Droplr, a Bend high-tech startup, continues to gain momentum and grow, but a lack of financial support from local investors has prompted the company to search for funding outside the region, its co-founder said.
The file-sharing company plans to open a second office in Portland, to reach potential investors, customers and tech talent.
“Investors around here need to step up,” said co-founder Josh Bryant. “I think there’s a lot of angel investors in Bend that pretend to be angel investors.
“They spend a lot of time in due diligence with companies and talking to companies, but there’s not a lot that actually write checks, so it’s forced us to go outside the region for a lot of our funding, which is unfortunate.”
The file-sharing company is concluding its first round of funding and has raised about $760,000 with investments from Seven Peaks Ventures and the Cascade Angels Fund, both based in Bend, Bryant said.
Droplr has filed three notices of exempt securities offerings with the U.S. Securities and Exchange Commission since May 2013.
The most recent, filed in May, had a total offering amount of $750,000, according to the SEC forms.
The No. 1 problem for startups is capital, said Brian Vierra, the venture catalyst for Economic Development for Central Oregon and an investor in both the Cascade Angels Fund and the Oregon Angel Fund.
“You can’t say that Bend has a funding problem,” he said. “There’s just in general a lot of demand for capital. People are investing here. Investors like to keep what they’re doing quiet. They’re not going to go out and publicize.”
He said there are different types of investment and those investments are tied to different levels of company growth.
“Most startups don’t get funded, that’s a fact,” Vierra said. “Droplr is not the norm. They’re an exceptional company and that’s how they were able to get funding.”
Bryant said he expects Droplr to have an exit — an acquisition where investors get a return on their investment — in the next two to three years.
And when that exit, or one from another local startup, happens, he believes it will encourage more local investors to support local startups.
On Tuesday, during a Bend Chamber of Commerce event, venture capitalist Dino Vendetti, of Bend, said when a startup has an exit, its founders typically start another company and its investors reinvest in the next wave of startup companies, which recycles wealth in the community.
Vendetti, the managing director of Seven Peaks Ventures, said the region needs to rally around and support startups if it is going to attract entrepreneurs.
“There’s other startup communities around the country that are putting their money where their mouth is and they’re putting their weight of the business community and the city behind this because they recognize that this is their future,” he said.
While Droplr plans to open a Portland office, Bryant said, its headquarters will remain in Bend.
“No matter what Droplr turns into, we’ll be here,” Bryant said. “We’re going to do another company if that day comes, and if a larger organization buys us at some point, we’d push really hard to keep operations here and keep building the company here.”