When Silicon Valley VC firm True Ventures first invested in Portland-based startups Puppet Labs and Urban Airship about four years ago, many had their doubts.
“People thought we were kind of crazy, honestly,” True Ventures’ Puneet Agarwal said. “There was a lot of misconception about Portland, at least back then. People thought we were insane.”
Agarwal, speaking on a panel this past Friday in Portland with Puppet Labs CEO Luke Kanies and Urban Airship CEO Scott Kveton, was asked what Portland startups should think about in terms of perception when looking for VC money, particularly in the Bay Area.
True Ventures, which invested in Series A rounds for Puppet Labs in 2009 and Urban Airship one year later, knew it found a big hole in the market when backing the Portland startups.
Still, though, it faced a lot of flack for its decision. Agarwal said that many criticized Portlanders for not having great work ethic and not wanting to work crazy hours like those in the Valley.
“But that has totally changed now,” he said. “It’s in large part due to [Kanies and Kveton] and all the great startups that have popped up here. … The perception of Portland is very strong now because of these guys.”
Kanies said that when he was first looking for funding, he’d run into several venture capitalists — many in Silicon Valley — who firmly believed that they needed to be within a 10 minute drive of companies they were investing in.
For him, though, leaving Portland was not really an option. Kanies had two small twins at the time, and staying in Portland was a priority.
“It was either doing it in Portland with whatever I could, or giving up hope,” he said.
Fortunately, Kanies ended up finding Agarwal and True Ventures. Four years later, his company has raised nearly $50 million while Portland’s startup scene flourished in the process.
Kveton, meanwhile, spoke about the latest generation of successful startups in Portland — Urban, Puppet, Elemental Technologies, Jama Software, among others — and how they’re mostly building platform or infrastructure solutions, rather than consumer plays like Instagram.
“We just don’t do that here,” Kveton said of the consumer-type companies. “Those that that do need to be in the Bay Area, where they’re most likely be acquired by a Facebook or Google. We’re building interesting, compelling businesses that stand on their own, no matter where they are. That’s the big difference with what’s happened here in the last five years.”
That mirrored Agarwal’s thoughts about successful companies sprouting up in places other than a traditional startup hub like Silicon Valley.
“We don’t believe in requesting that companies not based in Silicon Valley move to Silicon Valley,” he said. “There’s just a democratization in how startups are being built these days and great companies are being formed everywhere. We look at it as, where ever you are located, do you have some kind of unfair advantage, can you hire people there and can you do things that make yourself unique to you? If you can, and it’s best for your company, you should do it there.”
