JumpStart is a nationally recognized venture development organization that accelerates the progress of high potential, early-stage businesses to create a more prosperous future for Northeast Ohio.
If you were a public policy or government official and it was your job to create economic opportunity (jobs) in your community/region/state or country, would you be willing to invest in a “project” that:
For every $1 the government invested in the new project, the proposed project was required to at least equal the states investment on day one, dollar for dollar
For every dollar invested in this project, you also knew that not only would you get matching resources on day one but that you could also anticipate that you could get another $12 dollars for every dollar you invested from the private sector in the next five years
For every $23,000 that you spent one time five years ago, you could create at least one job paying an annual wage of $67,000 – meaning you could recover this investment in new payroll taxes within a 5-7 year time period, conversatively
For every job you have created today, you have the likelihood – with zero additional investment – to create at least another 20 jobs both direct and indirectly over the next 15 years with this investment?
If this sounds all too good to be true – its not. This is what the commercialization programs of Ohio’s Third Frontier have done since 2002. The leadership in Ohio has understood, for the last seven years, that investments in programs that support the commercialization of technologies in Ohio make sense in the near-term, and make even more sense when looking to future economic growth opportunities five, ten, and 15 years out.
You can find proof of these numbers at www.thirdfrontier.com via metric reports as well as by reviewing the SRI report which is available on this website.
The Third Frontier Program demonstrates how the public sector can lead to create economic growth and jobs — it would be good for Washington to follow Ohio’s playbook.
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.
I know you were impressed about the progress being made in Ohio when you read my colleague John Dearborn’s blog just a few weeks ago. Maybe you were even a little surprised! After all, it’s not entirely intuitive (not yet, anyway) that Ohio’s venture capital activity would have grown at double the national average for the last five years, or that the state’s Ohio Third Frontier program would have already created more than 41,000 jobs.
After so much good news on our progress such a short time ago, it might be surprising that I have three more reasons Ohio should be on rooftops, shouting about its progress. I’m not surprised, because the velocity of Ohio’s growth is accelerating; it’s why we continue to have success after success to talk about. So — that said — here are three more reasons why you can brag about progress in Ohio:
#1 in the country in deals supported by the government. ChubbyBrain’s new report on government funding was just published by FastCompany, and included a look at where the government funding going into company deals was allocated. Ohio was #1 based on number of deals, followed by California and Massachusetts. The fact that California and Boston were second and third on the list shows that the government isn’t funding companies where nobody else is funding them; on the contrary, government funding — like private sector funding — goes where the companies are most competitive and promising.
BusinessWeek’s inaugural list of World’s 25 Most Intriguing New Companies included Phycal and Freedom Meditech, both of which have received JumpStart Ventures investment. Check out the current publication for the profile of Phycal, one of just five companies with a longer writeup. (You don’t want to miss learning about the CEO’s “romance with algae”!) These companies had to compete with global companies on both the originality of the idea and the progress that’s being made in order to make it on the list.
My own experience at the NVCA meeting in Palo Alto, CA. When meeting with other communicators to be briefed on VC policy and communication issues, the head of marketing of a well-known venture capital firm said to me directly, “What is going on in Ohio? I can’t believe how (they’ve) seemingly come out of nowhere and now, (they) seem to be everywhere.” Given all the “braggin’ rights” we have, you can imagine how I answered that!
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.
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.
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.
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.
If you were a public policy or government official and it was your job to create economic opportunity (jobs) in your community/region/state or country, would you be willing to invest in a “project” that: