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.

Recently, Malcolm Gladwell wrote an article called “The Sure Thing” in The New Yorker which shares the “entrepreneurial stories” of individuals such as media mogul Ted Turner and hedge-fund manager John Paulson.

I found this article fascinating because it speaks to something that I believe most entrepreneurs do not truly understand. And that is in order to realize very significant success in pursuing an entrepreneurial venture, the best entrepreneurs have a deep understanding as to why their products or services are going to be successful against the competition — and in many cases they understand this before they have even created the product.

Most entrepreneurs fall in love with their products or services. This article speaks to how both Turner and Paulson became experts regarding the industries their companies were operated in and how some of the “fundamental truths” in these industries were 100% wrong. These entrepreneurs, with deep insight and understanding, did the unthinkable by thoroughly understanding a few fundamental truths regarding their industries that others did not see or ignored.

Gladwell’s article is based on a new book called “From Predators to Icons,” written by French scholars Michel Villette and Chatherine Vuillermot who set out in the book to uncover what successful entrepreneurs have in common. This book shares that truly successful business leaders are anything but a risk-takers. But rather predators who seek to incur the least risk possible while hunting.

Every startup entrepreneur should read this article to help them to pause and consider some of the fundamental truths they are operating under as they pursue their entrepreneurial dreams. In most cases, there is likely going to be some additional homework they should do to increase their likelihood for sucess and reduce the risk of their new venture.

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’d never heard of Marc Canter until yesterday, when I read that he’s moving to Northeast Ohio to help us become a hub for multi-media companies. According to his blog, he’s already connected to a bunch of influential Northeast Ohioans, including some of my colleagues here at JumpStart. His idea is big, bold and audacious — just what we need more of here in NEO - but will not be accomplished overnight nor by just wishing it so. It will take a city of people with the same vision and motivation all pulling in the same direction, so I hope he has the stick-to-itiveness to deal with the day-to-day blocking and tackling that it takes to change a culture.

While only a small part of the change trying to happen in NEO, JumpStart, since its founding in 2004, has been about trying to change a culture, primarily as it relates to the merits of a high growth business model funded by venture capital. Northeast Ohio has not generally been viewed by venture capitalists as a place to find high growth companies. Solid, slower growth manufacturing companies, yes, but high growth, high tech, get-in-early-and-sell-in-five-years companies, no. And, for most of the companies that are created here, the entrepreneurs who run them seem to be averse to venture investors who are viewed more as “vultures” rather than helpers.

Part of what JumpStart has been attempting to do over the past five years is help our clients understand that while very good things come from building a high growth company (personal wealth creation, jobs) these type of businesses can rarely get where they need to be, as fast as they need to be, without an infusion of capital from someone else. And, typically, this type of risk capital is only available from venture investors. So, while we’re often accused of “pushing” our companies toward raising venture capital, we’re really just focused on encouraging our entrepreneurs to pursue high growth business models that lead them to a logical exit (sale of company, IPO or recap). In so doing, we find ourselves trying to change a culture that, historically, has tended to view venture capitalists as the bad guys. The bottom line for us is this: if growth can occur without the use of someone else’s money, that’s great…it’s just that it’s more the exception than the rule.

But, don’t just take it from me. There are others out there reciting the same sonnet. There are a number of good articles out there on when to take VC money including: 5 Milestones to Reach Before Raising Venture Capital, and Should I Take Venture Capital Money?

Lynn-Ann Gries is the Chief Investment Officer of JumpStart Ventures. She previously worked in the investment banking departments at both McDonald Investments and Smith Barney (now part of Citigroup), and in the sales and trading area at Morgan Stanley. She received her MBA from New York University’s Stern School of Business and her BA in Economics from Smith College. She currently serves on the board of the Fund for the Future of Shaker Heights, the Great Lakes Science Center and Summer on the Cuyahoga (SOTC).

We often turn entrepreneurs into heroes — toiling day and night through seemingly insurmountable barriers in order to take a passion, an idea, and a dream to market. And that’s OK, though truth be told I have always believed that in a thriving entrepreneurial economy, entrepreneurs should be seen as commonplace capitalists like everyone else. I mean, I don’t want them to be treated as rare heroes, because that means we don’t have enough of them. I want them to be regular Joes and Joannes who wanna make a ton of money.

But that’s not actually what I’m here to blog about. I’m here to blog about the husbands, wives, and partners of entrepreneurs. Because they…well, they are the heroes, if you ask me. They often are the ones who adjust their and their family’s lives to the fact that Mommy or Daddy Entrepreneur doesn’t yet have a market salary and so everyone’s eating hotdogs again for dinner tonight.

“Hey kids, it’s hotdogs every night for the next three months,
while Mommy/Daddy Entrepreneur pursues
her/his to-date unlucrative dream.”

“Hey kids, no vacation this year because Mommy/Daddy Entrepreneur
had to cut her/his salary in order to make payroll.”

“Hey kids, Mommy/Daddy Entrepreneur is not home
for (hotdog casserole) dinner again because
the new widget Mommy/Daddy bet her/his career on isn’t working
(and by the way we don’t know if it’ll ever work).”

In addition, these unsung heroes (spouses) might work nights and weekends, or work two jobs, in order to pay for the entrepreneur’s desire to pursue their dream and passion. They often defer their own personal dreams so that their spouse can pursue her/his dream. They adapt over time, simply weaving their spouse’s entrepreneurial dream into their own future; they learn to treat the dream as their own despite the fact that they have little control over the outcome. They often do all of this with joy, grace, humor and beauty, and sometimes, to be sure, with frustration and even a sense of despair. While I think many spouses make sacrifices for their husband’s or wife’s career, I think with entrepreneurs it’s even greater: the dream all encompassing, the uncertainty overwhelming, the pay less, and the risk higher.

So, consider this blog my homage to these spouses of entrepreneurs. They are not only the most common and unsung angel investors out there, but — at the risk of being simplistically melodramatic — oftentimes they are a type of hero. 

I think a journalist or writer ought to do a series that celebrates the spouses (or partners) of Northeast Ohio entrepreneurs.

What do you think?

Becca Braun is President of JumpStart Ventures. She founded and led a number of early-stage companies and organizations, as well as worked as a private equity investor and management consultant. She received her MBA from Harvard Business School and her BA in Linguistics from Harvard University. She is keenly interested in the intersection of wealth creation and broad-based regional economic growth.