JumpStart: IdeaExchange Blog

Over the past few weeks, we marked an anniversary of sorts in the Northeast Ohio entrepreneurial development ecosystem. Three years ago, funding began to flow to create the Northeast Ohio Entrepreneurial Signature Program (ESP), and its flagship new program, TechLift. This funding came from Ohio’s Third Frontier Program with the explicit goal of significantly enhancing entrepreneurial outcomes in Northeast Ohio as well as other regions of the state. Interestingly, I am writing this “look back”, just as the voters of Ohio “look forward” to decide on May 4th whether to approve future funding for Third Frontier that would continue to support such entrepreneurial development programs into the future. 

The TechLift concept was influenced by my experience as a part time Entrepreneur-in-Residence (EIR), coaching companies through the JumpStart ASSIST process. Through this process, we worked with companies to ensure that they were “putting their best foot forward” in presenting to JumpStart for funding consideration. We helped the companies hone their message, coached them through strategy, key plans, milestones, market considerations, and other issues facing startups. Three things jumped out at me from this experience that became key to TechLift’s approach:

• Coaching Counts — Companies could make significant progress working with someone who has “done it before”, even in a relatively short period of time.
• The Technology Matters — A coach or mentor who understands the technology or market area that a company plays in can help them progress much further and faster.
• We Needed To Do More — The reality of JumpStart’s funding and model meant that, by definition, we couldn’t possibly fund or provide ongoing support to all of the companies who showed promise.

With a modest amount of funding from Third Frontier, as well as the Burton D. Morgan Foundation, TechLift hired five EIRs focused on Ohio’s five key technology areas: Energy, Electronics, BioSciences, IT, and Advanced Materials. To be considered as an EIR, a candidate had to have the following:

• Significant experience in the specific technology area
• Been a founder or CEO of a startup
• Raised money, preferably venture or angel funding, for a small company

TechLift’s first EIR started in May 2007, and the other four were added throughout that year. One, Ron Zieske, subsequently became CEO of a local company and was replaced by Vinny Gupta. The results have been stupendous: over $25 million in state verified follow-on funding, and over $50 million if you count the companies that were coached by TechLift and went on to receive or be considered for JumpStart Ventures investment. Additionally, the TechLift group has been a centerpiece of the tremendous growth of the Northeast Ohio technology entrepreneurial ecosystem, working with many others including: The Innovation Fund, Cuyahoga County’s North Coast Opportunities Fund, the incubators of NEOinc, BioEnterprise, and many others. This central role was made stronger in 2009, when TechLift became a part of JumpStart, as JumpStart TechLift Advisors. As a result, JumpStart’s offering to the community has been significantly broadened.

By far, the biggest contribution made by JumpStart TechLift Advisors is the direct coaching of entrepreneurs — helping them to define their business plan and approach, guiding them through the funding opportunities in the region and beyond, and sometimes telling them the things they don’t necessarily want to hear (but need address in order to grow). Here are just a few examples of real scenarios that show the difference JumpStart TechLift EIRs have made. They:

• took a materials company that was generally thought to be “stale, with no chance for funding” and helped them re-define themselves, attract capital, attract new management, and start over. The company has raised money, and could be one of the region’s ‘bright stars’ in the future.
• identified a great cleantech technology at a university, connected them to the right people to get started with commercialization, and helped them acquire seed capital. Since then, the company has attracted a new CEO and significant capital, and is also on the way to being one of the regions ‘stars’.
• helped an electronics company, that had previously been turned down for capital, to re-form its capital base, turning debt into equity, and giving the company a new lease on life.
• recognized a high potential CEO and idea in an IT company. Then, the team worked with the company to hone the message and tighten the business plan, so it could go on to raise the money it needed to develop the idea.
• coached a medical device company to attract capital from both inside and outside the region, after they had previously been turned down by some of the early-stage funders in the region.

These are just a few examples of how the coaching from JumpStart TechLift EIRs has lead to measurable results, and a better entrepreneurial climate for Northeast Ohio. The great thing is that I could list 10 times as many examples. The coaching and the process works!

