Thursday, January 29, 2009
Posted by Ray Leach
Yes, recessions can happen anywhere - even in Silicon Valley.
Now is the time for Northeast Ohio to begin to catch up to places such as San Jose. Can you imagine what would happen if startup companies that JumpStart sees everyday could get access to some of the "Obama Stimulus" or "Medical Mart" monies?!
Overnight, Cuyahoga County would become a pre-seed company sensation. At least 50 new companies could access seed funding each year. These companies would raise at least $1B in private sector investments by 2020. Cleveland would be "on the map" for entrepreneurs from all over the world overnight!
Now it is true that this approach would not require a lot of construction jobs - and we would not need new hotels in town in the next few years to handle all of the VC's and investors that would be flooding into our community - but I think in the long run it could very well make a larger difference because it would allow our community to make hundreds and hundreds of "bets" on our own citizens and the ideas that they have to help grow our economy and provide opportunities to our citizens.
Perhaps the opportunity to access Medical Mart-type monies may have passed, but Obama's stimulus program could also do many of the same things. What better state and region to support with such initiatives than Northeast Ohio and Greater Cleveland given that our region needs this kind of shot in the arm more than any other region/state in the U.S.
With all of the money being prepared to "stimulate our economy" using untried programs that "might" work - we have business models in Northeast Ohio now which show that they can generate at least a 5x leverage on public-private sector investments within 4 years with a promise to hit 10x within 7 years.
While these initiatives might not have the political power or influence of other projects - they have the ability to deliver results. We need to leverage these models to make sure that we have a chance to come out of this downturn with an increased chance to be the Silicon Valley of 2050 - investing in hundreds of pre-seed opportunities is a way we can make this happen.
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.