are similar, whereas on other questions the responses vary significantly. One of the differences between the two groups is there is a smaller percentage of entrepreneurs and more investors in the expert

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respondents in comparison to the open respondents. A similarity is both groups were mostly male. The complete text responses to key questions from the Open Survey are shown in appendix B.
Section 1-The Portland Entrepreneurial Scene Do you consider Portland to be an entrepreneurial city? -Yes -No -No Opinion Expert: 84% 16% 0% Open: 79% 19% 2% 2. Why or why not? 1.

Expert Responses: Why Portland is entrepreneurial. Lots of small business startups of all types, even during downturn we've experienced the last few years. Pioneer attitude. Relatively inexpensive place to live allows flexibility to start businesses. There is an independent and creative spirit here, which fosters innovation. In addition, the entrepreneurial community is one that is collegial and collaborative. Very experienced entrepreneurs are willing to "give back" and to coach and mentor lessexperienced entrepreneurs. Portland attracts entrepreneurs to its city, in part, because of life style. The Portland lifestyle is conducive to the activity of the Entrepreneurs. An entrepreneur blends the dream with the pragmatic, to create a business with potential for growth. Within the City of Portland metro area, there resides 50,000 plus small businesses with fewer than 10 employees. Portland is small and a good testing ground for ideas and business. I do think that in the last 5 years small locally owned businesses matter. People are wanting to support local companies. That doesn't mean the city will not court larger business coming into our city. It doesn't mean I like all the food carts that line the streets downtown. My feeling is that they look junkie. Also, 3 of my past employees have started sign companies. I do not have a comparison, but I would venture to say that it seems like there are more small businesses and entrepreneurs. It is a very supportive peer environment for entrepreneurs, but not as supportive in terms of financial assistance or cost of doing business. Large, active support networks to help entrepreneurs get started - OEN, SAO, OAF, Capybara Ventures, PSBA, strong university centers for entrepreneurship. Easier to start a business here and get connected to mentors/advisors than in other cities. Pattern of talented folks moving here to work at Intel, Mentor, Nike, etc. and then going out on their own to start a business. Vibrant urban core that is attractive to young, creative, tech-savvy entrepreneurs. In my opinion, the Portland area has always exhibited an entrepreneurial spirit. It is a marketplace of creative thinkers, and an incubator for new business opportunities. Has growing infrastructure to support entrepreneurial activity from the OEN to NedSpace to Angel Oregon and other angel groups. Has professional expertise in lawyers, accountants etc that focus on start up and emerging businesses. Technology seems to be where most of the focus and interest lies at all level; I believe there's an opportunity to support and build more activity around consumer products as well as those businesses that may not need funding but could use support/help in other areas; examples are retail, restaurants, apparel design/production, etc. Other challenge is making small business and entrepreneurs aware that all of this exists to help them!! Because there are lots of small to medium size companies. Strong service industry created by small business owners. Reputation as such, which becomes a self-fulfilling prophecy. Large number of independent contractors in the tech, design, and "knowledge-worker" industries. Lots of start-ups/new business licenses. Young, energetic culture. Lack of affection for large companies. High level of creative product innovation, risk oriented business climate, small but aggressive and supportive infrastructure. Portland has put in many networks and funding sources to support this activity. It seems like Portland is a town of small/medium sized businesses. I spend time with the four growth clusters that I perceive in the area (sportswear/fitness, sustainable industries, creative services, software) and see a lot of innovative ideas. The cost of living helps lower the barrier to entry, and the urban planning is conducive to productivity and collaboration (shorter commutes and easier to get around town during the day for meetings). The large number of small businesses in the city suggests a lot of individuals want to start and build businesses.

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State of Entrepreneurship In Portland April 30, 2011 Portland is filled with a creative, industrious, and individualized spirit. Be it the Web, craft brewing, craft distilling, food carts, music, bicycles, mobile development, open source or any combination thereof, there are any number of interesting entrepreneurial pursuits that capitalize on Portland's creative spirit. The Portland metro area has 50,000+ small businesses with a vibrant small business culture. The City of Portland is focused on supporting small business however, with budgetary conditions hard decisions are being made. Open Responses Summary: Why Portland is entrepreneurial.

Many respondents felt Portland is entrepreneurial as evidenced by the creative people living in the city who are well educated and always seem to be working on new ideas for businesses. Another frequently mentioned idea was that Portland is collegial, friendly, sort of anti-big business. Several people also suggested that many Portlanders are sort of forced into being entrepreneurial due to the high unemployment rate over the past few years. See all responses in appendix B.
Expert Responses: Why Portland is not entrepreneurial. It is not a risk taking city. Very few investors are here. On a small scale yes - meaning an active place to start small companies that tend to stay small. But not an entrepreneurial city for major enterprise initiation. Lack of funding sources. While OEN and other groups have deep experience, there is, in reality, very little funding and there seems to be funding just for technology. There seems to be very, very little brain drain out of Nike, Columbia and Adidas helping start and fund cutting edge consumer goods. I checked both because there are outstanding entrepreneurs in the region across multiple industries. However... the community does NOT support entrepreneurs. In fact, there is a common misunderstanding that entrepreneurs are just greedy, selfish individuals. Also, the principal gatekeepers at the major foundations who control the money generally created by dead entrepreneurs (think Meyer, Murdoch, OCF) put NO money back into supporting a dynamic entrepreneurial environment. It is crippling. It is in that there are other entrepreneurs drawn to the city for its green values and there are organizations like OEN to support them. It is not entrepreneurial as there is no funding base here. It is near impossible to raise money here. Lot of ideas, but not as many scalable companies. Some innovative policy efforts that support relevant innovation: Green Building, Land Use planning, etc. Not enough research done in the city's universities. At this point, it lacks the infrastructure to become a truly supportive environment for entrepreneurs. Specifically, it lacks the venture capital, original research, supporting networks, experienced executives, and an attractive tax structure to be competitive and supportive. It also lacks major customers for B-to-B businesses - with only one F500 firm based in the state, businesses here must be consumer or small-medium business focused to find local customers. Open Responses Summary: Why Portland is not entrepreneurial.

Respondents who felt Portland is not entrepreneurial suggested that while there might be a lot of small business and start-ups its not really entrepreneurial in the sense of striving to develop growth businesses. Many also cited what they feel is a lack of investment capital or human resources or motivation to be entrepreneurial in the sense of building big companies. See all responses to the Open Survey in appendix B.
3. In your opinion, compared to other cities in the U.S., Portland is: -MORE entrepreneurial than others. -LESS entrepreneurial than others.

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State of Entrepreneurship In Portland April 30, 2011 -AS entrepreneurial as others. More Expert: 53% Open: 42% 4. Less 13% 24% As 33% 34%

Please indicate how strongly you agree or disagree with each of the following statements. a-My business growth has been limited by access to growth capital. b- I have been able to find a good supply of experienced executive level talent to grow my company. c- My employees and prospective employees in Portland are willing to work at a level necessary to build new companies.

(1 = Strongly Agree, 3 = Neutral, 5 = Strongly Disagree) Limited Capital Talent Available People Work Hard Expert: 3.1 3.9 2.9 Open: 2.5 3.3 2.8 5. As you think about economic conditions in the Portland area over the next five years, what is the single most important thing that can be done to promote the success of businesses like yours?

Expert Responses: Single action to promote business success. Change tax structure Fix the business ecosystem World-class, industry-driven R&D at PSU and OHSU Access to growth capital Tax incentives to angel investors Increase availability of capital resources 1-2 successful exits for visible high growth companies Government support, tax laws, infusion of capital Capital, people Change the tax structure to encourage risk-taking Lower tax structure Better access to capital Increase access to loans and lines of credit More capital deployed to demonstrate cycle Tax reform - both business tax and capital gains More disposable income for local residents Enable faster growth of sustainable businesses Mentorship Access to capital, business education and advising Loosen credit FUNDING SOURCES! Actively encourage sustainability in business The state being considered "friendly" to business Increase access to a variety of capital More entrepreneurs who think big New construction/remodels Help us to afford benefits for our employees That political and community leaders soon get it

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State of Entrepreneurship In Portland April 30, 2011 Open Responses Summary: Single action to promote business success. In declining order from most cited to least cited, the actions suggested by respondents to the Open Survey are: 1. 2. 3. 4. 5. 6. 7. Better access to capital or all types (seed, VC, bank, etc,) Reduce taxes or change them to provide incentives for start-ups and small businesses Provide more support for small businesses and start-ups directly and via organizations such as OEN Support education at all levels A stronger economy so customers have money Promote positive success stories Limit government

Interestingly a couple of things were rarely mentioned such as health care and more incubator space. 6. What are three barriers to growing successful businesses in Portland?

Expert Responses: Three barriers to business growth. Our state government seems to have made their bet economically into green energy and no other areas of sustainability will get access to capital. Access to capital (both debt and equity); a weak city and state economy; lack of civic vision for what it takes to build healthy, vibrant, sustainable businesses Access to capital, outside perspective of government's attitude toward business, tax structure 1) No recent big exits have created the kinds of experienced executives, who then start new companies. 2)That's also resulted in fewer angels willing to invest large amounts of capital. 3)Tax issues. 1. Inability to access capital 2. City tax and permit structure 3. Lower levels of consumer spending 4. Lack of education related to how to conduct business from a traded sector and international marketplace point of view 5. Focus and accountability Lack of senior management talent. Lack of external world perspective on what it takes to be great. Way too insulated. Also way to "excuse" driven. When things don't go as planned look to place external blame rather than look in the mirror. 1. Business and stores are moving from Portland, store fronts are vacant. 2. Cost of health care. 3. Clean up Portland, get bathrooms and street people housing. Affordable healthcare and other benefits to be able to attract talent to smaller businesses, cash flow /capital and availability of skilled workers interested in working hard for small / entrepreneurial companies. 1. Insufficient belief the power of the entrepreneurial economy 2. Pathological fear that someone might "get rich" 3. Naive belief that "young creatives" (ala Richard Florida and Joe Cortright) equates an entrepreneurial economy -sense of entitlement in the work force here. -lack of risk taking by the bankers and venture capitalists. -tax structure. 1. Lack of work ethic, ambition of Portlanders. People come here for "balance." Work/life balance and entrepreneurship don't go together. 2. Lack of successful, serial entrepreneurs who know how to lead and manage a growth company. 3. Few academic and research faculty who are entrepreneurial. Limited growth capital for small business, stronger support from local/state government, business tax relief.

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State of Entrepreneurship In Portland April 30, 2011 Tough to attract people from outside the state - income taxes are high, property taxes are high, schools are struggling. Not very attractive. Access to capital at various stages of a growing business. Taxes. People . Financial support Time: Portland is still learning how to grow businesses. Experienced leadership: I agree that there is not an abundance of executive level mentorship. Mentoring/Modeling: the best businesses and business leaders I know in the area are all located in Lake Oswego. Portland needs to figure out how to get good leadership in the city. Lack of real science-based innovation; lack of senior executive talent; lack of deep pool of investment capital. Tax structure, lack of angel and venture capital, lack of experienced management Capital in Portland is too focused on tech and software only. We need to be a more balanced red and blue state. Oregon's tax structure that penalizes capital gains. Portland's tax structure also not helpful. 2. Lack of support for higher education to provide a steady flow of talent. 3. Lack of business loans. Banks are very unwilling to loan money to new businesses. Funding, Funding, Funding Access to capital, top level sales & marketing talent, lack of high visibility successful companies. Experienced and cost effective business development resources. 2. Access to enough credit 3. More efficient human resource options (staffing, mentoring, internships, contractors) through crowd sourcing talent. Access to capital. 2. Access to talent. 3. Lack of Pro-Business policies. 1) High tax rates 2) Lack of venture capital 3) Lack of experienced talent Lack of Strong and Unique Business Models. Too narrow of focus on Tech businesses. Lack of talented executives. -- Willing and able business lenders and investors -- City Hall leadership that does not make business formation and employment growth an absolute priority -- Absence of world-class university (PSU and OHSU are good, but not good enough) Lack of experienced mentors and advisors, lack of understanding about what entrepreneurial resources exist, lack of seed capital 1. Access to capital; 2. Under capitalization of the business; 3. Lack of business experience and knowledge on the part of the small business owner. Smaller population = access to a smaller quantity of talent; 2. Distance from major markets requires travel to access to more influencers, customers, etc.; 3. ?

Open Responses: Three barriers to business growth. Some of the more common responses from the Open Survey include lack of capital, executive talent, the tax structure, lack of engineering talent, insufficient support from government, and the economy. See appendix B for all the responses. 7. If you live in Portland and were to start a business, would you locate it in Portland? a. Yes, I would start my business in Portland. b. No, I would start my business in another area outside the City of Portland, but in the State of Oregon. c. No, I would start my business in another state. d. I do not know. e. I do not live in Portland a. 73% 47% b. 3% 23% c. 3% 11% d. 10% 11% e. 3% 6%

Expert: Open: 8.

How do you see the Portland business environment changing in the future? a. The Portland business environment will grow. b. The Portland business environment will become more vibrant.

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State of Entrepreneurship In Portland April 30, 2011 c. d. e. f. g. The Portland business environment will become more competitive. Portland businesses will move to different cities with different business environments. Revenue for existing Portland businesses will increase. The Portland business environment will make it difficult for new start-ups firms to form. Overall, the Portland business environment will be better than it is today. (1 = Strongly Agree, 3 = Neutral, 5 = Strongly Disagree) a. b. c. d. e. f. g. 3.2 2.9 2.6 2.6 2.9 3.1 2.6 3.0 2.8 2.6 2.4 2.7 2.8 2.7 Which of the following trade associations, networking groups, or clubs are you familiar with? Check all that apply. a. Oregon Entrepreneurs Network b. Software Association of Oregon c. Oregon Bioscience Association d. Tech America e. Venture Mash f. Natural Step g. None of the above h. Other (Text box provided for answer.) a. 90% 92% b. 70% 62% c. 33% 21% d. 53% 24% e. 17% 8% f. 33% 13% g. 5% 2% h. 50% 34%

Expert: Open: 9.

Expert: Open:

10. Which one of the following, do you feel, is the most important motive for pursuing your own business opportunity? a. Greater Independence b. Increase personal income c. Maintain present income d. More enjoyable work experience e. Change your field of business f. None of the above g. Dont know h. Other (Text box provided for answer.) a. 47% 49% b. 37% 35% c. 3% 3% d. 33% 46% e. 7% 7% f. 0% 2% g. 0% 0% h. 33% 28%

Expert: Open:

11. Is your company now, or has it ever been, located in one of the following buildings/spaces/facilities? a. Souk PDX b. Dekum Sustainability Incubator c. Left Bank Project d. NedSpace e. Center of Excellence f. Portland State Business Accelerator g. PIE PDX h. WebTrends Incubator i. Food Innovation Center j. Olympic Mills Commerce Center k. General Automotive Building

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State of Entrepreneurship In Portland April 30, 2011

Expert: Open:

a. 1 0

b. 0 0

c. 1 0

d. 1 3

e. 0 0

f. 0 8

g. 1 0

h. 0 0

i. 0 0

j. 0 0

k. 1 1

12. Which one of the following industry categories best describes your business? a. Construction b. Manufacturing c. Wholesale d. Retail e. Transportation and Warehousing f. Information, IT, Software, or Web g. Finance and Insurance h. Real Estate i. Professional, Scientific, or Technical Services j. Educational Services k. Health Care l. Arts, Entertainment, or Recreation m. Accommodation or Food Services n. Other (Text box provided for answer.) a. Expert: 0 Open: 1% b. 10% 10% c. 3% 3% d. 0 2% e. 0 1% f. 17% 33% g. 17% 3% h. 0 1% i. 17% 19% j. 0 3% k. l. m. n. 3% 0 0 30% 2% 2% 2% 17%

Section 3-Background Information 13. I am Male Expert: 83% Open: 82%

Female 17% 16%

14. Select your age group: Expert - <18 0% - 18 24 0% - 25 34 13% - 35 44 23% - 45 54 33% - 55 65 30% - >65 0%

Open 0% 0% 10% 40% 29% 18% 2%

15. Which one of the following best describes the type of work you do? a. Entrepreneur b. Investor c. Legal d. Consultant e. Accounting/Finance f. Academic g. Industry Research h. Marketing/Sales i. Government j. Engineering

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State of Entrepreneurship In Portland April 30, 2011 k. l. a. Expert: 30% Open: 50% Employee Other (Text box provided for answer.) b. 13% 3% c. 3% 2% d. 17% 20% e. 0 6% f. 0 1% g. 0 0% h. 17% 7% i. 3% 1% j. 17% 3% k. 0 2% l. 0 7%

16. Which of the following statements describes you? Check all that apply. a. I have never started a company (please skip to the next question). b. I started the company I am currently with. c. I have started several companies in that past. d. I have secured venture capital funding for this or a previous business venture. e. I have secured "angel" capital funding for this or a previous business venture. f. I have secured bank funding for this or a previous business venture. g. My company is fully owned by my family members or myself. h. I was laid off, retired, or left a company in which I was an employee prior to starting this business venture. a. 7% 8% b. 84% 71% c. 84% 50% d. 58% 28% e. 47% 40% f. 89% 35% g. 58% 44% h. 26% 36%

Expert: Open:

17. Given the state of the business you are currently affiliated with, and the outlook for the business over the next 12 months, how optimistic are you that the business will be successful in the future? a. Very Optimistic b. Pessimistic c. Not Sure d. Other a. 63% 63% b. 10% 4% c. 17% 18% d. 7% 11%

Expert: Open:

18. Which of the following do you feel comes first when first deciding to start a business? a. The business idea b. The desire to start a business c. Both at same time d. Don't know e. Other (Text box provided for answer.) a. 23% 31% b. 37% 25% c. 33% 31% d. 0% 3% e. 7% 9%

Expert: Open:

19. What actions do you think the City of Portland should take to improve the environment for starting and growing businesses in the City? (Text box provided for answer.) Expert Responses: Actions the City of Portland should take to improve entrepreneurship. While the seed fund was an interesting idea, there are so many restrictions around the money; it will lack the impact it could have. Someone needs to get the boards of the major foundations and endowments in a room and ask them why they are systematically strangling the flow of capital to the region.

