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.

Ohioans did something bold on May 4th. By passing the $700 million extension of the Ohio Third Frontier via Issue One, they assured that the progress Ohio’s high-tech economy has made will not only accelerate, but perhaps more importantly, is going to out-accelerate not only all of our neighboring states in the Midwest, but perhaps every state in the U.S.

As we all know, most states are going to be facing tremendous budgetary challenges starting next year. Ohio is not an exception to this fact as almost all observers believe that Ohio legislators are going to be facing a budgetary deficit of $6-8 billion over the next two years. As a result of this reality, many existing state programs are going to be facing tremendous cuts. This is why renewing Ohio Third Frontier today – well before the gubernatorial election in November as well as before the budgetary challenges we will be facing next winter and spring – was so critically important. The passage of Issue One will provide resources to competitively reviewed projects that have the potential to attract or keep Ohio’s brightest individuals, and to accelerate the growth of companies that have the promise to (or already) employ hundreds or thousands of Ohioans and/or have the opportunity to attract tremendous amounts of private sector capital. Over the last eight years, Third Frontier projects created 58,000 jobs. I would anticipate that the continuation of Ohio Third Frontier will create at least another 50,000-70,000 jobs in the next five years.

If Issue One had not passed, Ohio would have likely quickly fallen back into the pack of neighboring states trying to find resources to accelerate innovation and entrepreneurship initiatives – and given the budget situation – almost all of the state’s budgetary cupboards would be nearly bare.

Over the last three recessions, Ohio did not perform well coming out of the downturns. With the help of the recent successful Issue One campaign, Ohio can break this trend in the next couple of years.

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.

JumpStart, in collaboration with Governor Ted Strickland, and the State of Ohio Minority Enterprise Division, recently kicked off an exciting new initiative called Launch100 which seeks to create a pipeline of 100 high potential minority and inner city based businesses across Ohio over the next 5 years. If the turnout at the event, which exceeded 250 attendees, as well as the interest that has followed is any indication of the potential of this initiative, we are even more excited about the opportunities for growth and expansion throughout our region.

Much has been written over the past few years about the economic opportunity that exists for our community if we had more of our region’s citizens participating in high growth entrepreneurship. In short, higher growth emerging businesses simply create more jobs. The challenge has been that many of our region’s entrepreneurs, specifically ethnic minority populations and firms based in lower income census tracks commonly referred to as the inner city, have not participated equally in the types of growth opportunities attractive to angel and venture capital investment. Absent this critical component of early-stage funding, these entrepreneurs have been led to the types of businesses that generally did not require much capital which in turn led to a greater propensity of lower growth service oriented businesses. While smaller firms have always been, and will always be a critical component of our economy, even a modest increase in more diverse businesses growing larger scale operations can have a dramatic impact on job creation for all of our region’s citizens.

Launch100 seeks to identify, educate, prepare, and connect these historically underserved entrepreneurs to the types of businesses that can at minimum achieve sales growth in excess of $15 million over the next 3-5 years, create 50 or more jobs, and be operating in or targeting an emerging industry or technology, just to name of few of the criteria.

The initiative received a tremendous surge of adrenaline from the recent kickoff event, and we are confident that at least 12-15 high growth opportunities will be identified in the initial pilot phase over the next 12-18 months. An additional 12 firms tracking to exceed $15 million in annual revenues equates to about $180 million of new revenues over time, and with one new job generally created for every $200,000 of new revenues, that’s another 900 potential jobs for our community. With a successful pilot in Northeast Ohio, the effort will then be rolled out and expanded across the entire state in an effort to reach the targeted pipeline of 100 high potential firms.

Please be sure to check the Launch100 website at www.launch100.org for more information, and to submit your application today!

Darrin is Chief Economic Inclusion Officer of JumpStart and President of JumpStart Inclusion Advisors. He founded and ran his own strategic planning and management assistance firm and spent 16 years in the commercial banking and finance industry. Darrin has an MBA from Baldwin Wallace College and an undergraduate degree from Mount Union College. He has led a series of workshops and seminars on matters of economic development and diversity.

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.