JumpStart: IdeaExchange Blog

It’s that time of year, the State of the Union/State time of year. And while I won’t give you a State of JumpStart address here, it’s become obvious to me that:

The State of Cleantech In Northeast Ohio is booming.

The Governor of Ohio, Ted Strickland, visited a JumpStart Ventures portfolio company yesterday, rexorce thermionics (in the process of changing its name to Echogen Power Systems). Aside from the company’s accomplishments including the installation of its commercial pilot for its heat engine and the creation of 20 engineering jobs, the Governor was visiting because it’s the perfect example of the growth of the cleantech sector in Ohio. A few other examples showing this is real growth, not just rhetoric, from The 2009 Venture Capital Report for the Cleveland Plus Region:

• Cleantech companies are the fastest growing segment of companies receiving venture capital or angel investment in the Cleveland Plus region. While they received only 3% of the dollars 5 years ago, they received 20% of the dollars in 2009.
• 33 cleantech companies have received venture or angel investment in the last five years.

One of those companies is VADXX Energy, whose CEO, Jim Garrett, presented its business plan yesterday at JumpStart to the Oberlin Entrepreneurial Scholars. VADXX Energy, which transforms waste plastics (such as the seats of old cars) back into synthetic crude oil, set up its first production facility in Akron recently, and will shortly be starting its first commercial pilot production.

Another of those companies is Phycal, a JumpStart Ventures portfolio company creating algal biofuel. Aside from the algal pool in its Mayfield Heights location, the company is in the process of setting up its first pilot production facility in Hawaii. Phycal was identified as one of BusinessWeek’s 25 Most Intriguing Companies last month.

With the Federal and State initiatives that will ultimately be funding Northeast Ohio cleantech companies in the future, with the new advanced energy incubator in Warren moving forward, and with the continued support of Ohio Third Frontier, there’s no better place to be for a cleantech company.

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.

Some of the most exciting days at JumpStart are the days when the wire is sent to a new or existing company in which we are making an investment. They’re days where the energy is a little bit higher, there’s more constant checking of email to read the news coverage, and people hover closer to the JumpStart Ventures’ office area to hear the celebratory bell we ring for good news.

We had a day like that last week with our investment in Catacel. If you didn’t see the media coverage of it (thank you, media partners!) or hear about it on Twitter, you can learn more about the investment on our website. This investment in Catacel was particularly exciting because it was JumpStart Ventures’ 52nd investment in its 40th company, our first investment in a Portage County company, and another investment in a clean energy company.

This one investment delivered on many factors we at JumpStart (and in this region) find substantially helpful in the development of an early-stage company. Catacel is led by a world-class entrepreneur with an idea and technology that promise to be venture-fundable, operating in a clean energy cluster that is second to none nationally, and receiving the seed capital and technical assistance necessary to accelerate its growth.

We are very excited to continue to work with this promising company.

The investment closed on what seemed to most, a ‘regular day’. It was a day without much pomp and circumstance, not a holiday, not a special anniversary of a founder, not even a Friday! But, this is the world of early-stage entrepreneurship…every day, companies attain milestones and grow. Every day, someone is closing a new investment, gaining  a new customer, completing a clinical trial, hiring a critical new addition to the team, or finishing their product’s development. Many times, these seemingly small things happen without many people noticing, but they are really the things that matter to growing, early-stage companies. Here at JumpStart, we make it a point to celebrate each and every one of these milestones of growth.

Congratulations, Catacel, and welcome. We can’t wait to celebrate many more ‘regular days’ on your high growth path.

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.

I just vacationed on the north shore of Lake Erie and returned to work yesterday to find three reports in my email inbox that made for an upbeat morning, which I needed (read on, and you’ll learn why). 

First, Youngstown is on the cover of Entrepreneur Magazine’s August issue as one of the Top 10 best cities for entrepreneurs. Jim Cossler, head of the Youngstown Business Incubator, and Turning Technologies (ranked as one of the fastest growing software companies in the country), are two key reasons for the ranking. Jim is the evangelist of all evangelists. We tried to recruit him here when JumpStart was first formed, but he loved his job too much to do anything else, and we had to respect that. He knows the strengths of the tech corridor that Youngstown, at the mid-point between Pittsburgh and Cleveland, represents, and he builds on those strengths with a focus and relentlessness that is fun to watch. Congrats to the Youngstown entrepreneurial and tech community on this win!

