JumpStart: IdeaExchange Blog

Last week I attended an event that certainly would make anyone marvel at the entrepreneurial spirit, enthusiasm, and activity happening in Northeast Ohio. Goldstein Caldwell & Associates and TiE Ohio jointly sponsored the Portfolio Showcase at GCA’s new offices on Carnegie Ave, between the Cleveland Clinic and Case. GCA is a seed capital investment and business Development Company focused on very early (pre-seed) stage companies. TiE is the Ohio chapter of the global TiE network, a group that fosters entrepreneurship by focusing on immigrant, international, and minority entrepreneurs.

I went to the event expecting 30-40 investors, entrepreneurs and other interested parties who would network and hear presentations from a few promising local entrepreneurs. Instead, there were well over 200 people, somehow fit into this former flower shop. The event was outstanding! The networking was great, with a wide variety of people to interact with. The presentations were punchy, interesting, and ran on-time. The food and drink was excellent (until it ran out with the huge attendance). All in all, the TiE/GCA Portfolio Showcase was a huge success and a great testament to the vitality of Northeast Ohio’s growing entrepreneurial climate and the enthusiasm for high growth entrepreneurship here.    

The location of the event was interesting as well. GCA has converted a flower shop that is scheduled to be demolished into a really edgy “incubator-type” space, with some entrepreneurs getting to locate in the former flower cooler (I am not sure if that is considered to be prime space, or where the newbies get stuck!). You may have noticed that I said “IS scheduled to be demolished”. Todd Goldstein of GCA told me that, although the price was right (free!), the tradeoff is that the demolition will go forward sometime at the end of the year, and that GCA will be again looking for space to continue their work. If anyone knows of another space that might work for them, or if you are an early-stage company in need of startup space, please get a hold of Todd.

Here at JumpStart, we work hard at, and are very active in contributing to building an entrepreneurial climate and ecosystem here in Northeast Ohio, and we have lots of events to promote that. We don’t, however, need to be in the center of all such events, and it was really nice to see the TiE/GCA event go so well, and put the enthusiasm this region has for entrepreneurship on display. Congratulations and thanks to TiE and Goldstein Caldwell on a great job!

Chris Mather is President, JumpStart Entrepreneurs-in-Residence. Previously, he managed a number of technology initiatives in Northeast Ohio for NorTech. Before entering the economic development world, Chris ran a number of technology companies in Northeast Ohio and New England, including Ion Optics Inc., where he raised $6.7 million in venture capital, and Apsco Inc. and Gould Instrument Systems. Prior to that, he spent 13 years in sales, marketing and management roles with Hewlett Packard after graduating from Worcester Polytechnic Institute with a BS in Electrical Engineering.

Over the past few weeks, we marked an anniversary of sorts in the Northeast Ohio entrepreneurial development ecosystem. Three years ago, funding began to flow to create the Northeast Ohio Entrepreneurial Signature Program (ESP), and its flagship new program, TechLift. This funding came from Ohio’s Third Frontier Program with the explicit goal of significantly enhancing entrepreneurial outcomes in Northeast Ohio as well as other regions of the state. Interestingly, I am writing this “look back”, just as the voters of Ohio “look forward” to decide on May 4th whether to approve future funding for Third Frontier that would continue to support such entrepreneurial development programs into the future. 

The TechLift concept was influenced by my experience as a part time Entrepreneur-in-Residence (EIR), coaching companies through the JumpStart ASSIST process. Through this process, we worked with companies to ensure that they were “putting their best foot forward” in presenting to JumpStart for funding consideration. We helped the companies hone their message, coached them through strategy, key plans, milestones, market considerations, and other issues facing startups. Three things jumped out at me from this experience that became key to TechLift’s approach:

• Coaching Counts — Companies could make significant progress working with someone who has “done it before”, even in a relatively short period of time.
• The Technology Matters — A coach or mentor who understands the technology or market area that a company plays in can help them progress much further and faster.
• We Needed To Do More — The reality of JumpStart’s funding and model meant that, by definition, we couldn’t possibly fund or provide ongoing support to all of the companies who showed promise.

With a modest amount of funding from Third Frontier, as well as the Burton D. Morgan Foundation, TechLift hired five EIRs focused on Ohio’s five key technology areas: Energy, Electronics, BioSciences, IT, and Advanced Materials. To be considered as an EIR, a candidate had to have the following:

• Significant experience in the specific technology area
• Been a founder or CEO of a startup
• Raised money, preferably venture or angel funding, for a small company

TechLift’s first EIR started in May 2007, and the other four were added throughout that year. One, Ron Zieske, subsequently became CEO of a local company and was replaced by Vinny Gupta. The results have been stupendous: over $25 million in state verified follow-on funding, and over $50 million if you count the companies that were coached by TechLift and went on to receive or be considered for JumpStart Ventures investment. Additionally, the TechLift group has been a centerpiece of the tremendous growth of the Northeast Ohio technology entrepreneurial ecosystem, working with many others including: The Innovation Fund, Cuyahoga County’s North Coast Opportunities Fund, the incubators of NEOinc, BioEnterprise, and many others. This central role was made stronger in 2009, when TechLift became a part of JumpStart, as JumpStart TechLift Advisors. As a result, JumpStart’s offering to the community has been significantly broadened.