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State of Entrepreneurship In Portland April 30, 2011 The Oregonian needs to re-energize its business section. Go back and look at it from the mid '90s it was on par with the SJ Mercury News. Now? The politicians at the state and local levels need to actually understand what business does and why it's important. Create an affordable healthcare insurance pool (or supplement)so small companies can provide better benefits. Perhaps other benefits too, so small co's can compete with large companies for talent. If a person wants to work at a small company, give them incentives for taking a little extra risk. Give small businesses with an established track record some tax breaks. Parking for Downtown and other areas is becoming a problem, reduce the parking rates. Access to funding Clean up the areas where homeless people are living, better police patrolling, stop the shootings. No one wants to go out at night downtown right now. Of even on the east side. Tax breaks Partner up building owners push them to reduce rents to keep business in the properties, nothing looks worse than all the empty store fronts. Reduce property tax for the building owners. Get rid of personal property tax for small business, you already bought the stuff with taxed money, now I have to pay tax on it again? Have the city sponsor buy local, make a big deal out of the great companies we have, get the TV stations to loosen up a little and do some promoting. Small business people can't afford the Oregonian rates or TV advertising. Let others know what we have in the city. Maybe the city needs to partner up with Wieden and Kennedy for a media blitz. Convince the folks in Salem to reform the tax structure so that it did not penalize successful entrepreneurs. (or drive them across the Columbia) Continue model of trying to support (buy from) local start-ups where their products meet the needs of the City - and then be testimonial salespeople to other cities/states. Provide role models and reference points to local entrepreneurs, even if it means importing those good examples to speak/mentor. The City of Portland is making progress in its progress on creating user-friendly portals and access to information/services and departments. Continue with this progress. They're already headed down the right path with the Portland Seed Fund, the investment in Portland Ten and OEN, etc. They do need to focus on streamlining things like the permitting process, etc. Continued research into what's working well in similar cities will also be very valuable. Portland Seed Fund is a good start. First, show that your care about the success of businesses that already exist today. Examine and remove any unnecessary barriers to starting and growing a business. Put all the endless city planning aside for a moment and move into action. Put the priority on getting things done, with the measurement being the rate of startups in the city and the pace of growth of existing businesses. The city ought to get off their tales and create zones for specific industries that support new businesses with resources from office space, manufacturing connections, talent, etc. Right now, the city has ZERO exposure to new companies and offers zero support. 1. Make consistent and transparent regulations and requirements for starting up and growing a small business and educate city staff to help direct small business. 2. Promote success stories of entrepreneurs Recruit, attract, and retain seasoned entrepreneurs to serve as mentors for the startup community. Start by making business growth and job formation a top priority. Create a bureau of entrepreneurship, for example, to demonstrate its priority. Basically, the City needs to be seen as a friend to business (without being seen as a shill for business). The City needs to give far more than lip service to entrepreneurship. It needs to place development of prosperous, sustainable businesses at the heart of what it means to be a sustainable city. And it needs to start by focusing on help for the businesses that are already here instead of chasing out-of-state firms to locate here. More Angel Groups 1) reform taxes: both corporate tax and local capital gains 2) Create incentives for businesses to locate in the city 3) Bolster economic development focus, funding, and reach to bring entrepreneurs, businesses, and supporting firms to the market 4) Develop formal partnerships with universities and invest in networks to commercialize local research Establish pro-business, pro innovation policies including recognition that the city's value is as a laboratory/proving ground

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State of Entrepreneurship In Portland April 30, 2011 for innovations in urban infrastructure. Strong support/effort to attract investment capital to the region. Strong support of PSU and OHSU to attract capital for research. Provide a vision and enact policies that support economic growth clusters; but it's more than just the City of Portland. We need full four sector collaboration (govt, nonprofit, education, business). Fully fund the seed capital fund for the $1.5 rather than dinking around at $500k and asking others to pitch in. Eliminate the City income tax on businesses. This is an extra cost of doing business and profitable businesses will leave the city. Elect leaders that understand business and eliminate red tape. Attract a world-class bio-tech, bio-informatics or large pharmaceutical company to the south waterfront. Give them all the tax breaks and land use help they need to make it attractive. The presence of that firm will, over time, create a flywheel of new companies much as Intel has in greater Hillsboro. While it is always easier in theory to grow companies and employment from the base you currently have, Portland needs something to jump start a new breed of companies. Recruit a couple strategic Icon business headquarters. Availability of seed capital, mentoring programs, tax relief for entire business environment. Increase the city's investment in the Portland Seed Fund. Shift funds for microenterprise support to organizations like Portland Ten that help scalable businesses. Create a tax haven for certain types of businesses that start within the city during a certain period of time (e.g., no business tax for 5 years for software businesses that start during 2011.) help lower overhead with incentives and lower taxes Involve local small business when setting policy -Make it a focus and true commitment! Give the ecosystem supporting entrepreneurs and the small businesses themselves visibility and support through the media, through promoting the various activities like Angel Oregon, etc. -Bring the angel groups together along with others involved in promoting, funding and supporting start up/early stage/growing companies to brainstorm this question. A survey isn't enough!! A local government that supports small business, less burdensome tax system, more incentive to stay within the Portland metro. 1. Preserve urban growth boundary - makes Portland a fun, exciting, and desirable place to work and live. 2. Get local industry to collaborate more with local research institutions - contract R&D, consulting, internships, recruiting, etc. 3. Get the state to repeal measures 66 & 67, and institute a sales tax. 4. Merge the city with Metro. Most local problems and opportunities are regional in nature and should be addressed at a regional level - transportation, land use planning, education, environmental issues. I don't know that the city as the ability to fix the business ecosystem. Open Responses: Actions the City of Portland should take to improve entrepreneurship. Its very interesting reading through these responses in that you will really sense the passion; however there isnt a lot of commonality in the suggestions (see appendix B). They range from promoting business success, to lowering taxes, to helping line up capital and improving education at all levels. 20. Is there anything else you would like to tell us about your experiences working in Portland relating to starting and growing companies? (Text box provided for answer.) Expert Responses: Anything else related to PDX entrepreneurship? Just that I'm very, very saddened that a state and city with so many assets are squandering them. Think about the fact that Oregon has a persistent 10+% unemployment rate and that there is no sense of urgency about addressing the economy. Lots of talk, too much talk and too little doing. Sustainability and clean tech are other examples. Oregon prides itself on how clean and green it is. But it has been largely impossible to get those organization and individuals who talk so much about it to actually invest to build long term capacity. It took me a long time to learn how to market me firm on a national basis, it would be good to have programs to help

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State of Entrepreneurship In Portland April 30, 2011 companies find successful ways to access bigger markets outside of Portland if that is what is needed to reach a critical mass or optimal size / profitability. I feel like someone else could have been better at answering many of these questions. I gave it my best attempt. This did make me think about our business environment, and I realize that our climate for new start ups may not be that healthy right now, but this will change. I was lucky to have a business partner who already had a business when I started. He was a real help, I don't think I could have done it on my own. Having a business mentor is really important, and that would be something to create for new business people, is a good support system of other business owners. Someone to call on, to ask questions, to find an accountant, business insurance, telephone systems, computer systems etc on and on...When you are starting out, there are so many firsts, and in most cases you fly by the seat of your pants. You just don't know any better. It is when you start thinking about everything it gets scary. I appreciate the efforts that PDC is making to do this research, and to collect this data. Portland is an awesome community waiting to become a world-class city. It has unbelievable gifts compared to so many urban areas on the world. The fact that its unemployment rate and average incomes are worse than average should be simply unacceptable. There is an amazing level of creative, entrepreneurial energy in the community that needs to be given full vent now. And city and economic development types need to figure out how to lead, follow or get out of the way! Maybe it is just a factor of our population and we are fighting an uphill battle, but in the final equation, Portland pales when compared to the type of mentors and talent we can offer to new ideas. At the core there is little or no infrastructure for young CEO's on really any level...and I do not see that changing anytime soon unless a leader steps up and creates a vision and a plan for change. Thank you for taking the time to conduct this survey. I would encourage the researchers to DEFINE the meaning of entrepreneurship in order to have participants in this survey stand on the same contextual ground. Entrepreneurship means many things to many people. As we study a subject, understanding the context from which our "lens" is set is very important. What is the picture you are trying to paint? What is the outcome you are trying to achieve? What is the story you are trying to tell? If we know how you define entrepreneurship, then the picture will come into a clearer view. Portland is such a great place to live that I overlook some of the very real costs of doing business here. This benefit will bring a few zealots like me to the market, but it won't scale to bring the breadth of entrepreneurs required to really make this a vibrant business center in the future without major reform. We need a blueprint for a sustainable economy (including a definition of Portland's world class advantages) and market this while building services and collaboration around it. I'd recommend gathering thought leaders in the area of entrepreneurship that include angel investors, successful entrepreneurs, other members of the ecosystem to help develop a roadmap for Portland that will result in being recognized as a hotbed of entrepreneurial activity! This should be supported by the State of Oregon. To attract/retain entrepreneurs and new businesses, the best thing Portland can do is focus on the basics - good schools, public safety, parks & recreation, smart tax/regulatory environment, public transit. If Portland does a good job of this, talented entrepreneurs and angel investors will want to work and live here. Open Responses: Anything else related to PDX entrepreneurship? See appendix B. Additional questions included for Expert survey version only; How do you feel the Oregon research institutions are doing creating local companies from intellectual property developed through research?

A good job given the environment in which they operate. My partners and I have spun over 25 companies out of Oregon universities. No local investors currently have the ability, capital or interest in raw startups from the academy. Hard to create startups under these conditions. not attuned to the academic world, but it does not seem like Oregon is an academic research hotbed (other than a few exceptions such as OHSU) I have no idea, and would have to guess. That must tell you something. Not very well. Still hard to make the leap from "cool technology" to "so who cares and what problem does it solve and

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State of Entrepreneurship In Portland April 30, 2011 how much will people pay to solve that problem"? They've improved in terms of tech transfer and creating businesses out of research, but we have a long way to go, to catch up with universities such as U of Washington, or Stanford. OK - could be better. Need funding and attitude of entrepreneurship as well as some successes. Average. I hear about some spinouts from time to time but know of no star companies that were formed via IP from institutional research. If it is not green energy or bio-tech...Oregon falls way behind which is a shame due to the intellectual capital we have in consumer goods. The leaders of these companies do not seem to care about fostering the next generation. Go to Seattle and there are ex-Microsoft people everywhere creating new ideas...no Nike people do that here. Tragic. I cannot pinpoint any company that has resulted from institutional research. My perception is there has been very limited success in forming businesses from research IP. That may be more due to an absence of PR on these local companies than a lack of successes. But I think it's more the latter. It's not apparent to me that we have a well-developed commercialization infrastructure for original research It is a work in progress. There is increasing focus with encouraging results. better than in the past, but a long way to go I have seen little in my field. Not well. There is both a general lack of understanding of what is required to take research to commercialization, and a lack of interest many times in doing so. Oregon researchers, unlike their counterparts in other states, do not tend to view starting a company as desirable - and do not know the steps needed to make it happen. Terrible. Great ideas. Practical? Implement? reasonably well Poorly - R&D at OUS schools is weak compared to other states. Schools with significant R&D - OSU and OHSU - do not have robust commercialization arms and do not have significant startup activity as a result. Poor. I can't name one. Biotech is supposed to be happening, but where is it? I'm not really equipped to answer this. Don't think research institutions should "create companies," but do think local researchers and faculty could focus more on working with and addressing the needs of local business. Poor

Where do you think the biggest funding gap exists in providing capital to entrepreneurial Oregon companies, and how would this best be addressed?

Across the entire spectrum from seed stage through expansion. The state's prior attempts to deal with this - OGA, OIC, etc have failed because they have been poorly structured and poorly managed. Public school funding and performance - poor schools make it hard to recruit here. I hear from small business people banks are not loaning money for expansion, inventory, or equipment. Everyone with a line of credit is fearing the banks will start cutting it off as you pay it down.( and I have heard this is happening) Short term money is important for companies to meet payroll, and taxes. We need low interest short term money. Follow-on financing (usually described as Series B level). Set high standards for performance - and then execute to plan. The money will follow. Creating direct connections between entrepreneurs and lenders/equity financing/angels though symposiums in addition to the great work conducted by OEN. The biggest funding gap is for seed/concept stage companies who need less than $100K. As OAF has moved upstream, along with the early-stage venture firms, those seed stage companies have fewer options. A fund focused on that very early stage is critical. OEN is about to launch such a fund. Seed capital and angel/early stage venture capital I think the gap is more in debt than equity. Not many businesses or startup owners seem interested in or capable of taking on venture or angel capital. Most want or need bank financing to help establish or grow their business. I would love to see a Bank of Oregon formed with the express purpose of lending to small businesses. The pool of early stage dollars is the place that needs the most help. OEN, PAN and OAF are not enough or there are not

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State of Entrepreneurship In Portland April 30, 2011 enough dollars at work inside these groups. Seed capital seems difficult to obtain in Portland. Not sure how to address this to be honest, and I'm not sure it is an issue limited to Portland. Small business owners either as start-up or growing stage business usually don't seek equity financing, but rather traditional debt financing from banks or other sources. Freeing up access to capital will dramatically impact the ability of small business owners to grow healthy business; creating jobs, increasing sales, and creating economic impact. Early stage investing due to inexperienced entrepreneurs not making connections or understanding how to interact with seed and angel investors. While VC funds are limited in Oregon, a minority of entrepreneurs is looking to build venture-backed businesses. More want & need conventional debt financing for ongoing growth or seed funds to get started. The gap I see is making access to debt capital easier & more affordable. The state of Oregon should create & back a small biz lending venture. Two places: organized angel funding for "seed round" investments, and growth round (B,C) venture capital Two solutions: actively organize local angels into investment groups, and recruit established VC firms to put local resources in place True, early stage venture capital. The ability to provide promising early stage companies with sufficient capital to commercialize their idea. This includes credible enough capital that can attract capital from outside the state. Increased lending through banking institutions and/or PDC Early stage venture funding. The State needs to take a lead role. Start up: pre-revenue to $3MM in revenue. Portland Angel groups need to learn from their counterparts in other cities which are more sophisticated, have more process and actually fund companies. There is a gap between university research and companies ready for real institutional funding. A similar program to the Accelerator Corp in Seattle would be helpful - but finding the right team to run it and keeping it as focused as Accelerator will be hard. There is a gap for initial angel capital that a drop in the capital gains tax might help. We need to promote other industries besides tech and software. Both angel and venture capital The pool of investment capital is limited across the entire spectrum but I think the real funding gap exists at the Series B stage - promising companies with real growth prospects are seriously constrained by the limited investment capital at this stage. Angel investors are needed but aren't savvy in town. And they don't understand my business model (SaaS, freemium). Smaller start ups 1. For those "non traditional" start-ups in retail, service industries, restaurants. 2. For early stage companies that are more appealing to angel investors but that are beyond family/friends funding yet not quite ready for OAF. 3. Asset purchases. Better funding options for small business. No funding gap. Talented, driven entrepreneurs do get funded. The paucity of recent exits has resulted in less wealth that can be reinvested locally. Pure startups should be funded by family/friends. Pivotal, OAF, and angels are funding investment-ready businesses. Out of area VCs are actively funding the good teams in Portland. The capital providers know nothing about branded consumer business. They only know technology and are willing to bet very large on it.

What types of companies/industries do you think are best suited to the environment, workforce, availability of capital and competencies in Portland?

Portland was blessed with one of the most balanced, manufacturing focused economies in the country, consequently all the ingredients are there for just about any kind of business. All.

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State of Entrepreneurship In Portland April 30, 2011 Design, engineering, manufacturing for solar, green type industries Growing food, small farms Natural Health care and fitness Clothing design, and manufacturing, have a creative work force Advertising and marketing Music industry Movie industry software, bio-informatics, clean tech, sports apparel Artisan, Service, Manufacturing, Construction, Agri-business, Self-employed, all sectors Green energy, Clean energy tech Software, mobile apps, active wear, shoes, web design, internet security, social networks Tech, software and creative. With Knight Center at OHSU we will see more there as well. Software, social media, environmental, outdoor, sustainable mftg, food and beverage, high tech, energy, "counter culture", alternative transportation, sustainable development services CONSUMER GOODS! Apparel, high-tech (semiconductor), and "mid-tech" (web apps, web sites, etc.) Alternative energy companies, green/clean energy tech, creative enterprises, manufacturing, professional services, software development, food product manufacturers, social enterprises, web-based companies, traded sector and international trade bound companies (all sectors). Mobile application and infrastructure, Web application and infrastructure, Open Source development Technology, software, natural resource management and conservation, apparel, education, food, small-scale or artisanal manufacturing Software Sustainable design & other creative service firms software/internet other firms that don't require local customer bases (eg global market access) Clean Tech Energy Efficiency Biotech Software Software, sportswear/fitness, sustainable industries, creative services Until there is better access to capital the companies need to be capital efficient. Software is an ideal target industry. Brand driven companies. Performance textile companies. software, clean tech, bio-informatics, micro-fluidics & nanotechnology Healthcare, (tV,media and film), Software, design, and apparel companies that require minimal start-up capital. Apparel companies must rely on outsourced production to succeed here. Knowledge workers. Consumer products We have some momentum around technology and apparel but that shouldn't limit what we try to develop in terms of more entrepreneurial activity. Sports apparel/footwear companies, technology, green initiatives, alternative energy Footwear & apparel Specialty (hi-margin) food & beverage Lifestyle of health & sustainability semiconductor & electronics related display & imaging & image processing Internet related healthcare IT

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State of Entrepreneurship In Portland April 30, 2011 Our strength appears to be in the apparel space, with restaurants and "creative" close behind.

Who are the three people or organizations in Portland that you think of as the go to people in promoting entrepreneurship and launching new businesses here? (Text box provided for answer)

Nedspace / Starveups Rob Wiltbank Brock Metcalf OEN, Business Journal, SBA I don't know any other support system. I can't think of anyone who cares if I stay in business or not. OEN, Oregon Angel Fund, OVP Venture Partners Small Business Development Center CLIMB Center, PCC, PBA, OMEN OEN, StarveUps, SAO. I'd add the Oregon Bioscience Assn. too. OEN, Portland 10, successful entrepreneurs (like Paul Gulick, Josh Friedman, etc.) I can't think of any "go to" types. That's a problem in the city. No real reliable source. OEN for coaching and feedback. OEN, SAO Small Business Development Center CLIMB Center Portland Community College OEN PSU Accelerator Scott Kveton, Josh Friedman, Carolynn Duncan OEN. After that, no real go-to's -- only influencers. Angel Oregon OEN OEN and SAO, although I don't think either can adequately address the root issues that need real reform - local government needs to be committed to both improving the environment for entrepreneurs and recruiting the types of firms required to build the necessary fabric for success Pivotal Investments OEN Oregon Angel Fund OEN Nedspace We need more! Angela Jackson Dave Chen Gun Denhart OEN OEN, Oregon Angel Fund, PDC could be if it got off the apparent position that unless you are talking bricks & mortar you aren't very interesting. Ed Maletis, John Emmerick, Frank Dulcich, Rick Miller OEN, OAF, PAN Carolynn Duncan - Portland Ten Brent Bullock - Perkin Coie Josh Friedman - NedSpace NOT Oregon Entrepreneurs Network or Software Association of Oregon. They're simply social groups. 1) StarveUps 2) John Friess 3) Mark Grimes OEN

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State of Entrepreneurship In Portland April 30, 2011 Angel Oregon SBA, SCORE, PDC OEN OAF/Capybara Rob Wiltbank If Portland were to sell itself to entrepreneurs from around the US or the world as a location for them to start or expand a small or new business, what would we highlight to them? (Text box provided for answer)

? Access to skilled workforce / ability to recruit people to Portland from other locations is better than many other places in the US due to quality of life here. Creative, and educated work force Affordable housing Vacant properties for rent or sale Low cost electricity, some good parcels of land for development still available within the city, young educated work force. The City of Portland embraces the entrepreneurial spirit and understands how to be a "small business city". Small business owners support each other, and have access to outstanding small business education and advising within the City of Portland through the SBDC, OMEN, APNBA, PBA, OEN, MIPO, and the local Chambers. It's much cheaper to start a business here than Silicon Valley.Approachable, collaborative entrepreneurial community means there's great opportunity to build a network to coach and mentor companies. Pdx is becoming more businessfriendly---Portland Seed Fund, the assistance to young companies, etc. vibrant software and consumer goods sectors. Relatively inexpensive place to live. Well educated workforce. Community attitude. Young, educated workforce; progressive-thinking community for forward-thinking businesses; quality of life; beautiful environment; family friendly; willingness to think and be different; not stuck in the past; not constrained by convention; able to imagine a different future and create it We are not able to do this today in my opinion. Previous successes, cost of living and quality of life. The spirit of city is entrepreneurial. Portland is ranked #6 by Forbes for business climate, access to economic development organizations such as the SBDC for entrepreneurship education and advising. Creativity, passion, quality of life - Reliable, smart, creative workforce - One of America's most livable cities - A magnet for educated young adults - A hotbed for sustainability and all things green - Progressive, forward-thinking, civic-minded citizens The young culture, leading "green" lifestyle city, strong businesses like Nike, Intel and others being here along with strong networks of Angel Investors. Creative talent base, green/sustainable orientation, lifestyle, airport access to major markets Portland is working to solve fundamental challenges in human infrastructure/sustainability in urban environments. This includes innovation in resource productivity including urban infrastructure: energy, transportation, land use, green buildings, water, etc. Sustainability Worklife Collaboration Innovative ideas Talent pool increasing because people want to move here Lower cost of start-up and good technical labor force Affordability, large pool of creative, sustainability minded people to draw from. Existing infrastructure of similar firms and/or technologies and the available talent that implies. Quality of life for employees that means high retention.

