December 3, 2014
FOR IMMEDIATE RELEASE
Media Contact:John A. Charles, Jr. 503-242-0900 [email protected]
PORTLAND, Ore. – A new report released by Cascade Policy Institute concludes that the managers of the publicly financed Portland Seed Fund cannot provide documentation to show any positive return on investment for the millions of dollars spent on risky start-up ventures.
The Portland Seed Fund is a public-private venture intended to close a funding gap for entrepreneurs. It invests $25,000 in each startup selected and reserves money for follow-up investments as well. The City of Portland, the City of Hillsboro, and the State of Oregon (through the Oregon Growth Account) supplied most of the money for the first Seed Fund and a significant portion of the second Seed Fund. So far, the public funds amount to $3.4 million, with another $100,000 likely to come from this year’s Portland Development Commission (PDC) budget. The City of Portland and the Oregon Growth Account are the two biggest supporters, each contributing $1.5 million or more.
The Portland Seed Fund has spent large amounts of taxpayer money to subsidize private-for-profit companies, yet governments which gave money could not provide information about the success of those expenditures when questioned by Cascade researchers. It is not even clear that there are any defined expectations for this fund. Very little information is available, and the average taxpayer would have no way of knowing where tax funds are being spent. The Seed Fund is not even listed on the City of Portland’s Investment Reports.
Cascade President and CEO John A. Charles, Jr. commented, “The Portland Seed Fund allows politicians to play at being venture capitalists―without any of the personal risks that real venture capitalists bear. This is a misuse of taxpayer funds.”
The Cascade paper urges the City Councils of Portland and Hillsboro, and Oregon’s state legislators, to have public discussions about the Seed Fund, and either explain why tax funds are being spent on private companies or shut the Fund down.
Cascade Policy Institute is Oregon’s free market public policy research organization. Cascade promotes public policy solutions that foster individual liberty, personal responsibility, and economic opportunity. The full report, entitled The Portland Seed Fund: Planting High Hopes, Reaping Few Results, may be viewed here.
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