By far, the biggest contribution made by JumpStart TechLift Advisors is the direct coaching of entrepreneurs — helping them to define their business plan and approach, guiding them through the funding opportunities in the region and beyond, and sometimes telling them the things they don’t necessarily want to hear (but need address in order to grow). Here are just a few examples of real scenarios that show the difference JumpStart TechLift EIRs have made. They:

• took a materials company that was generally thought to be “stale, with no chance for funding” and helped them re-define themselves, attract capital, attract new management, and start over. The company has raised money, and could be one of the region’s ‘bright stars’ in the future.
• identified a great cleantech technology at a university, connected them to the right people to get started with commercialization, and helped them acquire seed capital. Since then, the company has attracted a new CEO and significant capital, and is also on the way to being one of the regions ‘stars’.
• helped an electronics company, that had previously been turned down for capital, to re-form its capital base, turning debt into equity, and giving the company a new lease on life.
• recognized a high potential CEO and idea in an IT company. Then, the team worked with the company to hone the message and tighten the business plan, so it could go on to raise the money it needed to develop the idea.
• coached a medical device company to attract capital from both inside and outside the region, after they had previously been turned down by some of the early-stage funders in the region.

These are just a few examples of how the coaching from JumpStart TechLift EIRs has lead to measurable results, and a better entrepreneurial climate for Northeast Ohio. The great thing is that I could list 10 times as many examples. The coaching and the process works!

Economic development positions can be somewhat fleeting, somewhat by definition. What the best economic development people bring to the table is their ‘real world’ experience. Paradoxically, the longer someone is in one of these positions, the more removed that experience becomes. When one does a job where you ‘give back’ to the community, you mostly hope that what you do during that time actually makes a difference. The TechLift EIR team of Kent Kristensen, Ron Zieske (TechLift alumnus), Donna Richardson, Chuck Birchall, Dave Nestic, and Vinny Gupta, can look back at the TechLift experience with pride, knowing that they have truly “made a difference” for Northeast Ohio, its economic revitalization, and its entrepreneurial community.

As you contemplate your vote on Issue 1, to renew and continue the Third Frontier program in the May 4th election, please consider how important Third Frontier funding is to programs like TechLift Advisors, as it enables JumpStart and others to provide such support and funding to Ohio’s current and future entrepreneurs. Vote YES on Issue 1!

Chris Mather is President, JumpStart Entrepreneurs-in-Residence. Previously, he managed a number of technology initiatives in Northeast Ohio for NorTech. Before entering the economic development world, Chris ran a number of technology companies in Northeast Ohio and New England, including Ion Optics Inc., where he raised $6.7 million in venture capital, and Apsco Inc. and Gould Instrument Systems. Prior to that, he spent 13 years in sales, marketing and management roles with Hewlett Packard after graduating from Worcester Polytechnic Institute with a BS in Electrical Engineering.

Any entrepreneur looking to grow their business is always thinking (or should be) about how to improve their investor pitch. Once you have an opportunity to get in front of an investor, you want to do everything you can to make your pitch successful. I offered some tips I’ve learned during my years coaching entrepreneurs in my post, ‘Things NOT to Do When Presenting to Potential Investors‘. Last week, a fellow blogger, Timothy Hay posted ‘Entrepreneurs’ Most Common Mistakes When Pitching VCs‘, offering some great builds on the ideas I’d shared.

Some of the key mistakes he shares, and my thoughts on each:

1. Not at least considering the potential of taking your company public someday. - Although IPOs are about as common as Browns playoff appearances these days, shaping your company so that it could conceivably go public is a great way to ensure that you are touching all the bases and thinking big enough. And… you never know… the Browns might make the playoffs, and you could be a candidate for an IPO.

2. Being overconfident. - If you remember, I said in my post that ‘Not Bragging’ is a mistake. You DO need to be confident, knowledgeable and sell yourself and your team. You shouldn’t be overconfident, and act like you have all the answers, however — the VC knows that you don’t. And besides, VCs have big egos — if anyone has all the answers, it will be them! Be sure to be willing to say that you “don’t know” or that you are “unsure” to certain questions, while accepting suggestions from the investors — they have seen a lot of companies, and have a lot of knowledge to bring to the table. The trick is to be thought of as “confident”, but not “overconfident”.

