Beaverton business incubator gets federal grants
Oregon Technology Business Center has received two federal grants to enable it to help business startups in Beaverton and launch investor programs elsewhere in Oregon.
OTBC, based in Beaverton, has helped more than 100 companies get started in the past 12 years.
The U.S. Small Business Administration awarded grants of $191,225 and $50,000 to OTBC.
The larger grant will enable OTBC to work with other Oregon economic development organizations during the next three years to develop programs similar to the Beaverton Startup Challenge. Under the Beaverton challenge, which is in its fifth year, OTBC and the city recruit people, known as "angel investors," willing to invest in five startup companies. In the latest round, 48 companies have applied for five investments — each worth $25,000 — plus office space, mentoring, networking and other services for a year. The five recipients will be announced later this year.
During the past four years, OTBC's Beaverton Startup Challenge has invested in 20 companies that have attracted a total of $20 million more from other sources.
"We are trying to replicate our success with the Beaverton Challenge for the past four years," said Jim McCreight, OTBC director of strategic partnerships. "The success of that program has resulted in economic development organizations around Oregon wanting to find out not only how that works, but how we can help them replicate it on a smaller scale in rural Oregon."
The organizations that OTBC will help in the coming year are SEDCOR (Strategic Economic Development Corp.), based in Salem and serving the Mid-Willamette Valley; SOREDI (Southern Oregon Regional Economic Development Inc.), based in Medford and serving Jackson and Josephine counties, and Umpqua Business Center and Umpqua Economic Development Partnership, based in Roseburg and serving Douglas and Coos counties.
Other organizations and communities will follow in the second and third years of the federal grant.
"The need for capital to start and grow a business in rural Oregon is really critical," McCreight said. "But there are few programs to address that need. We think we are one of the first to come up with a practical solution to meet the need for investment in startups in rural Oregon."
McCreight said capital and business services are readily available in the Portland metropolitan area and Central Oregon, but not as apparent in other areas. He said the immediate goal is for each of the three organizations aided by OTBC to raise $10,000 for each of three startups — a total of $30,000 — in contrast with the $25,000 OTBC plans for each of five startups.
"This is further evidence that OTBC is being recognized for their contributions to innovation and entrepreneurship," Mayor Denny Doyle said. "There is confidence in OTBC's ability to expand their mission and impact."
McCreight also said aid is in the form of helping the organizations identify potential investors, known as "angel" investors, and advise them what to look for in their investments.
"Rural Oregon has a lot of potential investors but there has not been a lot of opportunities for them to invest," he said. "We thought it would be helpful to train them in what to look for in a good entrepreneurial idea that might be a good investment."
The smaller grant of $50,000 will enable OTBC to work with business startups to seek specific grants from the Small Business Administration. The Small Business Innovation Research program and the Small Business Technology Transfer program help startups research and develop products that will enable them to grow.
McCreight said business grants under the first program are in the range of $50,000 to $100,000, and under the second program, they can be in the hundreds of thousands.
"When people come to us and ask if there is free money, that is about the closest thing there is," he said. "The end point, after the research is done, is to come up with a viable marketable product."
But he also said small entrepreneurs, who already face other startup challenges, often are reluctant to seek federal grants.
"Sometimes it is an intimidating process for the average entrepreneur," McCreight said, although once a business launches a salable product, it can recoup its investment many times over. One Beaverton company, eWind Solutions, raised nearly $1 million after going through the process.
McCreight said OTBC was one of just 60 business incubators across the nation to win these grants from SBA. Though he was unsure how many applied for the grants this year, he said there were 600 applicants last year.
Jeremy Field, SBA's Pacific Northwest regional administrator, said the grants help business incubators such as OTBC to promote innovation.
"Innovation is one of our strongest tools for problem solving and job creation," Field said. "We believe it's a sound investment in our economy and our region's future."
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