JumpStart: IdeaExchange Blog

Yesterday The Burton D. Morgan Foundation announced a $3M challenge grant to JumpStart, which will hopefully enable us to raise an additional $9M in support from public and private entities interested in JumpStart’s venture development model. These resources will enable JumpStart to continue to make a significant impact, helping hundreds of companies with their business goals and linking them to the capital they need to succeed. JumpStart intends to invest in dozens of Northeast Ohio companies each year that have the promise to attract significant follow-on resources down the road. For more on this grant, see the Plain Dealer blog post.

Before I got involved in economic development at JumpStart, I had a chance to get to know Burt Morgan. He was an incredibly creative, insightful and outspoken entrepreneur. The Burton D. Morgan Foundation truly brings his vision of fostering the entrepreneurial spirit to life.

We are excited and grateful for the confidence that the Morgan Foundation has demonstrated in JumpStart with this challenge. We are also excited about the progress Northeast Ohio early-stage companies are making and the increased interest from national investors.

Ray Leach is CEO of JumpStart and brings his energy and leadership experiences from founding five high-growth entrepreneurial and intrapreneurial endeavors in the last 20 years. Ray is a Sloan Fellow and earned an MBA from the MIT Sloan School of Management. He also earned a BA in Finance from the University of Akron.

The world of inclusion is interesting to say the least. The subject is arguably one of the most controversial and misunderstood topics of our time. From a purely economic standpoint, I’d like to offer a few facts, figures and thoughts for consideration:

It is now commonly understood that one-half of our nation’s population will consist of major ethnic minority groups over the next 25+ years - that’s over 150 million people! Corporate America (to pick one audience) has recognized this fact as its customer base is changing, and to demonstrate its commitment to inclusion is aggressively looking to do business with more diverse firms. This commitment translates to tens of billions of dollars in business opportunities at play on an annual basis.

Competitive and global pressures on our nation’s corporations however, force supplier diversity efforts to target the kind of diverse firms that can take on much larger projects and opportunities than has been the case traditionally. For many well-documented and historical reasons, few diverse firms currently exist that have the necessary capacity and infrastructure to take on these larger assignments.

The result? A classic case of supply & demand: billions of dollars in economic opportunities on the demand side, and a relative few larger scale diverse firms on the supply side.

It can be argued that the region or state that begins producing and developing larger scale diverse firms will attract a significant and disproportionate share of the aforementioned billions, which stands to create a positive economic ripple effect for not only the minority communities in the region but all citizens. One possible scenario of the economic ripple effect follows:

• As more diverse firms begin to scale, they require investment dollars to support their growth (these investment opportunities are available to all citizens)
• As the diverse firms expand, they will require strategic alliances with existing businesses (owned and operated by all citizens)
• As more diverse firms experience growth, more employment opportunities are provided (for all citizens), which in turn enhances overall consumer spending
• A more robust and thriving economy attracts tourism to the region from various cultures and ethnicities which provides an economic stimulus for area hotels, eateries, arts, and entertainment venues
• Prosperity for all citizens also helps to attract the best and brightest minds to the region from various cultures across the globe which addresses “brain-drain” and other talent related challenges

Sooner than later some region will recognize this unique opportunity, make the necessary investment and reap the benefits. Why not Ohio?

Darrin is Chief Economic Inclusion Officer of JumpStart. He founded and ran his own strategic planning and management assistance firm and spent 16 years in the commercial banking and finance industry. Darrin has an MBA from Baldwin Wallace College and an undergraduate degree from Mount Union College. He has led a series of workshops and seminars on matters of economic development and diversity.

I realize that JumpStart is not the first organization to put the two words “venture” (as in venture capital) and “development” (as in economic development) together to coin a phrase. But we have been one of the greatest promoters of these two words together of late because we believe this is a model that has the ability to make significant economic change in NEO over the next decade. See wikipedia’s definition of venture development.

The reason why these two words together make sense to describe what we do is that we are looking for ideas and companies that become significant wealth-creating businesses, but at the same time we are not doing this for our own or organization’s profit, but instead for the benefit of entrepreneurs who can help transform the short and long-term prospects of the economy of Northeast Ohio.

We know that we did not invent this idea – in fact the predecessor to JumpStart that was started in 1983 at Case Western Reserve University was called the Center for Venture Development! The incredible opportunity that JumpStart has had is to implement this model – at scale. In only 4 years JumpStart has been able to connect with over 5,000 entrepreneurs and have the resources to make 42 investments! Through these actions, JumpStart has begun to help transform this region’s entrepreneurial community and our economy’s future. We look forward to continuing to work to improve the venture development business model we practice at JumpStart and continuing to accelerate our region’s collective transformation.

Ray Leach is CEO of JumpStart and brings his energy and leadership experiences from founding five high-growth entrepreneurial and intrapreneurial endeavors in the last 20 years. Ray is a Sloan Fellow and earned an MBA from the MIT Sloan School of Management. He also earned a BA in Finance from the University of Akron.

Many citizens believe that government cannot realistically sort through the complexities of today’s economic challenges.

I think that the State of Ohio’s Department of Development (ODOD) certainly proved that they have a very clear grasp on most of the significant issues facing our state’s economy, with the release of their brand new economic development plan on September 3, 2008. Their website offers access to a copy of the complete plan and the executive summary.

I served on the advisory board to ODOD for the plan, along with about 80 others. While the sessions I participated in were valuable, the size of the advisory board and the breadth of opinions expressed made the process somewhat challenging.

Having said this, I think the plan published by Lee Fisher and the team at the ODOD is a great one. It is inspiring, clear, measurable and - best yet - practical in its approach.

Leading the economic development efforts across Ohio’s entire economy has got to be a thankless job and one that requires unending energy and commitment! We are lucky to have such great leadership that has demonstrated both their commitment to transforming Ohio’s economy on a day-to-day basis, as well as their understanding of the issues facing our State.

Ohioans should feel good that there is a plan in place to lead us into the future and help us track how we are progressing toward the plan’s goals.

Read the news coverage of the strategic plan in the PD’s Politics Blog and in the Akron Beacon Journal.

Ray Leach is CEO of JumpStart and brings his energy and leadership experiences from founding five high-growth entrepreneurial and intrapreneurial endeavors in the last 20 years. Ray is a Sloan Fellow and earned an MBA from the MIT Sloan School of Management. He also earned a BA in Finance from the University of Akron.