Economic development positions can be somewhat fleeting, somewhat by definition. What the best economic development people bring to the table is their ‘real world’ experience. Paradoxically, the longer someone is in one of these positions, the more removed that experience becomes. When one does a job where you ‘give back’ to the community, you mostly hope that what you do during that time actually makes a difference. The TechLift EIR team of Kent Kristensen, Ron Zieske (TechLift alumnus), Donna Richardson, Chuck Birchall, Dave Nestic, and Vinny Gupta, can look back at the TechLift experience with pride, knowing that they have truly “made a difference” for Northeast Ohio, its economic revitalization, and its entrepreneurial community.

As you contemplate your vote on Issue 1, to renew and continue the Third Frontier program in the May 4th election, please consider how important Third Frontier funding is to programs like TechLift Advisors, as it enables JumpStart and others to provide such support and funding to Ohio’s current and future entrepreneurs. Vote YES on Issue 1!

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.

Over the past month or so, I’ve taken you through some of the organizations behind the transformation taking place in our region around entrepreneurial development. These last two round out the group quite well — and bring some very unique strengths to the table. And, if you missed parts one through three, make sure to check them out too.

Akron Global Business Accelerator

Akron Global Business Accelerator (AGBA) was formed in 1983, and in its nearly 27 years of service, has provided business assistance, highly effective space, and a superb entrepreneurial environment to Akron area technology companies. AGBA’s longevity is largely due to its ability to react to changes in the environment.

How it works: AGBA offers very nice, edgy office space in a converted, 7 floor manufacturing facility. In addition to low rent, AGBA offers on-site entrepreneurial support, provided in partnership with JumpStart TechLift Advisors. The facility has been popular — it has truly become a “place to be” for entrepreneurs in the area. The large number of tenants creates an extremely robust and energized entrepreneurial environment, where companies are learning from each other, and leaning on each others’ expertise and experience.

Results: In terms of state defined follow-on funding and revenue metrics for its clients, AGBA leads the group of Edison funded incubators in Northeast Ohio. The incubator has grown to include nearly 50 companies, and its expansion plans continue indefinitely. AGBA was awarded the National Business Incubation Association’s 2008 Incubator Innovation Award as one of the nation’s best incubation facilities.

Why it works: AGBA works because it keeps innovating, pays attention to the facility’s environment, connects with funders and other support mechanisms, and is highly supported as a community resource by the city of Akron and other stakeholders. AGBA actively reaches out to companies when they receive funding from early-stage structures like JumpStart Ventures, North Coast Angel Fund, and works closely with JumpStart TechLift Advisors, The University of Akron, and others.

Youngstown Business Incubator

Youngstown Business Incubator (YBI) is a key community resource for entrepreneurial rebirth in the Mahoning Valley area. It has achieved spectacular results by focusing on one area: software.

How it works: YBI offers office space and business mentoring services to its clients involved in one business area: business to business software. The modern facility is in downtown Youngstown, and is the centerpiece of the city’s revitalization. The initial rent is very reasonable: free. Once a company has gotten some traction and achieved some success, they are asked to pay reasonable rent. Also, “veteran” companies are expected to coach and help “rookie” companies.

Results: YBI has seen a great deal of success, not only in receiving national attention (The Wall Street Journal, and others) for its efforts, but also in the success of its companies, Most notably, Turning Technologies has raised $8 million in capital, hired over 150 employees, and was named “the fastest growing software company in America” by  Inc. magazine. YBI has opened a new 30,000 sq. ft. facility, and continues to lead Youngstown’s downtown revitalization.

Why it works: YBI works largely because of focus. Since it only caters to business to business software companies, YBI is very good at working in that area, understanding the nuances, and how to be successful. Also, through focus, YBI creates tremendous synergy amongst its tenant companies, and a noticeable sense of energy and purpose in the facility.

This brings the ‘Getting It Done’ to an end. I hope that you enjoyed digging a bit deeper into a few of the entrepreneurial support structures that are transforming Northeast Ohio’s entrepreneurial landscape. As I mentioned at the outset, these are not the ONLY successful structures, just some notable ones. If you’d like to share others successes of note you know of — comment here to let us know. We’re always looking for more great stories to tell about the positive transformation taking place in our region.

