JumpStart: IdeaExchange Blog

Much has been written about the economic benefits of growing larger scale diverse businesses. Higher levels of job and wealth creation for minorities and women; creating procurement opportunities for smaller diverse firms; and creating new business and civic leaders are but a few of the benefits routinely cited. Despite these highly desirable outcomes, the level of investment in this strategy continues to significantly lag behind other efforts. Given the overall state of the economy, I certainly recognize that all strategies, no matter how viable, are challenged to secure adequate resources. In such an environment, our funding community rightfully begins to search for the “highest and best use” of capital, or simply stated in today’s economy, what efforts can create the most meaningful and sustainable jobs in the shortest possible time frame?

As our leadership ponders this question at the local, state and federal levels, I offer the following suggestion — reconsider investing in business support organizations that develop high growth minority and women-owned firms. Why? It occurred to me that this strategy of growing larger scale diverse firms has often been linked to a longer term economic development strategy that, while highly desirable, won’t necessarily have the greatest impact in the short term and is thus often put on the back burner. I ask our funding community to reconsider this strategy as it is likely that the short term economic benefits have not been thoroughly considered. When one considers that jobs are fundamentally created through the process of growing businesses, the right minority or woman-owned firm can arguably grow faster than other firms. How? Consider the following:

There are a growing number of private equity and investment resources specifically targeting high growth diverse companies, with few organizations actually preparing minorities and women for these investment audiences. 

The kind of diverse companies that would be attractive to private equity and venture firms are also the kind of companies that would be very attractive to larger corporate and institutional businesses seeking to diversify their supplier base. As businesses receiving private equity and venture investment generally have scalable business models, unique value propositions, national or international capacity, and strong leadership teams, large corporate and institutional businesses seeking to diversify their supplier base would be equally drawn to such minority and women-owned firms meeting this same criteria. This reality could likely result in the following:

• Significant revenue opportunities for the diverse firms within the first few years of funding — (in fact the high probability of securing revenue from interested corporate and institutional clients increases the odds of securing investment capital).
• The corporate and institutional clients create the necessary credibility for the diverse firms to attract additional clients for expansion.
• The broad client base established from the initial corporate clients creates sustainable growth.

It is important to reiterate that this rapid growth strategy is dependent upon identifying the right companies for investment. The right companies first and foremost bring a unique and compelling value proposition to the table, are attractive to investors, and can help the larger corporate client generate new revenue, open new markets, cut costs, grow market share, or some combination of all four — and the business just happens to be led by a minority or a woman.

Darrin is Chief Economic Inclusion Officer of JumpStart and President of JumpStart Inclusion Advisors. 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.

Have you heard about 3 Rivers Venture Fair? The venture fair where past featured companies have gone on to raise over $292 million dollars? The one where last year, 44% of the presenting companies raised capital as a result of the fair?

Whether you have or haven’t, I’m guessing that if you are looking for funding for your high growth company, you are intrigued. Good! Now turn that interest into action today by applying to present. While applications are being accepted on a rolling basis, we have heard that they’re pouring in and 30% of the spots are already taken! If you want to be considered to present your company to more than 500 A-list venture capitalists, private investors, I-bankers, and other business leaders, I’d be sure to fill out the application online no later than Friday May 29. I think after that, there will be very few (if any) spots left.

A few other things to note:

• If accepted, you’ll need to attend a mandatory Bootcamp from 12 - 5 pm on Thurs Aug. 13 at PNC Park in Pittsburgh.
• Also, you’ll need to pay ~$600 for your attendance, which gives you the chance to exhibit for the entire conference. (Remember, last year, at least 44% of companies got a payback on those investments!)
• The fair itself is Sept. 15 and 16, also at PNC Park in Pittsburgh.

Finding out more about 3 Rivers Venture Fair is easy, so put this on your list of things to do today.

Cathy Belk is the Chief Marketing Officer of JumpStart. She specializes in branding, marketing communications, and business management. She brings 16+ years of experience in a variety of marketing and business roles, but gets her energy from working daily with entrepreneurs and their growing companies.

Took a marketing jaunt last week to NYC to visit with some early-stage VCs to let them know about all the great startups we have here in Northeast Ohio. As luck would have it, the weather was fabulous, making it easy to enjoy the city and walk from meeting to meeting. It took me back to a time gone by when I worked on Wall Street as a junior peon — oh, I mean Financial Analyst — learning what “IPOs” and “M&A transactions” are and deciphering what it really means to participate in the capital markets.