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State of Entrepreneurship In Portland April 30, 2011 Low cost electric power Money, location, people Young, vibrant, risk oriented demographic. Supportive business and service provider community. High degree of non profit volunteers and activity, and support groups. Aggressive attempts to increase capital availability. Strong entrepreneurial community - ethic of cooperation and helping each other. Open culture that respects out of the box thinking Access to deep talent pool in industries like active wear, clean technology and software/technology. Lifestyle Lower cost of living Supportive StartUp Community A cluster of other small business sounded by a strong city infrastructure -Growing ecosystem of support for entrepreneurs -Lifestyle -Different forms of capital available -Success stories that have emerged from the greater PDX area Technology driven, active outdoor community, diverse geography, green minded OEN - strong entrepreneurial support community Quality of life - vibrant urban core, open space, charming neighborhoods, public transit, progressive ethos World class people in specific industry sectors. Success stories...know any?

Capital
One of the most frequently discussed issues in the interviews and surveys was financial capital to fund the start-up and growth of entrepreneurial firms. On the one hand there is a group that feels strongly that there is a lack of start-up capital and it is a major barrier while on the other hand another group insists that there is adequate money available to fund investor ready start-ups and young companies. In this section we explore this issue in some depth. Access to capital is often noted as a key component of the ecosystem for entrepreneurial activity, and a driver of entrepreneurial growth and success. While capital of some sort is certainly an important component for many businesses, it is also important to understand how often outside capital is used and where it typically comes from. Less than 3% of start-ups receive outside capital. In the Survey of Business Owners, the Census Bureaus compilation of feedback from nearly 17,000 businesses in the US, 63.6% of business owners stated that they utilized their own savings or personal assets to start or buy their firm. Another 27.7% stated that no capital was required to start their firm, while only 2.7% indicated that they had taken funds from an outside investor of any kind (business angel, friends, venture capital firms). Other sources of capital include bank loans, credit cards and government guaranteed loans. Interestingly, when looking only at employer firms (those employing one or more workers, beyond the founders/owners) the percentage of those investing their own funds or borrowing against their own assets goes up to 77.3%, while the percentage raising outside investment also goes up somewhat to 4.7% of firms.

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State of Entrepreneurship In Portland April 30, 2011

For those young companies that do take in funding, nearly 90% comes from the entrepreneurs or their friends and family. The data shown in Figure 4 are reported by Scott Shane and show the source of a total investment of $310 billion in young companies in 2004. xv FIGURE 4, Sources of Capital for U.S. Start-Ups

Angel, 4% Venture Capital , 7%

Friends and Family, 45%

Entrepreneurs, 44%

Looking more specifically at high growth firms, based upon a study conducted in 2005 of the Inc. 500, companies characterized as the fastest growing firms in the U.S., a large majority (70%) financed their launch with the founders personal savings or assets. Only 4% got their start up capital from a private equity source, including venture capital. Eight percent of these companies also utilized bank loans as a component of their startup capital. Theres no linear or automatic connection between venture capital, business success, and job creation. As a rule of thumb in venture capital investing, half of all ventures fail outright or lose money, another thirty or forty percent lose money or just break even, and only 10 to 20 percent of venture capital deals turn out to be clearly profitable. And of those, a few home runs wildly successful companies like Google produce a disproportionate share of the profits. So out of 3,000 to 4,000 venture capital investments made every year, only a handful are likely to be the big job creators everyone would like to have.

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State of Entrepreneurship In Portland April 30, 2011

Venture capital backed job creation in Portland. Analyzing the impact of venture capital on employment in the region we find it has not been a primary driver of jobs or firm growth in Portland. Overall venture capital funded firms have directly added approximately 5,000 jobs, net, to the Portland metropolitan economy over the past 15 years. Over this time period, 189 Oregon based businesses obtained venture capital financing according to PWC Money Tree.xvi About 25 of these companies were located outside the Portland MSA or could not be identified from the data provided. Of the remaining 164, about 70% were still in operation, 21% had been acquired, and 7% had failed as of 2010. Of the 118 firms continuing in operation, we were able to match 68 (58%) to the Oregon Employment Department employment records (known as the ES-202 database). These firms employed about 4,100 people in 2009. The 50 firms we couldn't match to ES-202 were likely generally smaller (may not be required to file) and also represent firms who may have alternate corporate identities that don't match to the VC backed company names. Venture capital funding is one indicator of entrepreneurial activity. Venture capital is particularly important in a handful of industries, and for firms with strong intellectual property and very high growth prospects. As a result, it is important to keep in perspective that attracting venture capital is a good thing, but not a panacea. Healthy entrepreneurial activity goes well beyond the efforts of new ventures to attract venture investment. One indication Portland is becoming more entrepreneurial is the increase in venture capital amount and number of deals we have seen in 2010 as reported in the Portland Business Journal, The Oregonian, and The Columbian (see Figure 5). VC investment should be viewed as a lagging indicator of improving entrepreneurial climates, the work and improvement now leads to venture investment (among other types of resource investments) later. Part of our intention with this report is to identify and consider how the entrepreneurial community can continue to make intelligent moves now, to continue to attract entrepreneurial resources like talent and venture capital in the future. Without question, a few regions have attracted huge amounts of venture capital. The San Francisco Bay area and metropolitan Boston historically account for around 60% of all of the venture capital invested in the entire United States. In the first three quarters of 2010, these two regions accounted for $8.4 billion of the $16.7 billion of venture capital invested in the U.S. Outside of those areas, there are a few additional regions that attract significant venture capital money. Portland is not one of those other areas, but as noted in Table 1 above, it is in the middle of the pack of other major metro areas, typically attracting between $100-200M in venture capital per year or one percent of the national total (PWC Moneytree).

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State of Entrepreneurship In Portland April 30, 2011

FIGURE 5: Portland MSA/City VC Investment by Year from 2005-2010

Portland (2005-2010)
350

300
250 200 (In Millions of Dollars) 150 100 50 0 2005 2006 2007 2008 2009 2010 City MSA

Oregons share of venture capital investment has fluctuated between about .5 1 % of the national total, with nearly all of that invested in the Portland metro. While strong 2010 activity will place the State, and the Portland metro at the high end of that range, it is important to note that Portland and Oregon are not substantial players in several of the key areas of recent investment by the venture capital community. Over the past 5 years, biotechnology, for instance, has been in the top 3 industry categories for venture capital investment nationally. Because venture capital funding is concentrated in some industries, regions are only likely to be competitive for venture capital if they have strength in those industries that get venture capital funding. Currently, nearly 20 percent of all venture capital funding goes to biotechnology (PWC Moneytree, 2010), an industry in which Portland has a relatively low activity. In contrast, in other industries in which Portland is strong, such as athletic and outdoor gear and apparel, venture capital plays a minor role. Consequently, Portlands portfolio of industry specializations may somewhat limit growth in venture capital investment. TABLE 2: Largest Areas of US Venture Capital Investment 2010
Q3 Deals 190 108 82 64 59

Software Biotechnology Medical Devices and Equipment Information Technology Services Industrial/Energy

% age 20.79% 19.58% 11.88% 9.40% 9.14%

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State of Entrepreneurship In Portland April 30, 2011

The Portland metro areas approximately 5,000 jobs in the medical device field are represented mainly by local manufacturing operations of large multinational companies (Tyco Electronics, Biotronik) and the home grown Newberg-based A-Dec dental supply company and therefore not likely to be in need of venture capital. Similarly, the State and metro areas participation in the Information technology services category has come largely from locally based bootstrapped firms (Easystreet Online Services) or operations of large firms based outside of Oregon, attracted here for the inexpensive and reliable power and water for data centers, such as Google and Facebook. Indeed, the areas in which the Portland metro has emerged as a leader (athletic & outdoor) or has a strong historical position (semiconductors) represent small or declining areas of venture capital activity. Consumer goods, the category into which most athletic & outdoor firms fall, represent less than 2% of all venture capital investment over the past 5 years. As the semiconductor industry has become more mature, the market more dominated by large players, and the margins have deteriorated, the category has commanded less and less venture capital activity, now attracting less than 5% of funds nationally. In fact, Portland MSA based Ambric is an unfortunate example of a local Silicon Forest firm, which had attracted about $40 million in venture capital, but was unable to find additional capital with which to continue its development of a fab-less semiconductor manufacturing process. Therefore, our potential for participation in the venture capital arena is likely strongest in the software area in which we have seen greater traction over the past 2 years. Notably, this activity has also marked a shift in the venture capital investment occurring to within the City of Portland. While it is too soon to say whether this is an ongoing trend, it does mean that whatever employment growth is occurring as a result of this investment activity is occurring in Portland. Some of the interviewees suggested a need for additional venture capital in Portland, but most also noted the positive trends in this regard. Further, several of the venture capital firm principals we spoke with pointed out the caliber and amount of venture capital investment coming from outside the area, particularly the San Francisco Bay area. Venerable firms such as Kleiner, Perkins, Sequoia and CMEA Capital have made substantial investments in the Portland area over the past two years, in deals often led by a local of Pacific Northwest-based firm. The interviewees we talked with stressed this as the model of investment capital attraction that should be further cultivated, noting that only a few Seattlebased funds have substantial assets at a level that would be able to support the expansion capital required to grow a venture. While many of the interviewees and survey respondents who identified themselves as an entrepreneurs reported in general that a lack of capital was a constraint, only a small percentage identified the lack of venture capital availability as a significant constraint to their ability to grow their company. Several reported that those people and companies truly VC investor ready are able to obtain funding, however in many cases it is from outside the area. Relative to Portlands comparison cities the amount of early stage and growth venture capital investment, particularly excluding San Francisco, appears reasonable, and will continue to be driven by the existence of exciting investment opportunities in Portland. Indeed, some of those spoken to pointed 37

State of Entrepreneurship In Portland April 30, 2011

to the amount of venture capital investment being seen as a lagging indicator of entrepreneurial growth, with investment occurring in recognition of the successful integration of human capital, interesting and sustainable business strategies and appropriate partnerships to address the market opportunity. Angel investing in Portland. One of the most interesting findings of our study was the divergent views we encountered on the question of whether there is enough angel capital available in Portland. Many entrepreneurs feel there is not enough money being invested while other people (mostly investors) we talked with and heard from said there arent enough good start-ups to invest in. There is evidence to suggest, at certain levels and for certain types of deals, capital is available but is not getting invested (e.g. the Oregon Angel Fund needing to return capital). Understanding this incongruence makes sense when thought of in the context of Angel Oregon. This process starts with word going out calling to all entrepreneurs that are looking for either $200,000 or $25,000 to apply (two different pools to apply for). This year approximately 25 entrepreneurs applied for the $200,000 investment and a dozen or so the $25,000. Over the course of a couple of months the group of start-ups applying for the $200k is pared down to six finalists. Most of the individuals in the investor group would say that the companies not included as finalists were not investor ready, yet most of the entrepreneurs leading these companies would say they are investor ready and feel strongly that Portland has a dearth of Angel capital. Its almost always the case that entrepreneurs have a much higher estimate of the quality of their business plan, management and prospects for growth and profitability than do the investors that might fund them. Even when an investor agrees that an idea has potential and might be profitable, there can be big disagreements over how much to value a company, i.e. how much the investor must contribute for what share of the company. Investors are generally looking to maximize the return on their investment, and many startup companies are unwilling to part with ownership or control of their companies in exchange for what they view as too low a price. Working to address this knowledge gap will result in better understanding by entrepreneurs on why they are viewed as not investor ready and what they should do to get there. It also could help to educate other potential angel investors on what angel investing is all about. Lastly, is should be kept in mind that Portland entrepreneurs are not unique in thinking there isnt enough investment capital available to fund their start-up ideas, this is also the number one complaint of entrepreneurs in the Silicon Valley.

S.W.O.T. Summary
Throughout this report we have highlighted the strengths and weaknesses of the entrepreneurship environment in Portland as well as identified opportunities where it might be strengthened. Below we summarize this analysis. Strengths Portland does comparably well in starting businesses and having a large stock of small businesses that leads to jobs 38

State of Entrepreneurship In Portland April 30, 2011

Strength in several of the targeted traded sector clusters; especially outdoor & active wear, clean technology, and software Portlands quality of life, moderate cost of living and reputation as a great place to live attracts educated, young people People in the entrepreneurship community are passionate about improving it

Interview quotes (also shown after other bullet points in S.W.O.T): Portland is an awesome community waiting to become a world-class city. It has unbelievable gifts compared to so many urban areas on the world. The fact that its unemployment rate and average incomes are worse than average should be simply unacceptable. There is an amazing level of creative, entrepreneurial energy in the community that needs to be given full vent now. And city and economic development types need to figure out how to lead, follow or get out of the way! Portland serial entrepreneur Portland is a relatively inexpensive place to live, has a well educated workforce, and a great community attitude. Major service provider to entrepreneurial companies Portland is the only major city on the West Coast where I can send my kids to public schools. VC backed technology CEO According to our analysis of Oregon Employment Department data, the 18,600 firms established in the Portland Metropolitan Statistical Area (MSA) since 2004 accounted for 154,000, or 18.4%, of the regions 837,000 private sector jobs in 2009. xvii Portland has a substantial ecosystem of networking organizations, training and development programs, angel capital groups and events, and grants, loans and programs from which to secure seed funding (see entrepreneurship ecosystem maps). The Citys recent launch of the Portland Seed Fund will further add to this ecosystem, offering small amounts of funding to firms that look promising to raise additional capital, once their products or services have been validated. The recession and the recovery will be dictated by national and global changes. However we will be better positioned for a more robust recovery with a strong ecosystem for entrepreneurship as economic activity ramps up. Weaknesses Portland doesnt have tier one university Small number of liquid successful entrepreneurs and angels. Much of wealth that is here not closely connected to targeted industry clusters Poor K thru post secondary education, in comparison with other cities and other countries I hear about some spinouts from time to time but know of no star companies that were formed via IP from institutional research. Portland entrepreneurial executive on state of tech transfer in Oregon 39

State of Entrepreneurship In Portland April 30, 2011

Technology commercialization from Portlands research universities has played only a small part in the creation of firms and employment in the area. Although both OHSU and PSU have placed more focus on commercialization over the past several years, these efforts have not yet begun to bear much fruit in terms of direct contribution to the local economy through the creation of new companies employing many workers. There are many factors that affect success in commercialization of research technologies, including the type and amount of research funding, quality and expertise of researchers, and availability of seed stage funding to launch spin out ventures of bench level technologies. Further, the culture of an institution, along with policies and processes for commercialization bears heavily on outcomes in this area Although Portlands institutions do not have very strong results for commercialization activities, based on research by the Association of University Technology Managers and the Kauffman Foundation, this is true for all but about the top 25 institutions in the US. Further, this research supports the best results occurring at institutions with strong medical research programs, and which are generally located in areas with very strong cultures and ecosystems of high technology and bio-science entrepreneurship (San Francisco Bay Area, Boston.) Indeed, a 2005 study (OShea) found that the average number of spin outs for US universities was only 1.9 per year. Yet, the outliers created significantly more; 31 for MIT in the year on which the study data was based, with an average of more than 19 annually. Similarly, a 2008 study (Breznitz) traced the development of Yales entrepreneurial culture as the key driver to the ultimate growth of that universitys spin outs to 30 annually, with at least 65% of those locating in the New Haven, Connecticut area. Yales research funding throughout that period was roughly the same as OHSU & PSUs combined. It is also notable that the University of Washington is consistently ranked by AUTM as one of the top 25 (in terms of spin out creation) technology transfer programs in the US. Accordingly, everything that can be done to foster greater numbers of invention disclosures, licenses and spin outs, as well as a gradual shift in creating a culture of entrepreneurship at OHSU and PSU (and the States other research universities, who have in the past three years been contributors of several technologies leading to many of the Portland area spin outs) should certainly be encouraged, but it would not appear to be a source of significant firm formation or job creation for Portland in the near term. Opportunities Proximity to Silicon Valley and Seattle leverage these entrepreneurial areas Lifestyle people want to come here Build on strengths in our expertise in valuable resources/apparel/software/food Tax and business regulatory environment is not as bad as people think Funding situation and lack of talent also not as bad as many perceive Leverage the large number of companies that have started here by growing them Motivate, engage, and educate the young talent in PDX on starting, funding and growing companies

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State of Entrepreneurship In Portland April 30, 2011

Measures 66 and 67 create a perception of business unfriendliness, regardless of how we really stack up to other places. VC-backed company executive It took me a long time to learn how to market my firm on a national basis; it would be good to have programs to help companies find successful ways to access bigger markets outside of Portland if that is what is needed to reach a critical mass or optimal size / profitability. Portland entrepreneur doing business nationally The C level issue is BS. There are plenty of good people here. The obstacle is that most do not have a VC track record. VC backed company CEO Threats Weak education from K-12 through higher ed is not only a weakness, but also a threat to future prosperity Perceptions trump reality (not enough executive talent here, other cities are doing great things to support entrepreneurship and Portland isnt, there is a lack of investment capital, people dont work as hard here, more negative tax and regulatory environment that elsewhere, etc) The Creative Class exists in Portland in large numbers and is growing. But, if people cannot get a good education for their children, they will not stay. Government official While the perception that Portlanders dont care to work hard is widely promoted through articles in the local news media as well as national entertainment programs, our interview and survey results find this not to be a serious concern of most people most involved in starting and growing companies. The Oregonian ran a story on November, 28, 2010 posing the question of whether or not Portland is The New Neverland? The people interviewed for the article are young and educated and generally espouse the idea that Portland does have a laid back vibe and can be a frustrating place for those interested in driving hard to build high growth businesses. Then in January we saw the initial season of a six part original comedy series Portlandia premiered. This series, created, written by and starring Fred Armisen and Carrie Brownstein, spoofs Portland through the development of a range of absurd characters that make Portland out to be a unique place where young people go to retire. The series has been successful and was recently renewed for a second season. So the perception is out there, but according to our interview and survey responses, its not taken as a serious concern by most people. The acrimonious public debate over Measures 66 and 67 have amplified concerns that Portland has an anti-business climate. Some of the arguments used to favor these measures vilified businesses. This has had an unquestionably negative effect on perceptions of Portland and Oregon as places to do business. Despite this problem, objective measures suggest that the states business tax burden is modest when compared to other states. Oregon has no sales tax; and these taxes are paid by businesses in other states. So even with city and county business taxes, the overall burden is still less than most other cities 41

State of Entrepreneurship In Portland April 30, 2011

in the country. We also found taxes to be an issue raised by more established firms rather than viewed as a barrier by an entrepreneur starting a new venture. Joseph Bartlett noted in an article appearing in the 2006 article in the Entrepreneurial Business Law Journal The venture hot spotsMassachusetts, California, and New Yorkimpose relatively high tax rates on income and gains. The negative of having city and county taxes are offset by not having the sales tax. One challenge for locating a business in Portland however is having high taxes in comparison with nearby cities, counties, and even states.

