JumpStart: IdeaExchange Blog

Since joining JumpStart back in 2006 and being charged with identifying strategies to engage more of our region’s minority and women-led businesses, one of my primary objectives has been to encourage our community’s diverse entrepreneurs to increase their level of involvement in regional events and activities. There is terrific information being shared on a regular basis at these events, but unfortunately too few of our region’s diverse entrepreneurs are in attendance to receive this information. Far too often, mainstream events focused on raising angel and venture capital and growing larger scale firms fail to attract a diverse audience of attendees that is more representative of our region’s population. I have written a number of articles, blogs, and newsletters on this topic, but fundamentally nothing will change until our region’s diverse entrepreneurs decide to get engaged. Without question our event planners and community leaders need to make sure that these events are promoted and publicized through a diverse set of media channels and partners, but ultimately the decision rests with the individual to decide to attend or not.

JumpStart has taken some very exciting steps over the past few years in putting on diverse and collaborative events with such leading national organizations as The Marathon Club and The Initiative For A Competitive Inner City (ICIC), and I am thrilled to announce that we are partnering again to ensure that we build on this momentum. Rather than put on a separate event as we have done in the past, the president of the Marathon Club (and now also JumpStart board member), Carmen Ortiz-McGhee, and I are joining forces with the International Economic Development Council and the Ohio Early Stage Capital Summit for two exciting and timely events taking place next month in Columbus. Carmen and I will be leading and facilitating panel discussions at these events focusing on the specific issues that disproportionately impact high growth minority and women entrepreneurs, and it is essential that more of our community’s diverse entrepreneurs are in attendance to get connected. For more information on each conference, please visit the following pages: IEDC Conference Information, Ohio Early Stage Summit Information. I am both thrilled and honored to take part in these events this year, and truly hope to see all of you there.

I would also like to announce an exciting opportunity being put on by another of our national partners, ICIC, which is hosting its 7th annual Inner City Capital Connections Conference (ICCC) this coming November 15-16th in Los Angeles, California. The ICCC is a unique opportunity for inner city based businesses and entrepreneurs to gain direct access to investors and other funding sources that are specifically committed to growing larger scale businesses in the core urban centers of our country to help revitalize our nation’s inner city economies. Entrepreneurs interested in attending and presenting their business to investors at the event should log on to www.icic.org, or contact Hyacinth Vassell at hvassell@icic.org or via phone at 617.297.3120.

The time to get involved is now! Let’s get up, get going, and get engaged in these uniquely designed events that just might be the difference between success or failure in these rapidly and constantly changing economic times. 

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.

PerfectPitch, the national competition in which entrepreneurs pitch their ideas via a video submission and can end up presenting to the country’s leading venture capitalists, debuted in 2009 with truly 2009 marketing techniques (including the opportunity for an entrepreneur to pitch based on who submitted the best Twitter pitch).

It’s now back again and as with last year, entrepreneurs who are able to react quickly have an advantage. (The deadline is August 26th, which is two weeks away). Here’s what you do:

• Submit your pitch ONLINE - a pitch may include a written description, photos, and video about your BUSINESS or IDEA
• Deadline for submissions is August 26th, 2010. Early applicants will receive helpful feedback and may make edits to improve their pitches
• Judges will review all pitches – Top 3 win prizes and an invitation to pitch LIVE to investors and the audience of the PerfectBusiness Summit 2010

You can find full details here on entering, including the list of investors representing over $10 billion in assets who will be judging. (Did I mention that JumpStart’s own Ray Leach is one of the judges, as is North Coast Angel’s Todd Federman and venture capitalists from leading investors such as DFJ and Google?)

Cathy Belk is the Chief Relationship Officer of JumpStart. She specializes in branding, marketing communications, and business and relationship 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.

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.

Last week, Dan Primack continued his discussion from the week before on peHUB about the numbers being published on national trends in Venture Capital fundraising — and what it all means. His general conclusion was that the numbers are hardly worth celebrating. His three reasons why:

1. Bigger fundraising totals do not necessarily translate to better returns.
2. Even if size does matter, improving over H1 2009 is no great feat.
3. The two major databases - Dow Jones and Thomson Reuters aren’t consistent.

I couldn’t agree with him more.

I decided to engage in the conversation - and to continue the discussion here. Here is the comment I posted back to Dan:

Dan,
Thanks for bringing to light the challenges involved in data collection. Our organization takes the lead in collecting and publishing the amount of venture investment just in Northeast Ohio and it is a laborious task.

When two reputable data collectors come up with contradictory information I think the only option is to call it inconclusive, as you have wisely done. Given the uncertainty in the data, the only thing to do is talk to entrepreneurs to get real, if only anecdotal, data. Here in NEO I know that our entrepreneurs are definitely feeling more “Thompson” than “Dow Jones” – growth capital is very difficult to come by.

As you point out, big funds are not necessarily the most successful funds. I’d like to see venture turn back to its roots of smaller funds, managed by a handful of close-knit partners who have relevant backgrounds in the industries in which they are investing. Smaller funds mean smaller management fees and I think that’s a good thing. Venture investing becomes more personal, the principals have everything riding on their ability to generate great IRRs (rather than collecting current income via huge management fees.) So, I’m actually okay if the total dollars invested in venture nationally goes down, just to long as the number of firms managing the money increases.

What do you think?

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).