By Joel Grey
The Portland Seed Fund started as a public-private venture intended to close a funding gap for small loans to entrepreneurs. The City of Portland, the City of Hillsboro, and the State of Oregon provided a majority of the funds for the first Seed Fund and a significant portion of the second Seed Fund. It was sold as a way for public entities to help private companies begin, with the expectation that the Fund would earn money.
At this time, it is impossible to say whether the Fund has earned a profit because that information is not publicly available, and none of the public entities involved could give an answer when asked what the return on investment had been. The first person I contacted at the Portland Development Commission said the Seed Fund didn’t sound familiar. The City Budget Office also didn’t initially recognize the name of the Seed Fund, but a budget analyst eventually contacted someone at the PDC. However, that person has not responded.
The conclusion from all of these conversations is that there is little or no accountability in place to ensure that taxpayer money is being well spent, nor is there a way for taxpayers to see how their money is being spent.
Ultimately, there are professionals who risk private money in venture capital firms. Government entities shouldn’t play venture capitalists with taxpayer funds.
Joel Grey is a research associate at Cascade Policy Institute, Oregon’s free market public policy research organization.