Index of Entrepreneurship Indicators


As an ongoing means to assess entrepreneurship in Portland we have selected a set of measures that together provide an indication of how vibrant Portland is in the context of fostering entrepreneurship. As noted early in this report, in order to have a significant and positive impact on the regional economy two factors are critical. The eco-system should lead to the birth of a large number of new companies (most of which will fail) and support the rapid development of the most promising to grow into large companies with significant employment. The two keys to high economic value are to generate a lot of start-ups and improve the percentage of firms that avoid death and grow rapidly. Doing well on the measures in this index relative to national averages and to our comparison cities indicates Portland is entrepreneurial. A city has a strong entrepreneurial eco-system if it has many small firms, a good Kauffman entrepreneurial activity score, a well educated workforce, attracts young and educated people, has venture capital funding activity and a large number of wealthy people, investors reporting they have capital to invest, universities spinning out new companies and innovators receiving patents. This index will allow us to track how the entrepreneurial eco-system changes over time and to compare how we are doing relative to the other cities identified as the comparison group in this report. The measures have been developed in each of four areas: Core Entrepreneurship; Workforce; Funding; and Commercialization. The index will be published regularly as part of an update to this State of Entrepreneurship in Portland report issued by the University of Portland Center for Entrepreneurship in conjunction with the Portland Development Commission. Core Entrepreneurship Measures 1. Small firms per capita: Number of firms with fewer than 20 employees per 1,000 population This measure is included as an indicator of employment growth. Data source: Census Bureau, County Business Patterns 2. Kauffman Entrepreneurship Index by state 42

State of Entrepreneurship In Portland April 30, 2011

This measure is included as an indicator of entrepreneurial activity. It is only available at the state level. Data source: Kauffman Foundation Workforce Measures 3. College Attainment This measure is included as an indicator of a positive driver on average per capita income. College attainment is all persons aged 25 and older who have completed a four-year college degree or higher level of education. Data source: Census Bureau, American Community Survey, 4. Net Migration of College Educated This measure is included as an indicator that Portland is an attractive destination for educated young people needed to fuel entrepreneurial growth. Data source: Census Bureau, American Community Survey Funding Measures 5. Venture Capital Investment per capita This measure is included as an indicator of the supply of growth companies attractive to venture capital as well as the supply of capital. Data source: PriceWaterhouseCoopers/Moneytree 6. Millionaire Households as a percent of all households by state This measure is included as an indicator of the potential supply of angel investors. Data source: US Census and Federal Reserve Bank 7. Portland VC/Angel Investor Activity Survey This short survey will be administered annually to the population of PDX MSA angel investors and venture capitalists. It is included in the index as an indicator of the availability of seed and early stage capital for start-up and young companies. Data source: University of Portland Center for Entrepreneurship Technology Commercialization 8. University Spin Outs This measure is included as an indicator how well university research is fueling entrepreneurial growth in the region. Data source: Association of University Technology Managers (AUTM) 9. Patents per Capita This measure is included as an indicator of innovation happening in the region Data source: United Stated Patent and Trademark Office (USPTO) 43

State of Entrepreneurship In Portland April 30, 2011

Table 3 below shows the values for the measures in the scorecard. As can be seen, Portland (and the state) does reasonably well on many of the measures in comparison to the national averages. However the comparison cities also do very well on many of the measures, with the exception of Cincinnati which not surprisingly would be viewed as the least entrepreneurial city in the group. We look forward to refining this scorecard and index in the near future and developing it into a valuable tool for Portland and the state. Table 3, Scorecard of Entrepreneurship Indicators
Core Entrepreneurship Indicators Workforce Indicators Funding Indicators Kauffman Index Net Small Firms of Migration Venture PDX per 1000 Entrepreneurial College rate per Capital Millionaire Investor population Activity Attainment 1000 Investment households Survey Geography Austin Cincinnati Denver Minneapolis Portland San Francisco Seattle Top 50 City Mean MSA 2008 21.1 18.9 26.7 24.8 25.7 24.8 26.4 22.0 State 2010 0.40% 0.30% 0.45% 0.21% 0.32% 0.47% 0.24% 0.34% MSA 2008 38.2% 28.1% 37.5% 37.6% 33.3% 43.4% 36.4% 29.9% State 2000 48.7 -88.2 157.7 15.5 103.5 92.7 96.5 0.0 $ $ $ $ $ $ $ $ MSA 2009 213 16 169 141 69 2,473 22 44 State 2008 4.72% 4.90% 5.72% 5.70% 4.88% 5.78% 5.38% 5.25% NA 2011 NA NA NA NA tba NA NA Technology Commercialization 2008 Patents University Issued per Spinouts 100k MSA 2009 10 1 11 1 4 15 9 MSA 2008 67.7 62.0 104.8 122.4 149.2 161.5 127.0

Note due to extreme values the venture capital investment national comparison shows the median value rather than the mean.

Conclusion
The State of Entrepreneurship in Portland, Oregon addresses why entrepreneurship matters to Portland, how Portland is doing generating entrepreneurship, and what might be done to stimulate even more entrepreneurial activity. The evidence we have found in this effort leads us to two broad points: that entrepreneurship is important to the economic health of Portland and that Portland is an entrepreneurial city. However, some of this entrepreneurial activity is in smaller firms which seem to lack the desire, competencies or resources to scale. Further, some sectors of this entrepreneurial growth are not necessarily associated with the attraction of venture capital, fast growth, extensive scalability or high wage jobs. Therefore, in order to increase the economic impact of entrepreneurship in Portland emphasis should be placed on creating a climate that encourages firms to grow and facilitates the growth in resources needed for these firms to thrive.

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State of Entrepreneurship In Portland April 30, 2011

Appendices
Appendix A: Interview protocol
STRUCTURED INTERVIEW QUESTIONS OPENING INTRO (5 minutes) INTERVIEWEE BACKGROUND (2 minutes) PORTLAND STATE OF ENTREPRENEURSHIP SWOT (30 minutes) We are working to identify strengths and weaknesses for Portland in regards to entrepreneurship from many different perspectives. How would you characterize those? Why? Strengths: Weaknesses:

Please describe what you view as the opportunities and threats facing Portland when it comes to entrepreneurship. Opportunities: Threats:

If time allows, following the SWOT analysis skim the list below and ask the interviewee to comment on any of these as strengths or weaknesses if they havent yet done so in their previous comments, and are likely to have input. Access to start up and/or growth capital PDX venture capital PDX angels Supply of experienced C level talent Portlanders work ethic Corporate and university R&D spending Business tax and regulatory environment Corporate spin-outs Cost of starting a company in PDX Value of the creative workers in PDX Opportunities for investment Service providers Quality of entrepreneurship support organizations State, city and county government Economic development associations or groups Regional technology base Universities in the state K-12 education Labor market and talent pool Network of suppliers Historical record in Oregon Industry clusters Oregon's culture

POLICY RECOMMENDATIONS (10 minutes) What types of solutions/initiatives might the area work on to implement positive change? ANNUAL REPORT CARD (10 minutes) We will initiate an annual entrepreneurship report card as a means to track the vibrancy of the entrepreneurial eco-system over time and to compare Portland to the peer city group. How would you know if the area were really entrepreneurial? 45

State of Entrepreneurship In Portland April 30, 2011

Appendix B: Survey Text Responses


Open Survey response to the question: Why or why not to do you consider Portland to be an entrepreneurial city?
There are lots of creative people coming up with great ideas. Our free and pioneering spirit also compels people to dig in and make it happen. Very reticent to invest in new technology, low amount of investment funds, low ability of bands to finance young companies' growth. There is an entrepreneurial community, and some level of funding (of course, never enough). There is a lot more interest and support compared with 10 years ago but the entrepreneurial community is still emerging because there have been few successes. Startups. Food Carts! I believe we have the spirit here but it is in pockets. OEN is fantastic, and there are other great resources, but overall it is limited. I also have difficulty finding employees that don't have the Portland "work-life balance" philosophy. Very liberal (negative) attitude toward business. Lots of people with ideas and a very supportive, though small, group of attorneys, angel investors, organizations (OEF), etc. There is very little support for entrepreneurism as far as funding or resources. Business taxes in the County are discouraging for business with growth potential. There is an entrepreneurial community (OAF, OEN, PVG, etc), but participation in these groups is overlapping and minimal compared to other cities per capita (Seattle, San Francisco, etc). There are plenty of organizations and individuals in this community that want to support entrepreneurs. Once you get involved with any of the groups, you will find leads and access to others. Unfortunately it can take a very long time to get the groups or individuals that have the real answers or direction you need. I think this is just part of being an entrepreneur...always on the hunt for the answers to keep you going. Number of startups vs. Fortune 500, hands down an entrepreneurial city. Startups are the engine the drives Oregon business. Entrepreneurship is encouraged and fostered throughout the city: examples include the incubator, OAF, the numerous angel investors and executive support committees,..etc. Not that many big companies...so the need for jobs drives some activity. There is a good environment for very early stage startups, lots of creative people, and tech folks. Portland is very entrepreneurial, but in my experience we're 'small' entrepreneurs. Lots of people who want to do things they want to do, or do it their way, or experiment. Not many people building ideas to scale. We're a creative, innovative city. There are lots of smart people who have knowledge from companies like Intel, Nike, etc, and start their own businesses. We are also trendsetting (think food carts). We seize opportunity. We have a vibrant startup community. There are events and energy that support an entrepreneurial spirit. I see people starting new ventures, planning to do so, or dreaming of doing so every day and all around me. Very few get traction, of course, but the spirit is here. What I don't see a lot of here, which is a plus and a minus, is greed. The "money is just a way of keeping score" mentality. Most folks here seem to be interested in creating comfortable lifestyle businesses rather than "empires". For some (venture capitalists) that is a bad thing. But for the founders, it means focusing on true value and quality of service, as well as ethical and sustainable business practices. I strongly suspect that *customers'* transactions with Oregon businesses are quite substantially more satisfying than with companies from other areas of the US and overseas. Perhaps someone should survey them? I suggestion speaking with the CEO of Sunstone Circuits in Mulino, Terry Heilman, for a great example of "Oregon values" in practices as a key differentiator. Yes because of OEN and OTBC and SOA. And because of OHSU. No because few angel investors or venture capital firms or big firms that spin-off startups. The City of Portland government is not a factor one way or the other. Yes, because of events available for entrepreneurs, start-ups including a successful second year for Pacific NW Cleantech Open.

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State of Entrepreneurship In Portland April 30, 2011 I live here and I am one. Also, I know several others, birds of a feather. Many active entrepreneurs, from the food cart folks to the technology/angel/VC folks. Active university technology transfer. Active angel investment community. Network of groups helping entrepreneurs. There are at least two if not three ecosystems that are thriving. Intel, Mentor Graphics, and maybe Nike or Tech. There are several bright people from these companies have started on their own in the past and have made it big and there is potential for more. The people and mindshare are here and ready to contribute their experience to new dynamic ideas and business acumen. Of course, these people need more financial backing. Young, creative, educated, energetic, open to new ideas. But, access to capital and knowledge of business often an issue. Also a lifestyle city, which can be reasonably good when young. There is a dire lack of funding as well as motivation in Portland for the most part. Because has Portland has such a great and diverse creative class. Nike, Adidas, Intel, etc. etc. all attract go-getters that at some time have the hankering to go for it on their own. Also, I believe that the Mayor informed us that Portland has the more small businesses per capita than any other U.S. city of comparable size (or something like that). Entrepreneurs come in all sizes and are not limited to the high tech, looking to make millions types. The explosion of independently owned food carts is a great example of the entrepreneurial spirit in this town. I am also aware that Univ. of Portland has a great entrepreneurial program, and I have had contact with students in or coming out of that program. Finally, PSU's accelerator, NedSpace, OEN, and other organizations and companies in town all lead me to believe that Portland is an entrepreneurial city. The atmosphere has changed considerably in the past few years, currently new companies and initiatives like the Portland Ten have spurred growth in entrepreneurial efforts. Lots of young people on the cutting edge of new stuff; lots of people who embrace alternate lifestyles and are well situated to serve niche markets; high unemployment, which encourages entrepreneurship; high level of education Attracts small businesses. Few big corporations here to offer employment so folks have to strike out on their own. Lots of local artists and business. First Thursday and Last Thursday are great examples of local artists. Many local designers and boutiques to choose from! I also know quite a few people who have or do work for startup companies! Have someone sit down with me for several hours to a half day and I can take you through best practices and missing parts of infrastructure. In part because of OEN and the information and connections it offers startups. In addition, the City is building a culture of entrepreneurship through successful serial entrepreneurs that live and work in Portland. I think the income tax being higher in Oregon drives entrepreneurs to live across the river to Washington and this is a brain drain and tax drain from Oregon and Portland's economy. I have an independent volunteer Advisory Board that I meet with monthly. My Advisory Board members are experienced, successful, local entrepreneurs. I am fortunate. I have a good college friend who is an entrepreneur in Norfolk VA and has not such support network as OEN and has not been able to connect with other successful entrepreneurs to tap into for advice. Portland has "entrepreneur going on." Lots of people interested in creative fields that involve technology. Barriers to entry are decreasing in a lot of these fields so many are jumping in... especially those are struggling to find work with employers. Pro: Great place to live, so people want to work here too. Pro: Great source of inspiration from the supportive "nature" of the inhabitants -- polite, inquisitive, supportive, trusting, kind. Pro: Off the beaten path, so new ideas can be tried here without the "harsh lighting" and press scrutiny in bigger cities Con: People don't think big enough, and the infrastructure doesn't encourage them too. We succumb to the FUD trown our way by other cities. Lot of energy around new business Yes in the sense that Portland has a very independent spirit, very supportive of local businesses, and there are a lot of people doing their own thing and figuring out how to make a lifestyle out of their business and vice versa. The difference is the driver - I don't think as many people are entrepreneurial as a means to get rich or build a business, but more as a means to balance lifestyle and find meaning in the work that they do and make "enough" to get by while having time to enjoy all the area offers or family or community or whatever else. Too much emphasis on government provided services and social programs, rather than building, support and

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State of Entrepreneurship In Portland April 30, 2011 development of new companies, especially in re-locating to the city as corporate headquarters. Too much emphasis on maintaining a "lifestyle" rather than the effort to create a "living" and this is reflected in the cities high unemployment, continuing recession and flight from the city to other venues. Everything in a city grows out of a viable, growing and robust business environment, including money for schools, the arts, non-profits, culture and a host of other city based services and programs that need taxpayer money, and therefore, tax paying jobs to provide for them. Good jobs are very scarce in Portland thus forcing those that want to live here into creating their own job. There are several programs, events, networks, etc. in Portland supporting entrepreneurship. Resources are available to those who seek the resources... Because of the creative approach and positive thought process of this community. There are many things about Portland (and Oregon) that make the barriers to entrepreneurial activities lower than other places with which I am familiar, such as Boston, MA and the State of California: Transit is very good Cost of living is low Costs of business registration are low and the state CBR seems responsive There seems to be a surprisingly widespread ecosystem of support groups - SCORE, Portland10, various incubator/accelerators, etc. There is some truth to the idea of the "Portland ethic" - with many people willing to be collaborative, encouraging and supportive Lots of good will. More social tolerance. The ethos is predisposed to be attractive to would-be entrepreneurs; this doesn't mean the infrastructure or governmental environment is predisposed (usually lip service only). Portland, like many cities, has a mistaken belief that business growth must come from policies introduced by the public sector. It is the other way around. The private sector creates jobs which drives revenue for the public sector. There are plenty of incentives for a company that wants to bring in 300 jobs, but few incentives for 30 small businesses to bring in 10 jobs each. Lots of support groups and grass roots level organizations to help entrepreneurs. Filled with creative people who are passionate, dedicated and determined to make something out of virtually nothing...or at least just out of an idea! I myself have had good results and that's with minimal marketing. In-person networking has been the best way for me to generate business. I think Portland is full of successful entrepreneurs. Just look at the Saturday Market and the creative community in general. I've heard that finding major funding is a bit difficult because Portland is not a headquarters type city besides Nike and Addidas. I think there's a lack of fulfilling jobs in the town, which pushes people to start their own thing. Many Startups, a supportive E community. Experienced risk takers that have tried to start new companies many times. In the few months that I have been looking at the business environment here, I have found many, many people working on a wide variety of new technologies and services. Economic climate - don't feel the creativity and vibes that you find in Seattle and San Francisco. After visiting other cities and states, I found that Portland is one of the best cities and state to build my solar business. I expect the region is about to explode with Electric Vehicles, Solar PV systems and charging stations to supply the demand. In fact, Oregon has created a corridor of electric charging stations along the I-5 highway from California to Washington. I will go with why not. Lots of talk but little walk. Portlanders want to be entrepreneurial so that they can have the freedom to work for themselves where/when they want, to take time off to enjoy friends and family, to leave early on Friday, to have the bragging rights of "my company", to be employed when there is no one hiring. For a town with so little actual success in creating companies, there is an enormous publicity given to the Best Company for This, the Best CEO for That, the Best Under 40, the Best Women in Business, the Best Whatever -- in a town which frankly has the best of nothing (save "livability") relative, for example, to Silicon Valley or Vancouver (BC). I think people are dying to get out of California, and be someplace where the quality of life is a great deal better.....cost of living, job prospects, real estate, etc. It is an entrepreneurial city, due to economic necessity, as opposed to financial incentive for doing so. The lack of jobs in our city and/both state-wide, have caused many to re-define their daily occupations. While I am glad to see support for small businesses in Portland, I am concerned that banks only tend to grant loans to already proven, established

