JumpStart: IdeaExchange Blog

Two weeks ago in Columbus, 500+ venture capitalists, entrepreneurs, and government leaders gathered to hear about the accomplishments of The Ohio Capital Fund (OCF) and our State’s growing venture capital community. (For those of you not familiar, OCF provides incentives for investors from outside Ohio to invest in companies based here). Due to the work of many, including the OCF, the Ohio Department of Development, and all of the other members of the venture community - Ohio has earned some serious bragging rights! Among the many great accomplishments shared at the OCF Summit, here are some of the most compelling:

• 196 companies received $446 million in equity investment in 2008. Of this, 73 companies (37% ) and $259 million (55%) were from the Northeast Ohio region.
• Total investment dollars ranked Ohio as 13th in the U.S. for venture investing.
• Early-stage funding (which represents the type of dollars that would be invested in a company after a JumpStart Ventures investment) was up 67% from 2007 ($238 million in 2008), compared to a decrease nationally of 20%.
• Organized angels invested $45 million in 107 companies in 2008. I have to believe this is one of the top levels of investment and broadest reach of companies of the last decade, if not longer.

*Read the rest of the 2008 Ohio Venture Capital Report from Ohio State for the rest of the details

Relative to The Ohio Capital Fund itself, its success is also evident with these stats:

• The fund has invested $111 million in 21 funds, which have deployed that capital in over 35 companies.
• These companies receiving investment have created 1400 jobs, and not one of those jobs has gone away in the last 12+ months.

Some of the other information shared included the impact of Ohio Third Frontier, as reported by the Stanford Research Institute’s report released last month. Consider this data regarding VC investment in the state:

• Venture capital investing has grown over 13% per year over the last five years in Ohio, more than double the national rate of VC growth
• Total seed and early-stage VC has actually grown at 18% per year over the last five years

Ohio Third Frontier and the Ohio Capital Fund have played an instrumental role in this growth, but not the only role; this success is also due to the entrepreneurs of our region, who have identified the ideas, pursued their growth, and grown the businesses that are attractive and competitive investments for investors within and outside of the region.

John Dearborn is the Chief Development Officer of JumpStart and brings experience as an entrepreneur, founder and CEO at companies across the US and Europe over the last 25 years to the pursuit of economic transformation in Northeast Ohio.

When I was a kid growing up in the ‘70s, my environmentalist parents would take my sister and me on vacation trips to various national parks across the country, mostly in the West. How embarrassing to admit I was less than impressed by these trips, because I was a smarmy 8 or 9 year old and really just wanted to be at my friend’s pool. At this time, I think one of the badges of honor of folks like my parents was to wear a t-shirt, available at each of these parks, with language that followed a standard structure : “Follow me to…” with the name of the park or its biggest landmark on there (”Follow me to Old Faithful”, “Follow me to Glacier”, etc.) At the time, I could barely imagine wanting to follow anyone to any of these places, and I also couldn’t imagine being confident enough to ask someone else - visibly — to follow me anywhere!

But here I am, asking you to follow me. Or rather, follow us, JumpStart. Not to a national park (although I’d love to be able to visit one of those parks now), but in the 2009 use of the term, to follow our 140 character communications on Twitter. Just sign on, search JumpStartInc, and click follow. Easy as pie.

I’ve written a few posts in the past about Twitter, whether it was sticking around, and whether it’s the right place for various activities to occur (such as pitching investors). You’ll also notice that JumpStart didn’t jump into the game as fast as some other organizations. This wasn’t because we didn’t value it, or think that it couldn’t have any good uses. On the contrary: we wanted to make sure that if you gave us the honor of following us, we’d pay it back with valuable, helpful content, delivered at the right time. We’d also work to spread your messages. That activity takes time, so we wanted to make sure we had a resource plan in place so that you aren’t disappointed by a start/stop approach, or frankly, overall lameness.

So now we are ready and going! And I think you will find @JumpStartInc to be the right place to get the news right now from the entrepreneurial, investing, and Northeast Ohio communities. So it’s not a t-shirt, but I’m asking anyway — follow me to @JumpStartInc, and start following JumpStart 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.