3. Never being audited. - This is directly related to my mention of having your detailed financials prepared - and going a step further to have them audited. This shows potential investors that someone else has validated your books, and mitigates their risk and questions in this area. Despite that, do NOT put the detailed financials into your investor presentation — they don’t care at that point. When I was raising money for my company, Ion Optics, we handed interested investors a CD that had all of our slides, our more detailed business plan, audited financials, articles on the company and technology, and other tidbits. This showed attention to detail, and made the investor’s life a little easier.

Read Timothy’s full post - and share your questions and additions so we can continue to share the knowledge gained through our collective experiences.

Chris Mather is President, JumpStart Entrepreneurs-in-Residence. Previously, he managed a number of technology initiatives in Northeast Ohio for NorTech. Before entering the economic development world, Chris ran a number of technology companies in Northeast Ohio and New England, including Ion Optics Inc., where he raised $6.7 million in venture capital, and Apsco Inc. and Gould Instrument Systems. Prior to that, he spent 13 years in sales, marketing and management roles with Hewlett Packard after graduating from Worcester Polytechnic Institute with a BS in Electrical Engineering.

Over the past month or so, I’ve taken you through some of the organizations behind the transformation taking place in our region around entrepreneurial development. These last two round out the group quite well — and bring some very unique strengths to the table. And, if you missed parts one through three, make sure to check them out too.

Akron Global Business Accelerator

Akron Global Business Accelerator (AGBA) was formed in 1983, and in its nearly 27 years of service, has provided business assistance, highly effective space, and a superb entrepreneurial environment to Akron area technology companies. AGBA’s longevity is largely due to its ability to react to changes in the environment.

How it works: AGBA offers very nice, edgy office space in a converted, 7 floor manufacturing facility. In addition to low rent, AGBA offers on-site entrepreneurial support, provided in partnership with JumpStart TechLift Advisors. The facility has been popular — it has truly become a “place to be” for entrepreneurs in the area. The large number of tenants creates an extremely robust and energized entrepreneurial environment, where companies are learning from each other, and leaning on each others’ expertise and experience.

Results: In terms of state defined follow-on funding and revenue metrics for its clients, AGBA leads the group of Edison funded incubators in Northeast Ohio. The incubator has grown to include nearly 50 companies, and its expansion plans continue indefinitely. AGBA was awarded the National Business Incubation Association’s 2008 Incubator Innovation Award as one of the nation’s best incubation facilities.

Why it works: AGBA works because it keeps innovating, pays attention to the facility’s environment, connects with funders and other support mechanisms, and is highly supported as a community resource by the city of Akron and other stakeholders. AGBA actively reaches out to companies when they receive funding from early-stage structures like JumpStart Ventures, North Coast Angel Fund, and works closely with JumpStart TechLift Advisors, The University of Akron, and others.

Youngstown Business Incubator

Youngstown Business Incubator (YBI) is a key community resource for entrepreneurial rebirth in the Mahoning Valley area. It has achieved spectacular results by focusing on one area: software.

How it works: YBI offers office space and business mentoring services to its clients involved in one business area: business to business software. The modern facility is in downtown Youngstown, and is the centerpiece of the city’s revitalization. The initial rent is very reasonable: free. Once a company has gotten some traction and achieved some success, they are asked to pay reasonable rent. Also, “veteran” companies are expected to coach and help “rookie” companies.

Results: YBI has seen a great deal of success, not only in receiving national attention (The Wall Street Journal, and others) for its efforts, but also in the success of its companies, Most notably, Turning Technologies has raised $8 million in capital, hired over 150 employees, and was named “the fastest growing software company in America” by  Inc. magazine. YBI has opened a new 30,000 sq. ft. facility, and continues to lead Youngstown’s downtown revitalization.

Why it works: YBI works largely because of focus. Since it only caters to business to business software companies, YBI is very good at working in that area, understanding the nuances, and how to be successful. Also, through focus, YBI creates tremendous synergy amongst its tenant companies, and a noticeable sense of energy and purpose in the facility.

This brings the ‘Getting It Done’ to an end. I hope that you enjoyed digging a bit deeper into a few of the entrepreneurial support structures that are transforming Northeast Ohio’s entrepreneurial landscape. As I mentioned at the outset, these are not the ONLY successful structures, just some notable ones. If you’d like to share others successes of note you know of — comment here to let us know. We’re always looking for more great stories to tell about the positive transformation taking place in our region.

High growth entrepreneurism has really caught fire in Northeast Ohio, and I really believe that if we aren’t there, we are well on our way to becoming “the best place in America to start and grow a small technology company.”

Chris Mather is President, JumpStart Entrepreneurs-in-Residence. Previously, he managed a number of technology initiatives in Northeast Ohio for NorTech. Before entering the economic development world, Chris ran a number of technology companies in Northeast Ohio and New England, including Ion Optics Inc., where he raised $6.7 million in venture capital, and Apsco Inc. and Gould Instrument Systems. Prior to that, he spent 13 years in sales, marketing and management roles with Hewlett Packard after graduating from Worcester Polytechnic Institute with a BS in Electrical Engineering.