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State of Entrepreneurship In Portland April 30, 2011 businesses and are closed to new start-ups. The situation with credit unions looks much more promising, however. Too much regulation, too high taxes and so much more. My business is too small to qualify for no taxes aka Rentrak so the plan appears to be for small business to pick up the slack. Plenty of good ideas around. There is a diverse set of technical resources and the embedded attitude of many individuals seems to be very entrepreneurial. Many are software based however there are quite a number of non-software innovations that get overshadowed by the specter of 'technology' and web apps. The people (potential customers) and the city are willing to embrace alternative approaches to doing business. For example, consider the food cart areas. It is the only way to get a job. Access to tech forums venture firms and venture lawyers in abundance. Not enough capitalfew spin off companies to choose fromuniversities don't spawn many startups Oregon doesn't have the right frame of mind. As there are not many large Fortune 1000 companies here in Portland and lots of young creative types moving to Portland which helps to make it an entrepreneurial city Yes: a culture of collaboration is pervasive in Portland which provides a nurturing environment for entrepreneurs. No: Portland does not seem to attract risk takers, at least big risk takers. Meet lots of startups! My impression is that most start-ups choose not to locate in Portland. My impression is that for tax reasons, start-ups choose to locate outside of the City of Portland. Government decides the winners and losers. Also, regulations, licenses, red tape, etc. take time and capital away from productivity. Portland's culture is risk adverse and too focused on taking care of the weak and governmental services. The business investors and successful entrepreneurs are pointed to as the problem and, therefore, are expected to pay for it. Not a good incentive or culture for an entrepreneur to want to plant seeds and grow. Portland's political environment is more concerned about creating jobs then about enabling the creation of successful and profitable businesses growth. Politicians say they support business, but the policies primarily support the protection of the labor force. The perception that by first creating more jobs will result in more successful, entrepreneurial companies is prolific with governmental officials. But this perception is short sighted. For a business to be successful takes capital and customers first, not a thriving highly paid work force first. Such a work force will be a byproduct of success. That is the entrepreneur spirit - take risk first. We have a lot of enterprising individuals, especially in the software segment, who are constantly innovating and trying to create new paradigms. General mindset is not entrepreneurial, limited senior technical and managerial talent, no world class colleges so not a deep local talent pool to feed/sustain the entrepreneurial spirit. I work with many entrepreneurs that are thriving. Support of free thinking in the private sector. Higher education is available. Needs more support from government. The city is large enough to support an entrepreneurial class, the population is generally creative, and considers start-ups favorably. However, you'll have to grow somewhere else. Strong tech base Strong clothing/shoe base While the environment may include smaller ventures it is still an innovative environment that inspires individuality. That same individualism in many cases leads to a new venture that expresses the entrepreneurial spirit of the leader. We also appear to have just enough members in our local government that are willing to support entrepreneurs, although from a tax perspective it doesn't always work out that way. For the purposes of this survey I am willing to separate the legislation from the supporters. Creative atmosphere The city doesn't have a long term vision for how to create an environment where entrepreneurship can survive/prosper: Strong educational foundation. Stable/low tax structure. People: Lots of folks looking to start companies. City of Portland:

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State of Entrepreneurship In Portland April 30, 2011 Not (really) very business friendly. Like to say so, but not so much. Look at the way the city votes. Always looking at "Businesses" to pay more in taxes, when it's business that create sustainable jobs, not government. So... When I answer the next questions, it's from the perspective of entrepreneur's wanting to build something, NOT the government's support thereof. Yes - good spirit, decent community of entrepreneurs, lots of small self made people, ideas and companies NO -We have heard this before but we know that Portland lacks the sophistication in the entire eco system of entrepreneurial communities (higher education, investors, successful entrepreneurs, large successful companies and political/tax structure) There are 3 key contributors to the entrepreneurial spirit of Portland, OR: Creative People, Affordable Operations, and Available Resources. This convergence of ingredients necessary for a start-up also creates a hotbed of opportunity. But sadly, there is one critical piece missing that could cure Portland's unemployment problem... Angel Investors. I live in The Dalles We have a lot of start-up tech companies. My particular invention is a high tech telecommunications device that should appeal to billions of consumers. There are a lot of programs/activities to support entrepreneurship (in and out of the universities). EX: OEN, Incubators, NedSpace, SAO, Portland Ten, Silicon Florist blog, VCs, angel groups, etc. The City also does a nice job supporting entrepreneurship with $. Government bodies get in the way through restrictions, laws and taxes. Generally those in charge haven't faintest idea of what business is about much less entrepreneurship. Portland has the spirit, but lacks the focus. There are a lot of people with good ideas, but it often seems as if they lack the resources to launch new companies. It almost seems like every great idea in Portland is doomed to be at most a sideproject. What needs to change is the start-up environment. It needs to become easier to find the resources to launch a company and take it beyond side-project. Lots of creative people, lots of unemployed people starting businesses because the jobs they had are gone forever. Not enough angel groups, support programs, incubators. The entrepreneurial vibe isn't super strong here and general work force is unmotivated. I think there are quite a few start-ups in the Portland Metro Area. I believe many of them, however, may never become the next big thing. Some will. We should create an environment in which both thrive. The quality of life aspect of Portland attracts smart entrepreneurial people to both relocate and also stay to grow a business. Not quite sure what constitutes an entrepreneurial city. And I definitely don't have enough info to form an opinion comparing Portland to other cities. There is not the support financially of early stage ideas or entrepreneurs equal to other regions of the country, namely Silicon Valley. Even though I said no, there are a few hints of it wanting to be. I have started 3 companies and we had one in Portland for over a year and it was struggling. We moved to Silicon Valley and we got over 3 million investment and the company is making great gains. My other two, I invested over 1 million myself, and couldn't get any other investors. We are doing a relaunch and using Salem investors. I want to believe and I think there is a desire. High on innovation, average on number of entrepreneurs, low on levels of funding / professional support. I believe that Portland supports "the arts" so much with their Farmer Markets, Saturday Market, etc. There are so many large corporations in Portland that started as an entrepreneurial venture and I believe that makes it very friendly towards entrepreneurs. Though, I have heard the new tax laws are not very friendly towards business owners. I am not an expert on this subject; it is just things I have heard in conversation. A general culture of wanting to support local businesses helps the little guy get a foothold.

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State of Entrepreneurship In Portland April 30, 2011

Open Survey response to the question: As you think about economic conditions in the Portland area over the next five years, what is the single most important thing that can be done to promote the success of businesses like yours?
Access to more capital Make more angel money available Average; continue to organize the angel community. More access to capital Limit bureaucratic overhead and gross revenue tax. Better computer science programs at state schools. Figure out how to pull Bay area VC's our direction. Equal footing with other larger competitors Fund K-12 schools adequately. Promote growing businesses (media, talent, etc) Manufacturing Access to capital Passion and persistence Working capital. Period. More access to debt and equity funding Education, education, education, and education. More access to money & press. Attract more VCs Fix education and promote our values (together). Decrease policy, regulation and tax roadblocks Limit the need to deal with lawyers Decrease taxes. Will move back to Cal. in 2011. Easy access to short term cash Access to capital Enough opportunity to present value proposition. Financial support to new business Access to capital. Difficult to start with no $. Make funding available More attention from the media and better mentoring Even more entrepreneurs Outreach PR of Successful Companies Not sure... Job creation and educational system stability Small Business Loans!!!!! Tax breaks, access to grants and loans, other Relieve tax and admin burdens; health insurance Lower taxes More business friendly policies Improve higher ed and vocational ed Education Tax incentive for new companies Lower tax/increase incentives for business owners Venture investment by companies will to take "risk

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State of Entrepreneurship In Portland April 30, 2011 Lower taxes and fees Keep technology on a cutting edge forefront. Opportunities for mentoring, funding, and exposure Higher fuel $, employ more people less wage+bonus Establish vehicles for capital opportunity Assist in helping secure startup business loans Don't increase corporate fees or taxes Reduce the tax rate Conferences for start-ups and entrepreneurs Better access to human resources Capital for Start and Growth An increase in available capital Reduce State capital gains taxes on startup capita Established Portland business support More Angle investors Lower taxes and recruit headquarters companies More money to fund young companies! Bring Oregonians back from Silicon Valley Job Market, people working, increased spending Provide low-interest rate loans. The media and public to stop talking doom/gloom lower personal and business income taxes If I hire employees reduce my taxes Support resources Seed stage funding - angels are too risk-averse Stable alternative to fed. reserve notes Make more capital available Improve the attitude of the workforce a venture leads generation system would be best better city support of new businesses attract more venture capital and talent access to capital Access to larger sums of capital State/co biz and tax environm't must improve. Business friendly tax policies Cut taxes and regulations Negative views of rich business people is toxic Championing our successes Create excellent colleges; draw talented people Access to experience and knowledge Confidence in the economy and government Easy credit and access to start up capital. Lower taxes and less red tape Access to capital Revise tax structures; implement sales tax. Capital availability Access to capital, get banks to make loans Low tax rates.

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State of Entrepreneurship In Portland April 30, 2011 Reduce Government's involvement. Rely on the market Economic/tax structure and investor $'s We need a shop local dot.com company in Portland. Best service and knowledge we can provide Provide capital More angel funding Confusing question Keep government out of it The community getting behind the PDC plan Reduce the business tax Lower taxes. Support space, such as incubators Tax incentives More economic development outreach to new biz Connections with Fortune 1000 via trips, web sites Change the tax laws on selling a company in OR. Government groups to fan the flames. Portable health care. Allows startups. More training on business development Promote entrepreneurship in others

Open Survey response to the question: What are three barriers to growing successful businesses in Portland?
Thinking bigger. Raising money. Finding experienced talent...i.e. people with significant start-up experience Lack of financing, Lack of rentable space without stringent securities, Lack of executive talent Perception that Portland is a computer-only community. Odd tax structures. Lack of funding beyond the Angle-level. Capital Management talent (other companies I know have trouble attracting management) Some but insufficient support from State government Capital Experienced senior executives and advisors Lack of: Executive talent Junior engineering talent VC interest in Portland Technical employee base with "Stanford" frame of mind Further support by Government to offer support to programs like OAF. Regulation Taxation Shallow talent pool Lack of angel investors, which I believe is due to the high capital gains tax rate. Our K-12 system needs more investment, including arts/music/PE, in part to attract top talent from out of town. Honestly, we need a new Mayor.

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State of Entrepreneurship In Portland April 30, 2011 Access to funding, access to talent, taxes (unemployment, county, etc). Manufacturing, lack of, for apparel and soft-goods Bank loans Taxes Tax structure, lack of quality VC's Coming up with a unique, high growth idea Writing a concise business plan Communicating that business plan with enough detail and brevity to gain the trust of others within a 15 minute meeting. Working capital access Poor state reflecting in poor government / schools etc... High corporate taxes Funding pool High level exec talent Personally, it doesn't bother me that we aren't particularly business-friendly; I love living here. But the city and the citizens aren't particularly business-friendly. We're a little small as a market. Most of our business is now from out of state. Public services funding for basic 21st necessities like higher ed must be addressed. Raising capitol. Taxes. Government/City support. $$: VCs seem to be reticent to invest in PDX-based companies Talent: While we have a higher per-capita number of highly talented web app developers, the sheer number is low so it's hard to build a team Executive Talent: The CEOs in Portland are not up to snuff Risk. Investors, employees and customers need "safety nets" in order to risk starting new businesses. Negative regional perceptions. We need to market what is good about Oregon businesses (value, ethics and service). Infrastructure. From schools to roads to commercial space, we need great foundations for great businesses. see above Lack of local customers in my field which in my case is biotechnology. Global economy Poor technical transfer from the local universities. The tech transfer offices want to get money for their university not foster business growth. Taxes. I plan on moving back to San Francisco and working only in Portland on a PT basis. More opportunities in the Bay Area. I find Portland to be clique-like to outsiders. People willing to do the work vs. staying on unemployment. Access to cash where the process outweighs the reward Capital, Capital, Capital None I can think of right now. Cash. Easy access to qualified employees / partners / founders. Regulation, taxes, zoning and fees. Cost of needed land use review stalled my project for over 1 year. Funding Civic Support Taxes Lack of seed and VC capital to compete with technology companies in the Bay Area Groups that are here to help startups have unethical elements that don't help startups Lack of mentors in the area who have done it before ? Access to top shelf talent with a start up drive Access to angel investors or start up grants Access to city resources for tax / license and legal savings

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State of Entrepreneurship In Portland April 30, 2011 Overall income level of most Portlanders Perceived tax and regulatory barriers Strong leadership advocating for business -- sometimes business feels like it is given short shrift Cost of living versus salaries offered Cost of doing business in a tight economic economy. Not being aware of the "help" that is out there for small businesses. This is huge and complicated question. See answer to number 2. Capital without personal guarantee strings Regulatory stove-piping and bureaucracy (our business is regulatory-driven) Health insurance cost (outrageous for the service and value delivered. Employer carries the burden and employees have no clue as to the cost - adds $3/hour to the comp for each of my employees.) Taxes are too high School System not fiscally sound. Make the hard decisions now and get them behind us. Energy costs Portland and Oregon have become rather business unfriendly. High taxes and other measures serve to reduce people's willingness to assume the risk associated with business ownership. Can't keep dipping into the same well and expecting the wealth creators and job creators to stick around. Skilled entry-level workforce Infrastructure providers who encourage venture-scale outcomes More successes that can breed successes Talent, Investment revenue High Taxes and fees for businesses Self employment tax No added incentive to grow and keep businesses here Not enough paying customers in the area because the area is depressed - so you go where the clients are (outside the area) City business licensing laws Focus on social programs vs. business development Scarce funds to entice business to the city, including tax advantages, reduced property taxes, local education support. Government, government, and government Having to educate/explain to business owners the impact of Initiatives 66 & 67 Oregon's overall state tax structure Increasing seed capital and angel investment activity in the region Drive (a.k.a.: effort) Optimism, or lack thereof, in terms of those having a particularly tough economic time. Business closures reflecting poorly on the Metro area. Limitations in size - the talent pool and local market size. Limitations in geography - Portland is not in the northeast (not a flaw in everyone's eyes, but sometimes a factor). Stable state budgets & funding (universities are weak, school funding is pathetic, and the budget process create wild instability). Old paradigms using old fuels (gas etc + coal etc) being less expensive than green alternatives. Taxes should be added to old fuels to help pay for their hidden costs of use. Access to Capital Availability of good industry market data Source of innovation assistance Attitude. The perception is that Portland does not truly believe that small business is the key to our future. Politics. If your focus is on the dis-advantaged you lose sight of how best to help them in the long term. Costs. Encourage startups and home based businesses by reducing or waive fees for a period of time. Finding talented workers at reasonable prices. Access to experienced talent Tax rate Perception that Oregon is not business friendly

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State of Entrepreneurship In Portland April 30, 2011 Business community unwilling to pay what my work is worth Awkward tax structure and law Small-mindedness (too much small town attitude) Lack of qualified people Lack of exposure on a national platform Difficult access to international business Capital Taxes Need to expand the network of capital sources and quantity of dollars available. Could incentive taxes be created that would allow investment dollars to work here - "for free" Capital Entrepreneurs Government assistance - incentives High Taxes Local government regulations We need more big successful IPOs leading to more entrepreneurial risk taking State income and capital gains tax Difficult to figure out - the business community (potential customers) is very tight - typically a business finds one customer who helps them build out a product - but established Portland businesses are conservative and not locally focused Bank loans to start ups, Angel investors that want 1-2 year returns vs. 5-10 One-source product development company that takes startup companies with patents to profit High taxes Government is anti business Poor funding of public education Money Experienced executives Lack of a culture of working hard No seed/startup capital No senior management with IPO/startup successes Insufficient workaholics, too much livability Capital There are many laws, rules & regulations. Not enough workers who are trained. Saturation of certain local markets. Confidence Networking Beginning working capital Oregon's Tax structure along with additional city of Portland and Multnomah County taxes High unemployment Lack of a sales tax to provide more consistent funding for schools Taxes Lack of support for business with less than hundreds of employees No vision of what is being done aside from increasing regulation. Attitude of outsiders willing to invest Lack of connectivity to resources Ageism Portland and Oregon are not highly regarded or perceived by non-Oregon investors and power brokers as a viable incubator. Local seed investors are few and far between for starting, and angels are getting very conservative. State assistance such as OAF and other state government funding is severely limited. Enormous startup costs and lead time Difficulty getting your message out Multiple languages and cultures (That's also an opportunity)

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State of Entrepreneurship In Portland April 30, 2011 Dependency on Silicon Valley models and ideas; Lack of solid infrastructure network; Need more entrepreneurs with big ideas. Bureaucracy Poor work force Lack of capital (many VCs will not invest in Portland based businesses due to reputation of work force Oregon tax rates are much too high compared to Washington. Portlands business community is insular and anti new business Oregon corporations do not work in state with small business providers. There is no incentive or rewards to work locally Labor force has limited high tech experience Portland does not fund startup companies properly Entrepreneurial network is limited Access to Venture Capital or other equity Available to experienced talent in the software and internet industries The anti-business attitude Access to capital Time and place to spend nurturing new ventures without income for founders Access to capital Limited number of headquarters companies Attitude of external equity providers about PDX Small pool of talent Access to larger capital sums A bit incestuous here State, City and county leaders that don't get it, anti-business environment prevails in this state that runs counter to hopes to grow economy, partially cancelling out an entrepreneurial environment. Oregon has to be as good or better to grow a company in than Ca or Wa, or people will go there instead. Access to growth capital. Lifelong bureaucrats in govt positions who have no respect for or concept of capital at risk. Anti-business climate created by high taxes/fees and a general disdain for private success. Lack of freedom in land use and high financial burden of union-dominated, poorly-performing programs (education, infrastructure, governance). Employment laws focus on protection of the employee at the expense of the employer. Create a government and community culture that applauds the business investors that take risk instead of viewing business as a necessary evil of society. Property taxes and capital gain tax - reduces the changes of entrepreneurial repeated success. Lack of deep pool of talented people, both technical and managerial. I work with companies to get through barriers so I'm not focused on barriers... I'm mostly focused how to keep moving forward. With that said, the things that cause challenges to me are: State budget uncertainty Banks being timid and unpredictable in the lending process Too much negativity in the media. The world is not about to end. Economic confidence Government support for small businesses not just the large ones Capital funding Access to capital Resistant and antagonistic green building officials. More proactive city staff High Taxes, Restrictive land use laws Energy costs Capital Talent Capital