Here’s a run-down of some cool things that the companies in the JumpStart Ventures portfolio accomplished this month:

• Synapse Biomedical, which has a diaphragm pacing device to aid breathing for people with ALS or spinal cord injuries, confirmed that it is on track to more than triple last year’s revenue.
• Embrace Pet Insurance has surpassed its budget four of the past four months and is among the top-two in the industry in customer satisfaction.
• MAR Systems, which has a water treatment technology, is working with pilot customers; with one of those customers, MAR has proven that its technology is greater than 1000 times more efficient at removing mercury from waste water than the incumbent technology.
• Myers Motors, an all-electric vehicle company, announced its two-seater design.  One blogger wrote “I do wonder whether Myers may have just eaten Aptera’s lunch with this update.”
• Stanton Advanced Ceramics, which offers a non-traditional ceramic composite material that makes refractories more energy efficient and longer lasting, brought on paying customers with a coating version of its FireSlayer technology.
• CardioInsight Technologies, which has an electrocardiographic imaging technology and whose CEO has very successfully commercialized numerous cardiac technologies (raised $200 million, did IPO, etc), reached agreement with five key centers in the US and Europe to conduct clinical studies.
• iGuiders, which offers guided Internet search, forged a key partnership with an industry player and this partnership is potentially worth $23 million over five years. 
• Knotice, year-to-date, has increased the number of customers in key industries (retail, hospitality, consumer products, cable and telco, and financial services) by 75%, while growing revenue 50% and net income over 400% versus the same period of time in 2008.

They make these types of accomplishments every month. We catalog these accomplishments internally, and I’m going to be blogging about these more frequently externally. I think you’ll be impressed by the catalog of accomplishments these entrepreneurs achieve every single month. I know I am.

Becca Braun is President of JumpStart Ventures. She founded and led a number of early-stage companies and organizations, as well as worked as a private equity investor and management consultant. She received her MBA from Harvard Business School and her BA in Linguistics from Harvard University. She is keenly interested in the intersection of wealth creation and broad-based regional economic growth.

I read a great blog the other day related to a subject that I am a fan of — the notion that Internet-based, consumer focused offerings need to be lightweight, cost efficient and prove themselves prior to seeking investment. You may see a particular bent regarding VCs in this blog posting, which I am less inclined to agree with, but the major takeaways are still valid.

This site, meebo.com, was a true garage startup and has really taken off, as you see from the graph below (4 million unique visitors — and this is only ~1/3 of their traffic)! They allow you to log onto multiple instant messaging accounts in one place from a browser — no clients to download and it allows you to stay connected on multiple fronts.

You could say Seth’s approach is “extreme” but I do believe he makes some very valid points regarding focus early on and putting the right mix of folks together. He seems to have used a bit of Andy Grove’s “only the paranoid survive” in this statement:

“One of the things I do as a founder of a later-stage startup is to meet with early-stage entrepreneurs to help them get their companies going. Nine times out of ten, the meeting ends with them asking me for introductions to VCs. Little do they know that, even if they could raise VC, it’d start them down the wrong path. So, this is what I tell them:

At the exact moment you had your idea, ten other people had the exact same idea. There was just something in the environment that made it the right time for folks to think that one up. The race has already begun! Who’s going to execute first? Who’s going to execute best? If you want to waste nine months trying to raise VC money for that idea, great. But six months in, you’re gonna cry when you see someone else put out that same product you’re pitching me right now. Like I said, forget everything else and just get your product out the door. Now.”

So, while not every idea is going to be “lightweight” enough to be able to get to market validation without any funding, Seth gives some valid advice on what to focus on in terms of team, product and mentors. Give it a read, I’m sure you’ll enjoy it and I can assure you that it’s timely advice!

John Dearborn is the Chief Development Officer of JumpStart and brings experience as an entrepreneur, founder and CEO at companies across the US and Europe over the last 25 years to the pursuit of economic transformation in Northeast Ohio.