JumpStart: IdeaExchange Blog

I have had a chance recently to spend some time at the White House to meet some of President Obama’s leadership in the area of Social Innovation and Regional Economic Development and I have to say that I was more than impressed and encouraged.

A few months back, Obama announced a new Social Innnovation Fund which he has requested $50 million for in his FY2010 budget. The Fund’s purpose is to identify the most promising, results-oriented non-profit programs and expand their reach throughout the country. I think that this is the kind of leadership we need from the federal government to maximize and leverage existing public/private partnerships to help them sustain and increase their impact in these times where non-profits of all types are really struggling. The person that Obama has tapped to manage this fund is Sonal Shah. Sonal joined the administration directly from a position focused on global development Google.org — the philanthropic arm of the internet search leader.

Along with this exciting development, I have also been talking to leadership in Washington around all sorts of ideas that can accelerate regional economies, and this week a great article came out from ScienceProgress.org called The Geography of Innovation. This article speaks to the fact that the Obama administration has also requested $100 million to support regional innovation clusters across the U.S. — in fact it even shares the Northeast Ohio and Southwestern Pennsylvanian partnership, an initiative we in the region call TechBelt, in this article.

What is so encouraging to me about these actions is that it shows the Obama administration understands they have a critical role to play to highlight best practices and to encourage partnership. When initiatives like the Fund For Our Economic Future and the Ohio Third Frontier Project have provided such significant leadership and resources with similar goals, it has been discouraging that the Fed’s have not taken a more direct role in the work of these incredible public/private partnerships.

It now appears with programs like the ones mentioned above, that is about to change in an important way which is great news for everyone who has invested and labored so hard to make an impact in changing the trajectory of communities like Northeast 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.

Ever since the recession of the early 2000s, Northeast Ohio’s economy has struggled to maintain our competitiveness vis-a-vis other communities and regions in the U.S. This has been well documented of late. We have also suffered problems here in Northeast Ohio well before other areas of the country. Our challenges around foreclosures a few years ago are now the challenges for much of the entire nation.

If you think about the big picture, you can see that Northeast Ohio is much like a “canary in a coal mine.” Our economy has been challenged by critical, significant issues such as globalization (via our loss of manufacturing jobs), increasing requirements of a broad and well-educated workforce, and the financial requirement (not just desire) for more competitive and streamlined government.

Could everyone else’s new found challenges (and the time it is going to take local communities to address some of these) give Northeast Ohio the opportunity to make tremendous progress in the next five years? I think the answer may be yes.

A serial entrepreneur who had left Northeast Ohio in 2003 to lead a company recently returned and commented to me that “the entrepreneurial landscape in the region has completely changed in just five years.” I think this is a great example of what this region can do.

In order for this to happen at a broader level it is going to require an enhanced level of leadership and a focused agenda. I think it can be said that all of Northeast Ohio’s efforts around regionalism, especially when aligned with the State’s Third Frontier and the Ohio Department of Development’s new strategic plan, could continue to play an even more significant role in help this region to catch up!

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.