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State of Entrepreneurship In Portland April 30, 2011 Access to capital Portland self image as a lifestyle haven Senior talent Shortage of successful larger companies spinning out new teams and ideas Shortage of top-flight C-level executives, particularly in sales and marketing Cultural disapproval of ambition/hard work/success. Limited capital and Taxes. I would also add that there are also social barriers in Portland based on Race. The network here offers additional challenges where diversity is concerned. Proximity to established, large companies (i.e. there are no anchor companies) Taxes/licenses Access to capital A sense in the community that Portland is a liberal bastion -that government wants to reallocate wealth at the expense of businesses. High tax rates. Education system not properly funded. Measure 66/67 mindset. Small thinking. Example: "Small business" in Oregon mean fewer than 5 people. The official definition for small business is a company with <500 people. (Government) Stop trying to "help. Wealthy people invest in businesses. A dollar taxed is NOT a dollar invested. It is not one thing; we need to gradually raise the level of the entire eco system. Angel Investors Industry Diversity The Confidence/Perception of the City Multnomah County Business Taxes No requirements like CCB. People are not trained and using technology as a second job and charging less. Getting people to provide capital without stealing your invention. Access to more angel and venture capital (or investors doing more syndicated deals) Access to more savvy executive level workforce willing to plug into running start-ups More savvy investors in general Getting proper technical support when setting up Access to capital if you aren't a hip, flavor-of-the-week/moment venture Getting special support for professional services Money Socialism Mayor Adams Access to capital Access to talent, Access to professional network to encourage growth. High business taxes, difficult permitting processes for expansions N/A. We're an internet company and haven't experienced any barriers. We have been quite fortunate. "Knock on wood!" My complaint is always the same- taxes or other pro-small business incentives. Lower taxes, suspend them for a couple of years, and offer incentives.... anything! Access to VC/Angels Access to capital Access to executive talent Available talent Available capital Business environment Weather Banking Time Zone The greatest constraint for my business is the tax laws in Oregon. If you sell a company in Oregon, versus Washington for example the tax implications are enormous. This is a dis-incentive against successful companies

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State of Entrepreneurship In Portland April 30, 2011 staying here. Investment capital Low cost incubator environments Political backing (Oregon Inv. Fund) Success stories Executive mentors Interested funders Human talent High cost of living & benefit costs Culture of slow pay in most small businesses

Open Survey response to the question: What actions do you think the City of Portland should take to improve the environment for starting and growing businesses in the City?
Help promote the successes we have, help create funding and business incubator support, ensure the tax structure doesn't drive away the angel investors. More flexible leasing of space Not sure beyond trying to standardize the tax structure relative to nearby cities. Support Portland Seed Fund with continuing funds Reduce taxes Sponsor entrepreneurial groups such as OEN, PSBA Support Portland State University more Consolidate and simplify the current resources available to new business - it's confusing, frustrating and most always a waste of time to try and utilize city services ranging from setting up a business, figuring out what the PDC or other organizations offer etc. Do this before taking on anything new. Provide capital and laws that provide favor to early and mid-staged growth. Honestly, it's not about many of PDCs current initiatives. The bigger picture, starting with a solid K-12 school system and also a strong higher ed system, do more for economic development in my view than a lot of what PDC is structured to do. This is the catch-22 of urban renewal, I suppose, because these districts take funding from core services and in an environment where core services like schools and even county services are at the margin, they are counterproductive. The homeless population downtown is uncomfortably high. In addition, the capital gains rate is high enough that I believe it discourages angel investors from locating here or staying here. I think the City of Portland's Mayor should talk about this. The problem is that our current Mayor is really not respected at the State level and I hope does not run again. Increase funding for new startups. I have noticed that there have been one or more new funds created this year to help startups. I don't know the details of those funds other than the amount of funding and that the people managing them are well qualified. However, my opinion at first glance is that the size of the funds being offered is not close to adequate to do anything meaningful in the way of promoting new businesses in Portland or the state or Oregon. Provide incentives for new businesses, especially if they are hiring. We have grown from 2 to 15 employees in two years and have been penalized and restricted by taxes. It surprises me that while unemployment is incredibly high and businesses are failing, the city and state are doing very little to encourage the growth of Oregon based businesses. Start incubators with Shared office space (if needed) e.g. phone, copier etc. Access to legal, accounting, banks, individual investors, press and manufacturing directions if needed. Supporters in various fields - of like businesses. "Reality Checks" is the idea viable, someone to really examine the idea from the beginning, rather than support blindly. This can continue at all levels. Tax benefits to start your own business. Improve the tax structure to encourage businesses to form there and employees to stay here or move here. Improve the VC environment locally.

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State of Entrepreneurship In Portland April 30, 2011 Organize social get together for entrepreneurs to meet with other like-minded people to share ideas. This would accelerate success by allowing the network to share the mistake of others to avoid repeating history. Back off small businesses...support them more and tax them less. Stop the government jargon that places all companies in the same bucket...small companies employee many but are mostly hanging on by a thread...and the state treats them the same way as big companies Figure out how to make the schools stronger...they are much weaker than even those in the very poor midwest. All of this is hard I know...I spend more time on my business and helping it succeed but our gov't here isn't focused right...but that said, the reality is politics is politics and it won't change. Don't do 100 small projects -- do 5 big ones. The city seems to do a lot of little initiatives which satisfy specific constituencies but don't seem to have much long-term impact. And push the state to fix funding for education. Everyone in our office is from out of state and moved here for the lifestyle; but if Portland suddenly becomes unfashionable, we don't have an educational system capable of supporting firms like ours. (I've taught at PSU, I've experienced the weaknesses first-hand...) More support for small businesses/start-ups. Less taxes for small business. More access to money. I think there is a lot of moaning in the Portland business community about how Portland & Oregon aren't "businessfriendly". I think this is hooey. Portland is a great place to live, offers a quality of life unsurpassed in the nation and is #6 on Forbes best states for business. OEN should publicize big wins like this and promote Oregon & Portland as the business-friendly places they are! When I started my business, I consulted a midsize Portland accounting firm that strongly suggested that I locate outside of Portland for tax reasons. (I didn't take that advice.) The City has no control over the key things that concern a business such as a) the need for customers, b) the need for good employees, c) the need for capital. The City has no control over the annoyances that make starting a business harder and more expensive that it should be such as a) the need for lawyers, b) the need for accountants and payroll firms, c) the need to deal with state and federal taxes and regulations. The City has control over things that make Portland a livable city and I think that it should focus on these things. Decrease taxes. Storage for vendors at Skidmore market Cover the Skidmore market with an atrium. Provide large cube office for us to get our offices out of the homes. Shared workers too. Quick access to micro cash 2K < Provide matching funds to grant recipients to encourage them to stay in Portland Much of what the OEN is doing today to grow new business in Portland such as connecting entrepreneurs to Angel funding and Venture funding is exactly what's needed for this city. Not sure what the role of Govt. Should be, if any. Perhaps tax incentives to startups and investors. Create a city sales tax and pull funds from pet projects and entitlement programs such as all the homeless shelters and create a fund that business can borrow from at a fair rate. Thus growing business, creating jobs for these homeless people which will increase the business tax base. Tax incentives to invest in Oregon companies Reducing taxes for successful exits if that money is reinvested in Oregon businesses Have leadership groups be led by actual entrepreneurs and not service providers I have no idea. Anything relating to saving a start up money, especially related to infrastructure costs, tax or license savings and access to legal resources. Maybe workshops? Advocate for businesses -- they are often cast in the bad guy role, but they are the backbone of our economy Leadership for businesses and deliver products, services, business environment that helps business flourish

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State of Entrepreneurship In Portland April 30, 2011 Supporting local entrepreneurs vs. luring in outside companies to "relocate" to Portland. There is a LOT of talent in this city! This would need be discussed via an interview. There are best practices. Provide startup services, lists of smaller, low cost accountants, bookkeepers, lawyers, IT. Encourage bankers to loan money to qualified cash-flow positive businesses without the myriad of personal guarantees and loan covenants. Provide incentives and assistance. Manage the programs well. In exchange, the City should expect some return on its investment from the entrepreneurs - but be on their side. Relieve the administrative bureaucracy - paperwork and taxes. Be efficient with its taxpayer fueled programs, be thrifty and results oriented rather than paperwork oriented. Knock down barriers to new companies forming and becoming legit v. flying under the radar and/or opening up shop in outlying communities. Making money is hard enough. When the city dips deep into your revenues, it becomes tough to justify the risk. Celebrate success stories of companies. Work hard to make business owners feel accepted v. guilty for being profitable, creating jobs and supporting the community. This sense of pride of ownership now is clouded by some perception that successful business people are somehow screwing the general population. This socialist view is really limiting our chances at success. Work hard to retain current businesses. Flagrantly support PSU and UP and OHSU as "first among equals" for City programs that get new graduates out into start-ups, getting them a taste of the energy (and the stock options) at an early age. They'll thank you (as will the employers who benefit from them and thereby hire more). Tax and fee incentive. Pursue the OpenSource City. Many of the groups and networks such as SAO are for larger cap companies; We need a true incubator to help startups find cofounders and staff as well as mentoring. Provide some financial incentives to business owners to start, keep, and GROW revenues here locally. Provide incentives for local residents to spend their money on local businesses. Somehow we need a system that builds revenue and KEEPS revenue within our local system. Hold a Small Business & Venture Summit to solicit business growth ideas from the residents--without any political slant. Listen to the business leaders & make appropriate changes where it will enhance the business experience, revenue and the working lives of City of Portland citizens. Reduce the demonization of corporations & businesses, and their leaders and embrace business, jobs & economic stimulus as a necessary means to have a viable economy and all things that come from the invested monies, including schools, the arts, culture & growth. Get out of the way of business & stop creating obstacles to starting & running a business & making a profit. Trying siding on the side of business people and not those whose only desire is to shut down a business and drive them out of the city. Be realistic about what government can and can't do and what business can do to help. Reduce taxes, fees and penalties so that business do not have onerous bills to pay and can add e I truly feel that the current Oregon government sees business as a piggy bank they can tap into to fund their own agenda. The government needs to change its view of what role business plays in improving the lives of all Oregonians. If small business tax incentives (e.g. employment tax reductions or abatements) increase, I think this would be a key factor in the ongoing growth of entrepreneurial activity in Portland. [Continue to] Pursue international partnerships. Full on free WiFi would also be pretty nifty. The City of Portland appears to be doing a lot already. I am not sure what else would be helpful or effective. I have been impressed to discover the breadth of resources available to me as a new start-up. Give each unemployed person the option to be hired by the City of Portland at near minimum wage ($10) to secure the available skills pool, help them retain/grow/evolve their skills to address current and future demands. If the city cannot use the services of these skills directly, make them available at cost to the public, but not in areas where there is competition. For example, hire an unemployed accountant, who then works for those who cannot afford an accountant do things like set-up books for a new small-time sole proprietor business or tax filings etc. Appoint a small business entrepreneurial czar, with budget and necessary authority to do what is necessary to remove barriers for start-ups and provide a level of capital to existing gazelle-like firms as well as worthy start-ups Perception is everything. If the business community thinks that Portland is not a good environment for business you have already lost the battle. Become a born-again advocate for business opportunity. Invite small businesses in and discuss ways that Portland can change the perception. Remember that is more beneficial for the City to have 30 new

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State of Entrepreneurship In Portland April 30, 2011 businesses that hire 10 people each than one business that hires 300. Portland usually has to give too much away to lure one business who hires 300 people. Offer a direct line to some official for any business that is struggling to get through paperwork jams. The mayor should be the leading cheerleader. I am not privy to his pro-business comments or actions as the press only reports on the splashy big firm(s) coming to Portland. Built it and they will come. Showcase successful startups. This is very encouraging to others who are just starting a business. Interviews, etc would be great. Awards or grants for small businesses - even if only a couple of hundred dollars - is very encouraging and gives a real psychological boost. And small business owners can make a few hundred dollars go very far indeed. This also adds to a business's credentials; showing its received an award or grant. A newsletter or website from the City that lists all the resources available to entrepreneurs. Reach out to the business community and get them supporting the efforts instead of disparaging them; it will take a public and private effort to make this work. right now, there is only lots of arguing and finger pointing...not very helpful. Not sure. Regarding their 4 economic development sector: biting off WAY too much. We're a tiny little city with limited economic and human capital. We need focus on the industries with real opportunities for growth. If sportswear does well, so will software and manufacturing. Also, stop championing mediocrity. We do a lot of back slapping for being pretty average. Then when we are good, we ask permission and beg apologies. Incentivize the money invested in start-ups. Forgive taxes, fees and costs associated with startups for a period time. Work together (government, business, finance, etc. to develop a culture of entrepreneurship and new business development. Provide tax breaks for investors Remove barriers and regulations Encourage established businesses to support other Oregon businesses - build or buy local products to help incubate ideas that can grow nationally Target and develop a solar college or think-tank company that lends their expertise to renewable energy companies such as our solar tracking company--AmeriStar Solar Tracker. Reform the City/County income tax Stop electing goofballs to public office Work with businesses as opposed to alienating them Low-cost commercial space/incubators/parking Provide free wifi umbrella throughout city Zero taxes/fees for companies @ <$1 mil revenue Create more jobs.... It is cost-prohibitive to participate in the Food Innovation Center's mission & programming. They offer many amazing programs that could assist a small business such as mine. Thank you. Eliminate the corporate tax on revenue from shareholders with greater than 5% stock ownership. Realize and acknowledge the fact that over 90% of business in Portland is small and focused on providing for local people. Current policy focuses on fortune 1000 rated companies, While Portland and Multnomah County are not the state they can drive change to support small business, Today the state's behavior is anti-business so maybe it is too much to expect Portland or Multnomah County to be different. Connections to the talent pool Tax credits and incentives don't really help a company that is just starting, has no revenue, and needs to secure funding. More substantial support for the Oregon Seed Fund, OAF, PDC/ODC, and the related organizations that are starting to form (DriveOregon for example) helps quite a bit. Oregon must be the 'go to' place for other states to come and spend money to acquire technology, services, and materials. Promoting Oregon within Oregon is not productive - there is no value for us to become our own best customer. Therefore, a comprehensive 'traveling roadshow' expounding Portland and Oregon benefits at ALL levels (not just livability but tech access, state university access, etc) is needed for Oregon, not just Portland.

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State of Entrepreneurship In Portland April 30, 2011 Make the city a tax haven (0% state and city tax) for any business. Just tax the income, capital gains, etc. on the owner(s.) Allow more tier 1 VCs in the city (not sure how :) Make sure Intel Capital gives priority to business in Portland (not sure how :) There should be a way to help stagnant startups; we need a "critical mass" here in Oregon; this is an advantage for Silicon Valley, where nobody cares about the 100 company that fails, but everybody celebrate the 5 that win. In Portland the ration is the same, but the total number of companies is much smaller. Provide loans to ventures Offer small business small cap ventures preferred access to contracts over large corporations Provide tax free incentives to employ people in business locally Provide pooled access to venture funs not based on new tech offerings. Changing the oil in a car isn't new hot or exciting but it takes capital to start a business and it does have a solid market. Not everyone is a software developer or biotech genius.... Increase financial support of entrepreneurs - seed funding Get an entrepreneur network going - not pub talks but real networks where ideas are exchanged between noncompeting companies Attract a major venture capital organization like Austin Ventures that will support through funding internet and software companies. Good start with seed fund Grants Legal services Easier ability to sell to the state and city Get companies to invest here and create a more thriving economy and increase the talent pool Decrease the perceived risk of investing here Fix the public school system. Who will move here when the schools are so hit or miss Support existing businesses. It is ok to make money, profits allow companies to succeed. Support state and co. gov't to take actions to lower taxes on business and individuals, this is the fastest way to help companies grow. Buy local before buying out of state. Support local companies that need capital from investors by lowering capital gains tax in Oregon and thereby encouraging folks that exit a business to stay in Oregon rather than moving across the river to Wa. Making it better to live in Oregon than Wa when it comes time to sell will tip the scale in Oregon's favor. Supporting a $500K investment from PDC into a local seed fund is not even a drop in the bucket. How about creating an Oregon version of 1202, waiving all capital gains tax for investments made in 2011 - 2012 in Oregon-based companies for Oregon investors. Let's keep Oregon investment cash in Oregon. Businesses will see this and be attracted to a place that supports business growth. Ensure that we have a business tax structure that is competitive with other major cities. I haven't looked into this myself, so I could be wrong, but I have the general impression that Multnomah County and the City of Portland are not tax-friendly compared with other major businesses. Get out of the way! Train the COP work force to support and help existing business become more profitable. Currently, the COP employee culture in one of saying no to business - causing unnecessary barriers to success. The culture should change in making the COP employee's job harder if they say no to business. But current policies make their job is harder if they say yes. Let the government employee take risk by saying "Yes" to business. If we have a government culture that is risk adverse, the community will create a business climate that is risk adverse. A growth oriented business environment cannot thrive in a risk adverse culture. Stop the negative culture in the City that the successful (yes rich) business person and investor is the enemy. That negative culture will not create new businesses. Support them instead of blaming and taxing them. Make the entrepreneur the "rock star", not the enemy. Protect them from frivolous risk and enable them to do what they do best create value. Education: First of all not all entrepreneurs know what the heck a business plan is. Many forget they should also exist for an economic purpose and return shareholder value. Access to offices that give a 'home presence' in both the Valley and NYC. Truth is $ is in the Valley (not here) and major customers in terms of those who can write big checks are East of the Mississippi. A local startup that can 'pretend' it is in the Valley and NYC with shared secretarial, call forwarding from those area codes, a local address to

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State of Entrepreneurship In Portland April 30, 2011 those markets would hide we are from PDX and put us closer to $ and customers. Just look at what Israeli software tech industry did to get US footholds and copy the model... Promote our wins. We build enduring value vs. betting on "red 7", so highlight how that generates the best return to a company who puts remote employees here or investors who invest here. Try _very_ hard to create outstanding local universities. I feel strongly that nothing can be achieved long term without a thriving research & development ecosystem that draws in and keeps talented folks. Oregon already has a wonderful quality of life, so lack of opportunities for talented people is the major missing piece. Reduce the bureaucracy and improve the process of opening and sustaining businesses. When I set up my business, I spent _weeks_ trying to learn about the million requirements (county licenses, property tax, and employment insurance, federal and state tax, transit taxes...). My business is too small right now to afford HR/accountant/legal services, and I constantly worry that I will fall afoul of some unknown requirement. I'm spending too much of my time on this, and it shouldn't be like this. Long term) Develop a court system similar to Delaware, so VCs don't require entrepreneurs to establish companies at Delaware. Clear the political turmoil and make the PDC more effective. Can't help you there. The State and City are more interested in attracting existing businesses that will make a big splash in the new than helping start ups what have promise of expanding. There is essentially no money or incentives for startups just large existing businesses. See comments above Reduce taxes Ease regulatory burden Tax incentives Lower the tax rate. Fix the education system. It's going downhill and needs to be addressed with a long term plan - not just year over year anecdotes. Find a mayor and council that collaborate and work together. Take a leadership role. Defining "Leadership" as... Create an environment for others to be successful. As Government needs to tax $1 to 'create or save' a $1's worth of job, business create sustainable jobs by selling products and services... lifting tax receipts. It's a false economy to think that Government will solve economic problems... unless they change their thinking and work to create an environment for businesses to build wealth for all... including government coffers. Provide a 3 year tax exemption to any starting business. Most businesses are busy trying to justify expenses and tax write-offs during the unprofitable first 3 years when they should be focusing on growing their business and finding / hiring good people. What can we do to keep businesses in the area or allow to compete around the world on products. Providing capital. Support programs like Portland Ten more - they produce results and train the entrepreneurs to be better execs and make sales! Partner with other "entrepreneurial" cities in Oregon to support entrepreneurship as a State (i.e. Eugene and Bend) Create a mentorship program where seasoned and retired entrepreneurs (been there/done that types) can help diagnose issues in early-stage companies, and help them understand what they don't know (that's a bigee), and connect them to the resources they need to grow - even if it means hiring a new CEO to take the company to the next level. So many great ideas don't make it to market because of the lack of leadership on the start-up team. This holds true for existing businesses as well = they hover around $500K in sales or even $1M, and don't know how to grow to become a $10M or $100M company. Where to start? What came out of the Neighborhood Economic Development summit? I haven't seen progress related to that session of more than 300 leaders that I attended. I think more needs to be done to help connect entrepreneurs providing services to the nonprofit sector who are under a certain revenue level with more resources. How about some affordable or free office space in unused university or city offices in recognition for pro bono services provided?

