Any venture firm named after a rodent, especially the world’s biggest rodent (100 pounds), is OK in my book. But I did have to ask co-founder Eric Rosenfeld where the name Capybara Ventures comes from.
Rosenfeld explained that the capybara is a “majestic, noble, inspiring rodent.” It’s also a “category leader,” he added, and “spends most of its time beating the bushes” for food. It’s much like how he and fellow Capybara co-founder Bob Ward beat the bushes of Oregon looking for the next great company to fund.
Earlier this week, I dropped in on Rosenfeld at his office in Portland, OR, for a wide-ranging chat about his investment philosophy, the Portland tech scene, and the state of venture and angel capital in Oregon. Rosenfeld is a managing partner at Capybara Ventures, and is also a co-founder of the Oregon Angel Fund (which has seeded Portland companies like Elemental Technologies and RNA Networks). In April, he and Ward were also named venture partners with DFJ Frontier, a branch of Menlo Park, CA-based Draper Fisher Jurvetson. Let’s just say these guys are connected. They’re also Portland natives who have known each other since sixth grade.
Rosenfeld and Ward started Capybara Ventures in 2004. Since then, the firm has made investments in 10 companies, all early-stage, including RSS software startup Attensa, telecom networking firm Clear Access, and optical tech startup Phoseon. “We look for companies that are at the intersection of what grows well in Oregon, including semiconductors, electronics, Internet software, wireless communication, and where we have experience,” Rosenfeld says. He adds that Capybara’s seven active portfolio companies are doing between $3 million and $11 million in revenue this year, and about half are at cashflow break-even.
Here are a few highlights from our discussion:
Xconomy: Talk about your connections to other venture firms on the West Coast, especially with your recent DFJ Frontier relationship. Do you collaborate much with Seattle-area investors, for instance?
Eric Rosenfeld: We talk to them quite a bit. The ones we’re most close with are Buerk Dale Victor, Voyager Capital, and Madrona Venture Group. We collaborate quite a bit with the angel groups. The DFJ Frontier is a close relationship, but there’s nothing formal yet. They want to be active in Oregon. We have co-invested in one deal with them—Capybara and DFJ led a Series A round in Clear Access in Vancouver, WA. We hope to do more with them. They’ve been wonderful partners. They come up at least once a month, and we try to introduce them to companies they should know. They share their due diligence, we share our due diligence. We have a similar relationship with Walden Capital in the Bay Area.
X: What are your thoughts on the strengths and weaknesses of the Portland innovation scene, as compared to Seattle and Silicon Valley?
ER: When we started Capybara, the semiconductor industry here was more diverse and in better shape. It was Intel plus a whole ecosystem. It’s been a long time since we’ve had a startup really succeed in the semiconductor world. One company we’re involved with is Avnera, which does analog wireless audio chip sets. They’re doing very well, hopefully they’ll be the one that revives people’s confidence locally.
If you step back, Portland’s got an enviable quality of life which draws people from all over. That’s part of the solution. Our research universities are not necessarily world-class, and that’s hurt
