JumpStart: IdeaExchange Blog

If you’ve missed the first two parts of ‘Getting It Done’  - check them out: Part 1 on BioEnterprise and JumpStart Ventures, and Part 2 on JumpStart TechLift Advisors and JumpStart Inclusion Advisors. And, here’s Part 3 — highlighting two more organizations doing incredible work to help fund our region’s startups.

The Innovation Fund

The Inovation Fund was formed in 2007, with funding provided by the Third Frontier Entrepreneurial Signature Program and the Lorain County Community College Foundation, and administered by the GLIDE Incubator. It plays a key role in Northeast Ohio’s early-stage funding climate.

How it works: The Innovation Fund provides early-stage funding to qualified technology companies in the form of grants (‘A’ grant — $25,000) and repayable grants with a funding replenishment right (‘B’ grant — $100,000). Both require the awarded company to provide an educational experience to a local university. The process is competitive, and is collaboratively administered by GLIDE, JumpStart TechLift Advisors, Youngstown Business Incubator, the University of Akron Research Foundation, and a high quality selection committee. It serves the entire 21 county Northeast Ohio region, a real show of vision by the president of LCCC, Roy Church.

Results: The Innovation Fund has shown significant results since its start in late 2007 — making 38 grants to 35 companies totaling $2.075 million. Many of those companies have gone on to receive funding from somewhat later-stage structures like JumpStart Ventures, the North Coast Angel Fund, and Series A venture investors. They have received 210 applications from 15 of 21 counties in Northeast Ohio. The educational experiences at these companies have ranged from internships to teaching classes and research associate positions.

Why it works: The Innovation fund works because it provides funding just when it’s needed. It helps make Northeast Ohio to offer funding options to qualified companies at all levels of the entrepreneurial spectrum. GLIDE and the LCCC Foundation have done a remarkable job of creating a highly effective, region-wide structure that collaborates with multiple organizations and entrepreneurs.

North Coast Opportunities Technology Fund

The North Coast Opportunities Technology Fund began in 2008, jointly announced by Cuyahoga County and JumpStart TechLift Advisors. It is a great example of a public/private partnership that works to enhance the entreprneurial and technology climate in Northeast Ohio.

How it works: North Cost Opportunities Technology Fund (NCO) is yet another vehicle to provide very early-stage funding ($50,000 — $125,000) to venture capital fundable companies located in Cuyahoga County. It makes loans that “feel like venture capital” to back a specific project designed to bring the company demonstrably closer to the next level of funding. Highly competitive company selections are made by a team from JumpStart TechLift Advisors, the MAGNET Incubator and Cuyahoga County. The unique loans are administered by the county.

Results: NCO has made six investments, from nearly 60 applicants, and has $480,000 in capital put to work. A seventh company has been selected for investment, and is in the works. NCO’s companies have already shown progress: Tremont Electric has received significant national press, SparkBase has doubled its employment, and CitizenGroove has received significant follow-on funding. Most importantly, the collaboration shows that Cuyahoga County is visionary in its plans for technology development.

Why it works: Like the Innovation Fund, NCO works because it provides critical funding to put early-stage companies in position to achieve the next level of funding. The project structure ensures that the relatively modest amount of funding is used wisely, and in a way designed to achieve results.

Next in the series: Youngstown Business Incubator and Akron Global Business Accelerator 

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.

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.