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State of Entrepreneurship In Portland April 30, 2011 Get out of the way and allow businesses to flourish Help promote a positive environment in Portland that encourages new business and encourage existing companies to move or invest in Portland. Reduce permitting red tape, reduce business taxes Lower taxes. Government financial support for small business incubators. Credit Line Help. Incubation Centers. Mentorship Programs. YEO/WEO like monthly meetings focused on growth of existing young companies. Evaluate upside potential of existing young companies and put resource behind the most promising 20%. Buy local. Expose startup companies to city, state, and local business. Promote local businesses and startups! So much could be done to get local startups talked about in the national press and media. Nothing can help a startup more than free publicity and I'd like to see the City of Portland aggressively being a Public Relations campaign to promote local businesses and entrepreneurs. Get some buzz started about business that reside here and in doing so both the company and the City will benefit. Asking the question, "How can we help?", then truly following it through. The answer maybe "we can't", but it is better than never asking and not following through. Then really try to become a match maker. There are some great ideas, that just need the right folks to run it up the flag pole to see if it is viable. It is ok to have failures, because when we do have successes, then we have the "new Nike's", Microsoft, Adobe, and etc.. Henry Ford: Failure is the opportunity to begin again, more intelligently Help develop young entrepreneurs. Connect them to executives in city government, other executives. Create a small funding contest to promote start ups. Promote start ups to solve / respond to city RFPs or existing problems. Do WHATEVER IS NEEDED to help 'gazelle' companies, the fastest growing companies that generate 80% of new job growth. The research shows large employers just trade jobs, while these fast growing companies are responsible for nearly all job growth. Spend less time partnering with the few large companies in town and help make the next generation of large companies.

Open Survey response to the question: Is there anything else you would like to tell us about this survey or your experiences starting and growing companies?
Beaverton's OTBC was instrumental in attracting our company to Portland area but much more accessible, better location, easier access than other accelerators. It was a key enabler of our starting the company in Oregon. Investment on the part of the angel community was also key attractor as well as skilled labor force in the areas of optics, displays and test & measurement equipment. It takes people who are knowledgeable, motivated, and willing to take risks. Those people have to be connected to one another and to universities by information-sharing networks. Connection of people - ideas, money, and management skills - is more important than any "bricks and mortar" or "cluster" initiatives. See http://chronicle.com/article/A-Better-Formula-for-Economic/125441/?sid=at&utm_source=at&utm_medium=en OAF and OEN are great! The above three things: adequate funding for K-12 and core services, reduction of top capital gains rate, and a new Mayor who really understands, cares about and focuses on economic development are what is really needed. I think that a survey like this is a good first step. I hope it reaches the right people and it is taken seriously. Surveys like this are a great way to get lots of opinions. Thanks for asking! If anyone says Portland is not a good city to start a company, they lack heart/desire. The city doesn't make the company, the team does. Fewer surveys, more action, please! I'd rather see the city demonstrate listening by executing well-thought-out initiatives with clear benefits to the community, rather than a steady flow of surveys and visioning projects without

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State of Entrepreneurship In Portland April 30, 2011 action. Oh, and don't listen to the curmudgeons who complain about streetcars and trams and urban planning. These are all things that make Portland different and desirable. If anything, I'd love to see the city focus more on capital improvements to the city and encouraging sustainable development; do what it does best and what the private sector can't do. (Doesn't the mayor have a full-time person working on the arts, for example? Why, when we already have RACC, the Oregon Arts Commission, and many other arts organizations?) It's hard work, but the relentless and open minded will almost always succeed. We need to create more High Schools Like LEP, and trade schools. Rather than teach everyone for College prep, teach where the interested and needs will be over the next few years. The baby boomers are starting to retire and will leave a huge hole in our workforce. Read, "Workforce 2020" Hudson Group for a brief description of the problem. It has been extremely challenging, particularly with the expense of student loans. This financial position may eliminate a number of otherwise bright stars. The banks are not loaning money. Small business is responsible for 70% of American jobs. It's pretty easy to figure out what the problem is. I have not had a positive experience in Portland. I built my business here because I love Portland and this is my home. Raising funds has been an uphill battle and we finally were successful when we looked outside the state. I find many of the groups established to help startups here in Portland actually hurt them more in some ways as they are run by service providers who prey on startups. I finally found the best support through peers, other startup founders, not these groups that charge companies money for attending meetings, conferences etc. I have some pretty strong opinions on this as do a lot of the other tech company founders who have actually raised capital in Oregon. No, thanks. Not at this time (I am running a start up). N/A While I haven't personally started a company, I have watched friends do so and I think it is really important for the City of Portland to support these intelligent, creative people in realizing their dreams by providing as many supports services as possible. Particularly monetary, as that is often where the dream runs into hurdles! The most pivotal point in my development was obtaining business in Northern CA that necessitated my commuting and l there on a weekly basis for about 5 years and at the same time traveling frequently to Finland and Tokyo as well. I could never have achieved or been at the point where I am today without that experience. Coach entrepreneurs to be tenacious and prepared for some roller coasters. It's exciting and rewarding but not always comfortable. Its not easy, but there is a growing number of pro business champions in this town that are eager to shift perceptions and promote the success of others. These champions need to be held up and this type of mentorship should be aggressively supported and promoted. I am encouraged about recent activities with PDC, the City, and other groups to support clusters like apparel and outdoor, and software. Need to see these continue and expand into other industries. In starting a new business, there's the perennial investor-asked question: "what's more important -- backing good people or picking the right market opportunity?" It's rhetorical (like the nature vs nurture debate), but it's relevant in that Portland, as a City, can only influence the 'good people' dimension, and should! Attracting serial entrepreneurs and supporting them to find skilled workers will start the same virtuous cycle that spawned Si Valley, attracting VCs and "think big" infrastructure (legal, accounting, banking, supply chain, advertising, etc.) There is one small support group that you missed in our list that I feel is the Best. StarveUps. This is a great example of what is needed. I personally am looking for cofounder and it has been a challenge. I know they are here, finding them is the issue. Venture investment monies need to be made available for small start-ups--$1 M innovation grants will actually launch companies and add employees. $25 K monies are laughable and might pay for the lawyers fees to incorporate. Understand what it costs to start companies and create low fee, small business and venture loans and grants to make it happen. My company is just getting started. My own weakness is in finding people willing to participate in a new venture that compliments my skills for creating a successful team. How about an entrepreneur/startup matching service? I've successfully started two organizations (private business & nonprofit corp). The nonprofit flourishes; the private

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State of Entrepreneurship In Portland April 30, 2011 business was sold during the prior economic downturn. Given the right idea/concept, I'd start tomorrow with a worthy business plan. I learned this year that Angel investors and Venture funding isn't necessarily the best way to grow a business. I decided to keep my businesses growth organic (and private). Nevertheless, I love being in Portland and its software community is great. I can't emphasize enough how hard it is to find qualified people in this town. Stay the course and follow your dreams. Yes. Have started successful companies in Silicon Valley, UK, Canada, New England -- Portland has the least work ethic of all. Livability is wonderful in Portland/Oregon -- but workability has to come first for commercial success. I need a job, so I can fund myself, and then fund a company I am glad to see the City of Portland crack down on those food carts that do not provide adequate seating for their customers, or that do not follow the rules that brick-and-mortar restaurants must. Honestly, I am bored by the variety of food being offered, which is typically either: thai, mexican, italian, or something along that line. The product I offer is one-of-a-kind and unique (Native American gourmet fast food). What I think could be interesting, is if we gave food pods a theme: for example, there could be an entire food pod dedicated solely to thai or thai-related menus. Also, I lament the lack of street entertainers, and/both other amenities, who add to the potential dining ambience that is Food Cart Portland. Thank you. Our business will grow in spite of and against the current environment so Portland can do what it wants. As our business grows we will make active choices to avoid doing business in the city to avoid having to deal with current policies. Insufficient exchange of ideas I realize the focus of this survey is Portland however this is an issue for the State of Oregon and various elements across the state need to be involved. Starting a company in Portland is painful and difficult compared to other cities especially given the anti new business feedback from business owners and from the venture firms that are only looking for that next hot flip to sell to California. Portland needs to decide if it wants to stay small or get large. If it is going to stay small stop posing as a tech center. The silicon forest analogy is tiring. If its going to talk that way quit branch officing all its innovation. Its difficult to start a company and takes enormous amounts of personal energy and stamina making it easier would stimulate the responses Portland would get to drive the entrepreneurial spirit to the next level Recommend leveraging OEN programs as they are well suited to help start and grow companies How about cutting back on unnecessary regulation in Oregon? Do a bottom's up review of all regulation and unless it keeps us safe everything has to have an ROI beyond the cost of enforcement or it goes away. Why not make Oregon the new Delaware where companies want to incorporate because of our stable law and favorable treatment to corporations. Could have a taxation system like Delaware based on capitalization to help pay for this and other state services, etc. Just note that this survey is from a prospective entrepreneur. Profit is good, not evil. The entrepreneur s personality will take their profits and start other businesses. But without profits, such new created value is not possible. Portland (Oregon) labor laws focus on protection of the employee and continue to increase the risk and costs for businesses and their executives to hiring people. Government employees negative view business profitability causes additional laws and policies that increase the cost and risk of running a business. Such actions create a negative perception to want start or invest in a new venture in Portland. Oregon needs to reach out and support existing, well established businesses that want to grow. The COP focuses time and resources trying to bring in new business and tend to hire other competing businesses outside of the State. Running a business, job one is to make your existing customers happy. If you have happy customers, word will spread and new customers will come easier. I've been with 2 software companies that were founded in PDX but had to pretend to be from the Valley. One I cofounded and grew to > $25M in rev before selling (now part of Oracle) and another I joined that was a Tek spin-off (from their IT group that grew to $30M in rev before being bought by a huge multi-national). The bottom line was that to secure VC funding both had to pretend not to be from PDX even though that is where most employees were (and are) located. Is that wrong? No. It is what it is. So let's help more folks do that if we have to. Unfortunately wins are

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State of Entrepreneurship In Portland April 30, 2011 scored in terms of IPOs (which have lousy success rates in Software BTW) or folks that don't get bought. I think how we score wins is broken. If it drives job creation in Oregon its a win--I don't care how you slice the other metrics. I feel Oregon has tremendous potential, given its wonderful people and quality of life. If we create more opportunities, we'll attract and keep a lot of entrepreneurs. Working for other small business, their advertising and marketing has been a secondary choice to keeping the doors open or retaining employees. Consumer confidence needs to return before the economy can truly recover. Small Business Development Centers are almost useless for start ups. State and city agency resources for start ups are primarily all for political and agency show and not much substance. They all want to demonstrate how much they are doing for businesses but it is mostly superficial puppetry without much results. And, when the occasional success appears, they blow it out of proportion and use it for PR to prove how helpful they are been. Most of the time in starting a business, city officials tell me that I can't do it instead of helping me figure out how to do it. Cities and counties routinely give stiff arms to new ideas and business opportunities instead of facilitating them. Right now in this financial environment the lack of financing or venture capital is killing new businesses and seriously damaging existing ones. As for Portland specifically, I have found it difficult to impossible to find or contact the specific city staff needed to help my business grow. I just had to edit my comments to a set # of characters in order to "Submit" this survey. This makes no sense. Do you want input or not? There is plenty of equity work to go around, but the old adage remains true -- you can have time or money, but not both. It would be nice to see outside the Portland area on what businesses are doing. I have been hampered by the failure of the US Patent Office to grant a patent on my invention. My company failed mainly because we had the wrong team in place - we raised $500,000, had a great idea and 4000 online customers. The company failed because we were first-time entrepreneurs (as most people are in the start-up world). The key is finding a way to match-up the idea people with the executive talent. Again, I have a lot of opinions. I think though that I'll save them for a blog or a focus group. Thats enough thank you Nope. It is not for the faint of heart! Assembling and motivating wonderfully talented people to achieve a common goal. When it all comes together and what you built is humming along better than you ever thought it could... and those people are running it for you. Pure magic. I would like this survey be made available to the public when completed. We are one of the very few Inc 500, Inc 5000 companies in the state of Oregon. Never has anyone been wise enough to pay attention to what we did, what we are doing and what we will do. We are among the best in the nation. Study us or study other Inc. companies and repeat what they did how they did it and promote the ones that rise to the top. Stop mixing the blender trying to find so many new ones, use mentorship and have the best help the best. The companies that are part of the non-profit organization StarveUps is the single best kept secret in Portland. It is a fantastic success story, yet no one in the City talks about, or promotes, it. If the mayor or City would invest more in promoting businesses and success stories you'd see a lot more good things happen to PDX businesses. My best lessons have been that I can't do it by myself. You need a team to pull these BHAG's off. We need to get people to dream again. You can't live a perfect day without doing something for someone who will never be able to repay you." - John Wooden (1910 - 2010)

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Appendix C: List of Study Contributors


Allen Alley Scott Keeney Jon Altman Melissa Appleyard Ken Barker Gerald Baugh* Paul Bissett Sam Blackman Dana Bostrom* Jamin Brazil Thomas Brooke Jason Brauser Rich Bruer* Ryan Buchanan Brent Bullock John Castles Dave Chen David Childers Matt Compton Bruce Davis Bob Dekoning Harry DeWolf Augusto Dias Carneiro Carolynn Duncan Wayne Embree William Etheridge Randy Evans* Les Fahey Chris Fenner Holly Files Ben Finklea Danielle Forsyth Diane Fraiman Josh Friedman Rene Fritz Jason Graham-Nye Ken Gregory Mark Grimes Shelley Gunton Bill Hart* Chris Harter Bruce Helberg Dave Hersche Ken Hood Vail Horton John Hull Jim Huston Angela Jackson James Johnson Nitin Khanna Ray King Erik Krieger Scott Kveton Jerry Langeler Rob Langstaff Sean Larkin Irving Levin Jay M. Lindquist Greg Love Brenda Malteceh Kevin Macgillivray Tammy Marquez Steve Marsh Kerri Marshall* Joe Micallef Robert Monaghan Curt Mudd Verne Naito Matt Nees Skip Newberry* Bill Newman Hal Newton Jennifer Nolfi* Roy Notowitz Mike Parrott Nels Paine Julie Pickens Bill Pierznik Valerie Plummer Jim Plymale Dennis Powers Eric Pozzo Arun Pradhan David Price Patrick Quinton* Eric Rosenfeld* Brian Roter Roberto Santiago Dick Sass Greg Semler Dudley Slater Glenn Smith Duane Sorenson Lynor Stevenson Tim Stout Steve Strauss Sandra Suran Joe Tang Joe Tanous Thomas Thurston Alex Tinker* John Tortorici Elliot Troutman Tom Turnbull* Rick Turoczy* Adam Ware Enrique Washington Dave Weiss Linda Weston* DJ Widmer Eric Winquist Aric Wood Mike Wright Alex Yoder Justin Yuen Tony Zingale Brad Zenger

* Denotes member of the Study advisory group.

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Appendix D: Resource List


2005-2006. Fastest Job Growth by MSA - Top 100. 6 October 2010 <http://www.greateryuma.org/pdfs/JobGrowthTop100in2006.pdf>. 2010: A Check-Up on the Portland-Region's Economic Health. Portland Business Alliance. Portland, 2010. A Resource Guide for Technology-based Economic Development: Positioning Universities as Drivers, Fostering Entrepreneurship, Increasing Access to Capital. State Science and Technology Institute. Aug. 2006. 15 Dec. 2010. <http://www.eda.gov/PDF/2006%20Resource%20Guide%20Report.pdf. "An Overview of San Francisco's Recent Economic Performance." 2006. City of San Francisco Web Site. 8 October 2010 <www.sfgov.org/.../ExecutiveSummary_EconomicPerformanceReview.pdf>. "Access to Business Capital Act will help create and expand small businesses." Oregon Senate Democrats. 23 Feb. 2010. 15 Dec. 2010. <http://www.orsenatemajority.org/press-releases/access-tobusiness-capital-act-will-help-create-and-expand-small-businesses#more-2006>. Adena Ventures. Venture Capital in Underserved Areas. Presentation to Midwest Venture Forum. 19 Feb. 2009. 15 Dec. 2010. <http://www.mvforum.com/documents/MVF_Adena_FINAL.pdf>. Agenda and Initiative Guide. Leadership Summit 2004. 6 Dec. 2004. 15 Dec. 2010. <http://oregonbusinessplan.org/pdf/2004%20Initiative%20Guide.11.pdf>. Association of University Technology Managers, report titled, AUTM U.S. Licensing Activity Survey, FY2008: Survey Summary, edited by Robert Tieckelmann, Ph. D., Richard Kordal, Ph.D., and Arjun Sanga, J.D. Battelle/BIO State Bioscience Initiatives 2010. Biotechnology Industry Organization. 17 Dec. 2010. <http://www.bio.org/local/battelle2010>. Breznitz, Shiri M., Rory P. O'Shea, and Thomas J. Allen. University Commercialization Strategies in the Development of Regional Bioclusters. The Journal of Product Innovation Management. 2008. p. 129-142. <http://www.spp.gatech.edu/faculty/faculty/doc/University_Commercialization_Strategies-Breznitzand-Oshea.pdf>. Brush, Candida, Amanda Elam, and Elaine Allen. 2008 Babson Entrepreneurship Monitor for the Commonwealth of Massachusetts. Commonwealth of Massachusetts; Babson Entrepreneurship Monitor. 2008. 15 Dec. 2010. <http://www3.babson.edu/ESHIP/researchpublications/upload/GEMMA08EntMon.pdf>. Campbell, Bill. Restarting local investment industry will benefit Oregon. OregonLive.com. 19 Sept. 2009. 15 Dec. 2010. <http://www.oregonlive.com/opinion/index.ssf/2009/09/restarting_local_investment_in.html>.

