JumpStart: IdeaExchange Blog

CB Insights recently published a report that showed Ohio is #3 in the nation for providing grants to innovative, early-stage, scalable companies.

The graph above is from the report, which shows that Ohio’s state government provided 14% of all grants awarded to support innovative companies and activities in the last five quarters.

While I am as cautious in general of large government funding programs as anybody these days, I’m also incredibly encouraged to see the state of Ohio’s commitment, relative to other states, to encouraging more innovation and entrepreneurship. 

It’s not new news that Ohio’s government leadership, on both the Republican and Democratic sides, have supported Ohio Third Frontier, Ohio’s program to accelerate innovation in the state through research, technology commercialization, and entrepreneurship. JumpStart folks have blogged about Ohio Third Frontier in the past, including the results of the program to date (such as over 55,000 jobs and venture capital investment growing at more than twice the national rate.)

What is exciting and new is to see third party validation that the state’s activity is one of the leaders in the country.    

Seeing this relative leadership, it’s less surprising that Ohio is now seeing results in private sector activity. According to the National Venture Capital Association and its MoneyTree data from Thomson Reuters, Ohio was a top 10 state for its volume of venture capital investments in 2009, up from a top quartile state in 2008 and lower than that in previous years. Of the client companies with which JumpStart works, some of them used some of this state grant funding for initial capital (or received an investment from JumpStart Ventures, also a recipient of Ohio Third Frontier grant funding) and then went on to raise risk capital afterwards. They were able to use state grants to develop their companies to the point at which they were in the range of acceptable risks for for-profit investors, and then secure that follow-on funding. They are great examples of how state dollars are being leveraged to generate private sector dollars and private sector jobs.    

I’m somewhat familiar with the results of the Ben Franklin program in Pennsylvania and the results of organizations that have received Ben Franklin funding (such as Innovation Works). They are similarly impressive. So whatever your personal political position is relative to government programs, don’t you want your state’s entrepreneurs to be raising private sector dollars and creating jobs, no matter what was needed to spur that activity?

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.

If you’ve been paying attention lately, you’ve heard a lot about Issue 1 from us. That’s because we think it’s fantastic, as do the people you have elected as your Ohio House and Senate Representatives, among others. But, how often do you hear about an Ohio issue from someone in California? If you do, it must be good. Well, guess what - that’s what’s happening here. Third Frontier (the program that will be renewed if Issue 1 passes on May 4th) is getting attention across the nation, including The Huffington Post in California.

Don Reed says “Between now and May 4th, Ohioans will vote on Issue 1: a spectacular jobs program. It is an urgent reason to go to the polls: in person, or by absentee ballot…If I lived in Ohio, I would run, not walk, to the nearest computer - investigate the issue, maybe even get an absentee ballot, so I could vote early - and vote yes…Let us hope, that like another old saying, ‘As Ohio goes, so goes the nation.’”

Read the rest of his thoughts on the topic, including all the reasons he would vote yes. I couldn’t agree more!

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.

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.