Second, Cleveland-Elyria-Mentor is listed as the 15th city in Forbes Magazine’s recent “America’s 100 Best Cheap Cities” list, which includes the subtitle “Get more for less in these bargain boomtowns”. What’s more, the magazine lists nine more Ohio cities, giving Ohio ten cities that are in the top 100. From what I can tell, no other state has more cities that qualify as “boomtowns where you can get more for less”. These cities are Cleveland, Columbus, Cincinnati, Akron, Dayton, Toledo, Youngstown, Canton, Mansfield, and Lima. Of course I recognize, as does the magazine itself, that cheap cities may very well be cheap because unemployment is high or some other structural/economic factor is sub-optimal. However, the magazine also says that it is seeing the technology industry shift towards these lower cost cities and that this is “all part of a larger shift with tech that you’re going to see in the U.S.” At JumpStart, we live our lives every day working towards this, so we live and breathe this emerging reality; it’s great to see others beginning to recognize it. 

Third, the Pew Charitable Trusts’ recent Clean Energy Economy report ranks Ohio in the top 5 states in the country for number of jobs in the Clean Energy Economy. The Clean Energy Economy is a huge part of forecasted job growth over the next five to ten years and longer, and so to be a Top 5 state bodes well. Combined with Northeast Ohio’s already recognized healthcare strengths, we may well be positioned for a good decade (maybe even a great one?). The report highlights Axentis, right here in Cleveland, as a company whose software monitors greenhouse gas emissions. One of our Venture Partners, Ted Frank, was co-founder and President of Axentis, and its Chairman (and co-founder), Steve Lindseth, is one of our favorite regular speakers on the topic of growing a company and raising capital. Congrats to them for being highlighted.

Now back to why I needed to have an upbeat morning…During vacation I was supposed to be reading about the 21 irrefutable laws of leadership, but instead I got engrossed in In Cold Blood by Truman Capote. Now I return to work this morning no better a leader and all scared-like and depressed to boot (have you read In Cold Blood?). I would like to take this opportunity to reframe my wayward vacation ways, however. You see, rather than just reading about leadership, I like to believe I was actually practicing it: while I was away not reading what I was supposed to be reading, Youngstown became tops, Cleveland became a boomtown, and Ohio became a Cleantech mecca! Now that’s some serious leaderly delegating, eh? :-) 

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.

After spending six plus years working on mentoring and investing in brand new emerging companies founded in Ohio, I am 100% convinced that this work is a critical component to re-building Ohio’s economy.

At the same time, however, I also believe that Ohio’s ability to attract startup companies whose technology was invented and developed elsewhere – from California to Europe — but now has the need and ability to go-to-market may be equally important to our short-term economic future.

If Ohio is able to leverage its current competitive assets, from its low cost of living to its strong manufacturing-oriented workforce, it will be able to create thousands of new jobs in the short term which will enable Ohio to generate significant tax receipts and create new jobs. This also allows us to buy some time for the companies that have recently been started in Ohio over the last five years to grow and mature, and provide more time for individuals who are being re-trained to take on more white collar jobs that are already in great demand.

That is why the renewal of Ohio’s Third Frontier Project must be pursued diligently now that the State budget resolution is behind us. This public/private initiative has the ability to not only support new businesses but if we leverage the expertise in the State, we can now attract and commercialize technologies that have been invented elsewhere, and have the ability to generate revenues and create jobs more quickly.

Recently we have been working with companies that have been venture-backed that are headquartered in other states but now are looking to establish their first significant manufacturing operations. Many times, for these companies it does not make sense to locate these in higher-cost communities that are further away from their customers. Ohio has the ability to address and solve these challenges for such companies.

Startup companies in the cleantech space, in particular, face real challenges in establishing their first manufacturing operations many of which make perfect sense to be located in Ohio as these business are looking to leverage the industrial expertise of the Ohio economy.

JumpStart looks forward to working with leadership in the State and in the private sector with the new Third Frontier Project in order to make all of this happen starting now.

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.