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Cannice, Mark V. "University of San Francisco Web Site." 2009. Silicon Valley Venture Capitalist Confidence Index - 2009. 6 October 2010 <http://www.denovovc.com/articles/Cannice_VC_Index_2009_Q3.pdf>. Chichcernea, Doina, et al. 6 September 2007. A Cross Sectional Analysis of Cap Rates by MSA. 6 October 2010 <http://www.kelley.iu.edu/bcres/files/research/ChicherneaEtAl.pdf>. "Civic Economics Web Site." 2007. San Francisco Retail Diversity Study. 6 October 2010 <http://www.civiceconomics.com/SF/SFRDS_Summary_May07.pdf>. Cortright, Joseph. The Athletic and Outdoor Industry Cluster. Portland Development Commission. Oct. 2010. 16 Dec. 2010. <http://pdxeconomicdevelopment.com/cluster-activewear.html>. "Cultivating Oregon's High-Potential Businesses." HB 3644. Web. <oregon-microbiz.org/wpcontent/uploads/.../3644-Economic-Gardening.pdf>. DeVol, Ross C. et al. "Best-Performing Cities 2010: Where America's Jobs are Created and Sustained." Milken Institute. Oct. 2010. 15 Dec 2010. Economic Gardening: Next Generation Applications for a Balanced Portfolio Approach to Economic Growth. United States Small Business Adminstration. 15 Dec. 2010. http://www.sba.gov/advo/research/sbe_06_ch06.pdf Edmiston, Kelly. "Federal Reserve Bank of Kansas City Web site." The Role of Small and Large Businesses in Economic Development. 8 October 2010 <www.kansascityfed.org/publicat/econrev/pdf/2q07edmi.pdf>. Ewing Marion Kauffman Foundation . Ewing Marion Kauffman Foundation General Website. 2010. 6 October 2010 <http://www.kauffman.org/Section.aspx?id=Research_And_Policy>. Fairlie, Robert W. "Kaufman Index of Entrepreneurial Activity." April 2009. Ewing Marion Kauffman Foundation Web site. 6 October 2010 <http://www.kauffman.org/uploadedfiles/kiea_042709.pdf>. Fishback, Bo. A New Model To Catalyze a Movement of High-Growth Entrepreneurs: Kauffman Laboratories for Enterprise Creation. Kauffman Foundation. 17 Dec. 2010. <www.kauffman.org/uploadedFiles/FishbackTBook09.pdf>. Florida, Richard. Creative Class Main Page. 2010. 6 October 2010 <http://creativeclass.com/#main>. Foundation, Edward Lowe. Second Stage Entrepreneurs. 6 October 2010 <http://www.edwardlowe.org/index.elf?page=ss&function=eg>. Francis, Mike. Intel's timely gesture. OregonLive.com. 27 Feb. 2010. 15 Dec. 2010. <http://www.oregonlive.com/opinion/index.ssf/2010/02/intels_timely_gesture.html>. Fruth, William H. "Economic Strength Rankings 2010." 2010. Policom Corporation Web site. 6 October 2010 <http://www.policom.com/metro.htm>. 71

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GEM 2001 RFP including APS Questionnaire. Global Entrepreneurship Monitor (GEM). 15 Mar. 2001. 16 Dec. 2010. GEM 2002 APS Questionnaire. Global Entrepreneurship Monitor (GEM). 11 Mar. 2010. 16 Dec. 2010. GEM 2003 APS Questionnaire. Global Entrepreneurship Monitor (GEM). 18 Feb. 2003. 16 Dec. 2003. GEM 2004 RFP including APS Questionnaire. Global Entrepreneurship Monitor (GEM). 10 Mar. 2004. 16 Dec. 2010. GEM 2005 APS Questionnaire. Global Entrepreneurship Monitor (GEM). 24 Feb. 2005. 16 Dec. 2010. GEM 2006 APS Questionnaire. Global Entrepreneurship Monitor (GEM). Feb 2006. 16 Dec. 2010. Gibbons, Christian. City of Littleton Web site: Business/Industry Affairs. 6 October 2010 <http://www.littletongov.org/bia/economicgardening/>. Greenlight Greater Portland. Greater Portland-Vancouver Industry and Human Capital Trends. 16 Mar. 2008. Haltiwanger, John C., Ron S. Jarmin, and Javier Miranda. Who Creates Jobs? Small vs. Large vs. Young. The National Bureau of Economic Research. 18 Aug. 2010. 15 Dec. 2010. <http://www.nber.org/papers/w16300>. Heying, Charles. Brew to Bikes: Portland's Artisan Economy. Portland: Ooligan Press, 2010. HYPE & Agenda 360. "Cincinnati USA's Talent Handprint." 2009. Cincinnatti USA Regional Chamber Web site. 8 October 2010 <www.cincinnatichamber.com/.../z.../HypeCincinnatiHandprintReport.pdf>. James, R. Barth, Glenn Yago and Betsy Zeidman. "Publications: Barriers to Entrepreneruship in Emergying Domestic Markets: Analysis and Recommendations." April 2006. Milken Institute Web site. 6 October 2010 <https://www.businessgrowthinitiative.org/KeyPracticeAreas/Documents/Barriers%20to%20Entreprene urship%20in%20Emerging%20Domestic%20Markets.pdf>. John C. Haltiwanger, Ron S. Jarmin, Javier Miranda. "WHO CREATES JOBS? SMALL VS. LARGE VS. YOUNG." August 2010. NBER Working Paper Series. 8 October 2010 <http://www.nber.org/papers/w16300>. Josephson, Alec and Jensen, Carsten. The Dimensions and Contributions of the Bioscience Industry in Oregon in 2009. Oregon Bioscience Association. 11 Nov. 2010. 17 Dec. 2010. <http://www.oregonbio.org/Portlas/0/docs/News/2009_Econ_impacts_11_11_2010-FINAL.pdf>. Kane, Tim. "The Importance of Startups in Job Creation and Job Destruction" Kauffman Foundation Research Series. July 2010. 15 Dec. 2010. <http://www.kauffman.org/uploadedFiles/firm_formation_importance_of_startups.pdf>. 72

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Keating, Raymond J. "Business Tax Index 2010: Best to Worst Tax Systems for Entrepreneurship and Small Businesses." 2010. Small Business and Entrepreneurship Council Web Site. 6 October 2010 <http://www.commerce.wa.gov/uploads/business_tax_index_2010_SBE.pdf>. Kerr, Edward L. Glaeser and William R. "Harvard Kennedy School: Rappaport Institute for Greater Boston." February 2010. What Makes a City Entrepreneurial? 8 October 2010 <www.hks.harvard.edu/rappaport/downloads/policybriefs/entrepreneurs.pdf>. Kerr, William R., Josh Lerner and Antoinette Schoar. "The Consequences of Entrepreneurial Finance: A Regression Discontinuity Analysis." 15 April 2010. Harvard Business School: Woking Knowledge-A First Look at Faculty Research. 6 October 2010 <http://hbswk.hbs.edu/item/6347.html?wknews=041910>. Leichenko, Robin M. "Growth and Change in the U.S. Cities and Suburbs." Growth and Change 2001: 326-354. Liveable city, A.I.B.A., and Civic Economics. "Economic Impact Analysis: A Case Study Local Merchants vs. Chain Retailers." December 2002. Liveable City; Civil Economics. 8 October 2010 <www.liveablecity.org/lcfullreport.pdf >. Matrix of Portland Area Business Assistance Providers. Portland Development Commission. 16 Sept. 2010. 15 Dec. 2010. <http://www.pdc.us/pdf/bus_serv/ned/roundtable/Small-Business-ServicesMatrix.pdf>. Merrill Lynch. "World Wealth Report." 2008. Merill Lynch Web Site. 6 October 2010 <http://www.ml.com/media/100472.pdf>. "Metropolitan Area Comparison Table: Income." 2000. US Census 2000. 2010 October 2010 <http://www.metrocouncil.org/census/MetroComparisons/MetroComparisons_income.pdf>. MoneyTree Report. PricewaterhouseCoopers. Web. 16 Dec. 2010. MoneyTree Report. "Q1 2010 US results." PricewaterhouseCoopers. 16 Apr. 2010. 15 Dec. 2010. <pwcmoneytree.com>. Neiman, Max and Daniel Krimm. "Publications: Economic Development: The Local Perspective." May 2009. Public Policy Institute of California. 6 October 2010 <http://www.ppic.org/content/pubs/report/R_509MNR.pdf>. Nemececk, Tammie. Naples News . 22 May 2010. 8 October 2010 <http://www.naplesnews.com/news/2010/may/22/guest-commentary-economic-gardening-alreadyreapin/>. NETS Database by Walls & Associates. YourEconomy.org. Edward Lowe Foundation. 19 Feb. 2010. 15 Dec. 2010. <http://youreconomy.org/nets/?region=walls>.

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Norris, Floyd. The Jobs News Gets Worse. NYTimes.com. 3 Oct. 2009. 17 Dec. 2010. <http://www.nytimes.com/2009/10/04/weekinreview/04norris.html?_r=1>. "Our Region's Future Funding: The Transfer of Wealth in San Diego County Over the Next 25 Years." 2009. San Diego Foundation Web Site. 6 October 2010 <http://www.energizingentrepreneurs.org/content/images/File/Formal%20and%20Final%20San%20Die go%20Transfer%20of%20wealth%20study-%20pdf.pdf>. Patents by Country, State, and Year - All Patent Types (December 2009). U.S. Patent and Trademark Office. 20 Apr. 2010. 15 Dec. 2010. <http://www.uspto.gov/web/offices/ac/ido/oeip/taf/cst_all.htm>. PDC: PDC Cluster Profiles. Portland Development Commission. 15 Dec. 2010. <http://www.pdc.us/pubs/inv_detail.asp?id=932&ty=46>. PDC Sustainability Report. Portland Development Commission. 15 Dec. 2010. <http://www.pdc.us/pubs/inv_detail.asp?id=923&ty=23>. PDC: Target Industry Fact Sheets. Portland Development Commission. 15 Dec. 2010. <http://www.pdc.us/pubs/inv_detail.asp?id=654&ty=46>. Porter, Michael E. Monitor Group: Council on Competitiveness; Clusters of Innovation: Regional Foundations of U.S. Competitiveness. 2008. 8 October 2010 <http://www.compete.org/publications/detail/220/clusters-of-innovation-initiative-regionalfoundations-of-us-competitiveness/>. Portland Economic Development Strategy. Portland Development Commission. 15 Dec. 2010. <http://pdxeconomicdevelopment.com/index.html>. Rede, George. Invest locally? Not in Oregon. OregonLive.com. 5 Sept. 2009. 15 Dec. 2010. <http://www.oregonlive.com/opinion/index.ssf/2009/09/invest_locally_not_in_oregon.html>. "Regional Comparison Study." 2004. Miami Valley Regional Planning Commission Web site. 6 October 010 <http://docs.mvrpc.org/msa/msaGrandRapidsMI.pdf>. Request for Proposals #09-28for Research and Analysis: State of Entrepreneurship in Portland, Oregon. Portland Development Commission. Feb. 2010. 15 Dec. 2010. <http://pdc.us/pdf/rfps/2010/RFP-09-28State-of-Entrepreneurship.pdf>. Rommelmann, Nancy. Is Portland the new Neverland? OregonLive.com. 29 Nov. 2010. 17 Dec. 2010. <www.oregonlive.com/opinion/index.ssf/2010/11/is_portland_the_new_neverland.html>. Ross C. DeVol, Armen Bedroussian, Kevin Klowden, and Candice Flor Hynek. "200 Largest Metros List." November 2009. Milken Institute Main Web site. 2010 October 2010 <http://www.milkeninstitute.org/pdf/bpc2009.pdf>.

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Salt Lake City Corporation. "Salt Lake City Corporation." 2007. Salt Lake City Corporation: Economic Development. 8 October 2010 <www.slcgov.com/ed/pdfs/peercity.pdf>. Schramm, Carl J. State of Entrepreneurship Address. Ewing Marion Kauffman Foundation. 19 Jan. 2010. 15 Dec. 2010. < http://www.kauffman.org/uploadedfiles/state_of_entrepreneurship_2010.pdf>. Schwalb, Micah. Higher Education & Entrepreneurship in Colorado. The Silicon Flatirons Center. 4 Nov. 2009. 15 Dec. 2010. <http://www.siliconflatirons.org/documents/publications/policy/SchwalbHigherEdEntrepreneurshipColorado.pdf>. Silicon Flatirons: A Center for Law, Technology, and Entrepreneurship at the University of Colorado. 2009 Annual Report. <http://www.silicon-flatirons.org/documents/misc/SFCAnnualReport2009.pdf>. Solis, Hilda L. and Hall, Keith. Employment and Wages Annual Averages, 2008. U.S. Department of Labor and U.S. Bureau of Labor Statistics. Mar. 2010. 15 Dec. 2010. <http://www.bls.gov/cew/ew08chartsandmaps.pdf>. Spawning Technological Breakthroughs and Entrepreneurship. <http://www.compete.org/publications/detail/1319/spawning-technological-breakthroughs-andentrepreneurship/> -or- http://www.compete.org/images/uploads/File/PDF%20Files/CoC__Pillar_5_Handout_-_Spawning_Technological_Breakthroughs_and_Entrepreneurship,_Dec09.pdf State Millionaires 2006. 2006. 6 October 2010 <http://www.netstate.com/states/tables/state_millionaires_household.htm>. State Science & Technology Institute. Web. 16 Dec. 2010. <www.ssti.org>. The Future of the Research University: Meeting the Global Challenges of the 21st Century. Ewing Marion Kauffman Foundation. 8 Jun. 2008. 15 Dec. 2010. <http://www.kauffman.org/uploadedFiles/planck_book_110408.pdf>. The Information Technology & Innovation Foundation. http://www.itif.org/files/Oregon.pdf The Oregon Business Plan: A Guide for the 2005 Legislature. OregonBusinessPlan.org. <http://oregonbusinessplan.org/pdf/2005%20OBP%20Legislative%20Guide%20Final.pdf>. The Rise of the Creative Class: And How It's Transforming Work, Leisure, Community and Everyday Life. Basic Books, 2003. The Small Business Financing and Investment Act, H.R. 3854. The Workforce Mobility Association. "Primacy." 2008. Best Cities for Relocating Families. 2010 October 2010 <http://www.primacy.com/resources/BestCitiesFamily2008.pdf>. The Young and the Restless: How Portland Competes for Talent. 15 Dec. 2010. <http://www.pdc.us/pdxleadingitlivingit/reference/Young_and_Restless.pdf>. 75

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Thompson, Edmund R. "Individual Entrepreneurial Intent: Construct clarification and Development of an Internationally Reliable Metric." Entrepreneurship Theory and Practice May 2009. U.S. House. 2009. Small Business Financing and Investment Act of 2009. 111th Cong., 1st sess. H.R. 3854. Wahrgren, John. Benchmarking Business Oregon Financing Services. 4 Dec 2009. Western States Arts Federation. "City of Denver Web Site." 2007. City and County of Denver Creative Vitality Index. 8 October 2010 <www.denvergov.org/.../FINAL%20CVI%20FOR%20WEBSITE.pdf >.

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Endnotes
i

Source: U.S. Small Business Administration, Office of Advocacy, from data provided by the U.S. Census Bureau, Business Dynamics Statistics (http://www.ces.census.gov/index.php/bds). (BDS_by_AGE_national.xls)
ii

Source: U.S. Dept. of Labor, Bureau of Labor Statistics, Business Employment Dynamics; Advocacy-funded research by Zoltan Acs, William Parsons and Spencer Tracy, 2008 (www.sba.gov/advo/research/rs328.pdf)
iii

Stangler, Dane, and Litan, Robert E. Where Will the Jobs Come From? Kauffman Foundation Research Series: Firm Formation and Economic Growth. Nov. 2009. 15 Dec. 2010. <http://www.kauffman.org/uploadedFiles/where_will_the_jobs_come_from.pdf>.
iv

Shane, S (2008) The Illusions of Entrepreneurship: The Costly Myths That Entrepreneurs, Investors, and Policy Makers Live By. Yale University Press.
v

Cortright, J., & Mayer, H. (2000). The Ecology of the Silicon Forest. Portland, OR: Institute for Portland Metropolitan Studies, Portland State University.
vi

Cortright, J. (2010). The Athletic and Outdoor Industry Cluster: A White Paper. Portland: Portland Development Commission.
vii

Data on Fortune 500 companies from: http://money.cnn.com/magazines/fortune/fortune500/2010/ http://www.pdx.edu/ims/silicon-forest-universe

viii

ix

http://pdxeconomicdevelopment.com/docs/activewear/Athletic-and-Outdoor-Industry-Poster.pdf

Source: U.S. Dept. of Commerce, Census Bureau, Survey of Business Owners; Advocacy-funded research by Open Blue Solutions, 2007 (www.sba.gov/advo/research/rs291.pdf) and Office of Advocacy. The Small Business Economy (Table A.13, www.sba.gov/advo/research/sbe.html).
xi

Data on Self Employment from Census Bureau, American Community Survey, tabulations obtained from University of Minnesota Integrated Public Use Microsample (IPUMS).
xii

Glaeser, Edward L. Entrepreneurship and the City. Harvard University and NBER: Harvard Economics. 17 October 2007. 6 October 2010 http://www.economics.harvard.edu/faculty/glaeser/files/ENTREPRENEURSHIP%20AND%20THE%20CITY%20%2010.17.07.pdf>.
xiii

Estimates from the Bureau of Economic Analysis, Regional Economic Information System, for 2008, for the Portland-Vancouver-Hillsboro MSA. http://www.bea.gov/regional/reis/.
xiv

Data on Self Employment from Census Bureau, American Community Survey, tabulations obtained from University of Minnesota Integrated Public Use Microsample (IPUMS).
xv

Shane, Scott, 2009. Fool's Gold?: The Truth Behind Angel Investing in America. Oxford University Press.

xvi

The PWC MoneyTree Report is a quarterly study of venture capital investment activity in the United States. It is a collaboration between PricewaterhouseCoopers and the National Venture Capital Association based upon data from Thomson Reuters. www.pwcmoneytree.com/

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State of Entrepreneurship In Portland April 30, 2011

xvii

While the Employment Department data are the best available records for tracking the contribution of newly established businesses to the regions economy, they were not designed as a business tracking system, and for technical reasons, these numbers represent a rough upper bound estimate of the contribution of newly established firms to regional job growth. The Employment Department tracks individual private firms by business identification number. The estimate of 18,600 firms established in 2004 or later, and surviving to 2009 is based on firms assigned new employer identification numbers. In the case of mergers, acquisitions, divestitures and some other ownership changes, some existing establishments or firms can be assigned new business identification numbers. This tends to increase the apparent number of newly established businesses by an unverifiable amount.

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