High growth entrepreneurism has really caught fire in Northeast Ohio, and I really believe that if we aren’t there, we are well on our way to becoming “the best place in America to start and grow a small technology company.”

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.

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.

I introduced ‘Getting It Done’ in my last post featuring BioEnterprise and JumpStart Ventures. Here’s Part 2 — highlighting two additional organizations that are playing pivotal roles in our entrepreneurial ecosystem.

JumpStart TechLift Advisors

JumpStart TechLift Advisors started in 2007 as TechLift, the most visible new program in Northeast Ohio’s implementation of the state’s Entreprepreneruial Signature Program. In 2009, TechLift became part of JumpStart and evolved into what is known today as JumpStart TechLift Advisors. 

How it works: JumpStart TechLift Advisors provides business consulting, support and funding access to Northeast Ohio’s technology entrepreneurs. Five Entrepreneurs-in-Residence (EIRs), all former founders/CEOs who have raised capital and have significant domain experience, deliver these services and connections. The advice given is direct and hard-hitting. JumpStart TechLift Advisor EIRs are often an entrepreneur’s first and prime connection point to Northeast Ohio’s entrepreneurial support network, as they are tightly linked into funding vehicles and processes, and other support structures. 

Results: JumpStart TechLift Advisor’s results have been significant, both numerically and in terms of effects on Northeast Ohio’s entrepreneurial landscape. JumpStart TechLift Advisors has connected with over 700 technology entrepreneurs, and has given at least 3 hours of support to over 400 clients. These clients have raised more than $25 million in follow-on funding, grant funding and incremental revenue (state defined Level A metrics), a number which increases to more than $35 million when those clients who subsequently attracted JumpStart Ventures funding are included. Just as importantly, JumpStart TechLift Advisors has become a critical organization for making Northeast Ohio one of the best places in the U.S. to start and grow a technology business.

Why it works: JumpStart TechLift Advisors filled an important gap that was inadvertently created with the success of, and necessary selectivity of JumpStart Ventures and BioEnterprise. JumpStart TechLift Advisors has been able to offer support to a broader group of entrepreneurs, especially those who are not yet ready for those other structures, but who, nonetheless, have potential to be developed. Coincident with the formation of the original TechLift came a number of earlier stage funding vehicles in the region designed to augment our already growing early-stage capital structures. JumpStart TechLift Advisors is the natural connection point for these funding vehicles and the entire Northeast Ohio entrepreneurial ecosystem.

JumpStart Inclusion Advisors

Although formalized as a JumpStart Inc. line of business in 2009, JumpStart Inclusion Advisors got its start in JumpStart’s inclusion efforts as early as 2005, and is gaining momentum as a template for minority technology entrepreneurship development. 

How it works: Although rates of general entrepreneurship are higher amongst females and minorities, as compared to the general population, the rate of high growth, venture investable entrepreneurship in these segments is significantly lower. JumpStart Inclusion Advisors takes a multifaceted approach to addressing this, starting with a strong outreach program designed to raise awareness and identify potential opportunities. Next, is a strong support program, driven by highly experienced Entrepreneurs-in-Residence, coordinated with JumpStart TechLift Advisors and other organizations, ensuring that minority and female entrepreneurs get the coaching and direction to help maximize their potential. Lastly, JumpStart Inclusion Advisors connects clients with funding sources, both directly within JumpStart and indirectly through a national network, to appropriately capitalize the venture. 

Results: Woman- and minority-led companies supported by JumpStart’s inclusion efforts have raised over $20 million in capital since inception, including $5 million from JumpStart Ventures. Additionally, JS Inclusion Advisors has helped start the Emerging Market Venture Partners Fund, one of the nation’s largest early-stage minority focused venture funds. JumpStart Inclusion Advisors has quickly emerged as one of the best organizations in the country promoting and developing high growth minority entrepreneurship,

Why it works: JumpStart Inclusion Advisors works because it takes a very focused, disciplined, and connected approach to addressing an underserved segment of our population. It works with system and vehicles currently in place, augments and goes beyond those vehicles when appropriate and productive, and sets high expectations for participating entrepreneurs.

Next in the series: North Coast Opportunities Technology Fund and The Innovation Fund of the LCCC Foundation 

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.