JumpStart: IdeaExchange Blog

Issue 1 is a statewide ballot measure that would authorize renewal and continuation of the highly successful Ohio Third Frontier (OTF) program. OTF is a visionary public-private partnership created in 2002 with bipartisan legislative leadership and support as well as widespread editorial support.

The purpose of OTF is to firmly establish Ohio as an innovation leader and to fuel long-term economic growth and create jobs in our state. OTF targets state investments to promising industries, technologies, and entrepreneurs. The initiative is directed by a bipartisan, appointed advisory board and commission. Funds are awarded through a competitive process in which independent experts review proposals and assure a base level of excellence for all projects.

With a 10 year initial life and an initial commitment of $1.6 billion, OTF has emerged as the centerpiece of Ohio’s technology-based economic development and job creation efforts. The bond funding mechanism for OTF, approved by Ohio voters in 2005, expires in 2012. On February 3, 2010, the Ohio General Assembly authorized a bond measure on the May 2010 ballot at a level of $700 million over four years. Support for placing the bond issue on the ballot was strong and bipartisan (30-2 in the Senate, 83-14 in the House).

OTF also has proven results including helping to:

• Create over 48,000 jobs.
• Attract or capitalize 571 startup companies.
• Attract $3.2 billion in follow-on dollars (from federal, state, local, private, and foundation funds) on top of the $473 million it has expended (through June 2009) on technology-based programs.
• Produce more than $6.6 billion in total economic impact in Ohio (through December 2008).
• Produce a total return on investment that has averaged 22% per year over the life of the initiative.
• Grow product sales from OTF-funded projects to $440 million per year (through June 2009) and are estimated to total at least $900 million by 2013.
• Double licensing income earned by Ohio’s leading research institutions from 2002 to 2007 it rose from $16 million to $40 million.
• Increase Ohio’s research base, from 2002 through 2008, it increased more than 60 percent, from $1.1 billion to $1.8 billion.
• Increase venture capital investment in Ohio. From 2003 through 2008, venture capital investment in the state grew almost 2.5 times faster than the U.S. average – 20.4% per year compared to 8.6% per year.
• And, 50% of the State’s OTF investment to date (through December 2008) has been repaid through tax receipts. The original investment, now projected to be $1.35 billion, is forecast to be fully repaid by 2014.

Most importantly for JumpStart and the entrepreneurs across Northeast Ohio and the State, OTF provides the opportunity for future potential critical resources which will leverage significant non-state resources for both direct investments into companies and for additional resources that may support the work of all of the Edison incubators in the region. The incubators include the Akron Global Business Accelerator, BioEnterprise, Braintree in Mansfield, GLIDE in Elyria, MAGNET, and the Youngstown Business Incubator, in addition to our local research-focused Universities and innovative established companies in the state.

Please read more about Issue 1 and please join everyone at JumpStart to help accelerate the progress of innovative companies in Ohio!

In the above blog, Ray is expressing his personal views as a citizen of the State of Ohio.

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.

Recently, I was asked to give a talk to a group about JumpStart TechLift Advisors, JumpStart, and the support network for entrepreneurial companies in Northeast Ohio. In preparing, I took a look at where we have been, and where we are today in terms of a fabric of funding and support resources for entrepreneurial companies. The progress since 2002 has been incredible. 

First off, I apologize in advance to any organizations who I may slight or overlook — in 2002, I was running a company in Boston, and wasn’t all that aware of Northeast Ohio’s efforts to encourage and support entrepreneurs. At that time, we had a few organizations, like EDI doing some entrepreneurial support, and some premier funds like Morgenthaler and Primus, but Northeast Ohio certainly wouldn’t have been described as a great place to be an entrepreneur. Largely due to the catalyzing work by NorTech, its predecessor, Cleveland Tomorrow, along with tremendous support from the Fund for Our Economic Future, the Greater Cleveland Partnership, the Ohio Department of Development and others, things started happening:

• BioEnterprise came along in 2002, with its bold model of harnessing our region’s bioscience research strengths to spur the growth of venture fundable companies. BioEnterprise is now recognized as a national model for such efforts.
• Early Stage Partners was formed in 2002 to begin to address the early-stage capital needs of the region.
• JumpStart was formed in 2004, with a focus on funding and mentoring high growth, venture capital fundable companies. It too, has become a national model for doing this.
• NorTech convened its Early-Stage Capital Task Force in 2005 to understand and address the projected capital needs of the region.
• Two angel funding groups, The Akron ARCHAngels, and the North Coast Angel Fund, along with a statewide group, the Ohio TechAngels Fund, were formed to connect entrepreneurs with angel investors.
• The State of Ohio formed The Ohio Capital Fund, which provides incentive for venture funds to locate in the state. A number of funds take advantage of this as well as well as the growing deal flow environment to locate here, and names like Arboretum Ventures, Bridge Investment Fund, Chrysalis Ventures, Draper Triangle Ventures, Radius Ventures, Reservoir Venture Partners, and RiverVest Ventures were added to our list of locally based funders.
• In 2006, the state challenged the region to design a program to take our entrepreneurial support system to another level. NorTech took the lead, and the result was the TechLift collaborative, directly supporting and mentoring the region’s technology entrepreneurs, providing financial support for important initiatives in the current system, and increasing the investable capital in the region. Like JumpStart and BioEnterprise before it, TechLift has gone on to become one of the best models nationally for growing, supporting and funding early-stage technology companies.
• The Innovation Fund at Lorain County Community College and Cuyahoga County’s North Coast Opportunities Technology Fund came about largely as a result of this effort, and they have since become integral parts of Northeast Ohio’s funding map, investing in ventures even before JumpStart and the angel funds, and are outstanding examples of productive public/private partnerships.
• The region’s Edison Program funded incubators, the Akron Global Business Accelerator, MAGNET in Cleveland, Braintree in Mansfield, GLIDE in Lorain, and the Youngstown Business Incubator came together as NEOinc to provide a broader set of incubation services. These incubators were also part of the TechLift collaborative, which provided for expanded entrepreneurial services.
• In 2009, TechLift joined JumpStart as JumpStart TechLift Advisors, to create a broader, more seamless entrepreneurial support network. JumpStart Inclusion Advisors was also formed at this time to provide world-class support and eventually funding to our minority and female led entrepreneurial companies as well as those committed to growth in our inner cities. Through these additions, JumpStart becomes the premier venture development group.

As mentioned before, apologies to any people or organizations I left out, but, I guess, in a way, that is a good thing, since we have had so much growth in our entrepreneurial support system that it’s tough to list all of the contributors. Over the past nine years, this progress is startling:

This in 2002:

To This in 2009:

When we started TechLift in 2007, our stated objective was “to make Northeast Ohio the best place in the U.S. to start and grow a technology company”. From the above, clearly, JumpStart TechLift Advisors plays a role along with many others. Are we there yet? Probably not — we still have work to do. Despite our superior support structure, we still don’t have the funding climate of Boston or Silicon Valley. We haven’t had enough “home runs” — companies that start in Northeast Ohio, get funded and exit with success. Are we on the way to becoming the best place in the U.S. to start and grow a technology company? We are on our way, should be proud of how far we’ve come and must keep pushing this remarkable transformation of our economy.

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.