In 1984, on my first day at Smith Barney, Harris Upham (”we make money the old fashioned way, we earn it…”) we learned how to use LOTUS 1-2-3 on a newfangled contraption called a personal computer. It’s interesting to reflect, 25 years later, on the effect the PC (and, more importantly, the variety of software programs developed for the PC) has had on the workplace of today. (Does anyone remember WORDIX/EDIX and VISICALC?) While that discussion is a topic for another day, it does relate a bit to what I want to discuss here.

These past few days, while traveling and in-between meetings, I have been trying to get further up-to-speed on Twitter. Partially because I heard that one of the VCs I wanted to meet — Fred Wilson of Union Square Ventures — is a big “tweeter” (he’s also an investor in the company), and partially because I just like the challenge of learning new things. In a nutshell, Twitter allows one-to-many communication, kind of like sending out an email blast with an interesting article or cool fun fact. The difference, however, is that instead of an email blast, where you are sending a message to people you know, with Twitter you send your blast to people who have decided to “follow” you whether you know them personally or not.

It’s easy to sign up but not as intuitive to use as the creators would like to believe. The “help” section is just a list of topics compiled by users, so it’s not really a basic “101″ type overview, nor is it that easy to search. To make up for this I searched for and found two concise articles to get me started and am sharing them: one article by Paul Boutin, and another article by David Pogue, both from The New York Times. My quick evaluation is that, like all other social media tools, Twitter can be both a blessing and a curse. The same person who tweets “waiting in line at Starbucks, should I get a latte or a macchiato?” (I mean, who really cares?) could be the same person who sends out an incredibly relevant and interesting article that you never would have found in a million years. Such was the case over the past two days when I received the following great article in a tweet. It’s a terrific post mortem about a failed startup. While I’m not advocating dwelling on the negative, the writer highlights some strategic business issues that were not as well thought out as they could have been. Very interesting reading for anyone contemplating starting a business. As for Twitter, let’s hope that as the Twitter community matures, the users realize the benefits inherent in sharing interesting, thoughtful information rather than frivolous information bordering on the narcissistic.

Lynn-Ann Gries is the Chief Investment Officer of JumpStart Ventures. She previously worked in the investment banking departments at both McDonald Investments and Smith Barney (now part of Citigroup), and in the sales and trading area at Morgan Stanley. She received her MBA from New York University’s Stern School of Business and her BA in Economics from Smith College. She currently serves on the board of the Fund for the Future of Shaker Heights, the Great Lakes Science Center and Summer on the Cuyahoga (SOTC).

Most marketers dream about having oodles of market research to direct their activities, and most of us (probably all of us) get used to not having it — or at least, not oodles. But one of the best things about blogs and other Web 2.0 communities is that you can get feedback — directional, for sure — quickly and easily. A dream come true! So I’ve been thinking about one of JumpStart’s opportunities lately and could really use your help and feedback to shape it.

Last year, JumpStart kicked off a new series of lunch seminars, called Growing Bright Ideas, focused on topics relevant for early-stage technology entrepreneurs leading high growth companies. As a quick recap, here were the topics:

1. Technology Marketing: Crossing the Chasm (June 2008)
2. New Media: Tricks of the Trade (August 2008)
3. Founder Frustrations, CEO Mistakes (November 2008)
4. Hiring Smart: Advice for Hiring Top Talent (December 2008)
5. Fundraising: What you Must Know (March 2009)
6. The Term Sheet: What you Must Know (April 2009)

Sound familiar? I hope so. Some of my personal highlights from the seminars include: enjoying HBS Professor Noam Wasserman’s slides with super-hero characters as the proxy for entrepreneurs (yeah!), laughing at Bonnie Gwin’s stories about interviewing candidates for positions, learning the “real deal” on negotiating term sheets from Steve Lindseth and John Saada, and getting to meet new folks joining our Northeast Ohio entrepreneurial community in every seminar.

We are in the process of planning for next fall’s seminars, and this is where I start dreaming about getting some feedback on where to take the series. There are three questions that your answers to would be really helpful:

1. What topics would be most interesting to you that we cover next year (and aren’t being offered elsewhere?)
2. Are you interested in a “101″ level program, or something more advanced?
3. What else should we be considering? (bigger venue, more podcasting of the seminar topics, having the seminars over breakfast, etc)

If you are an entrepreneur leading, or interested in leading, a high growth early-stage technology company, please let me know how we can evolve this series to meet your needs.

Cathy Belk is the Chief Marketing Officer of JumpStart. She specializes in branding, marketing communications, and business management. She brings 16+ years of experience in a variety of marketing and business roles, but gets her energy from working daily with entrepreneurs and their growing companies.