First-Round recipients include unique technology, service and advanced manufacturing firms.
JumpStart Inc., Northeast Ohio's entrepreneurial development and funding organization, has committed to investing as much as $1,230,000 into five area companies in its first major round of funding.
The funding round includes initial investments in four Northeast Ohio companies and a second investment in Stanton Advanced Ceramics, which was the first announced recipient of JumpStart funding in July.
"This represents JumpStart's first full round of financings," said JumpStart CEO Ray Leach. "We are impressed by the energy we saw from the region's entrepreneurial community in the first application round. There are plenty of great ideas emanating from Northeast Ohio, and we've worked hard to choose the best among them."
Leach noted that JumpStart's investments are targeted to companies with a potential to achieve sales in the range of $30-50 million within five to seven years. In addition to investing, JumpStart will provide extensive management support for the companies it funds.
The first-round investment recipients, drawn from nearly 150 submissions received by JumpStart from entrepreneurs across its fifteen-county service area, include the following:
Ayalogic, Inc., based in Akron, is the developer of ImVox, a highly secure instant voice messaging/voicemail system that allows real-time recording and transmission of voice messages over both computer and phone networks. The system allows users to receive and record voice messages whether or not a telephone is currently being used, and also allows access to messages via phone or computer. Ayalogic's founder, President, and Chief Technology Officer is Mike Rojas, a Northeast Ohio native with more than 20 years of experience in the computer and telecommunications software industry. JumpStart is co-investing in Ayalogic with Cleveland-based Early Stage Partners LLC, JSFund I, and Pittsburgh-based Draper Triangle Investors, which recently opened a satellite office in Cleveland. Ayalogic will receive an immediate investment of $270.000.
Day-Day, Ltd. has developed a unique,patent-pending product which provides advertising for games of chance. Day-Day's founder and CEO Dave Davis, an experienced marketing and printing executive, intends to use a combination of funding from JumpStart, Early Stage Partners LLC, and private individuals to perform test-marketing with a variety of potential customers and partners. Day-Day will initially receive $50,000 from JumpStart and an additional $50,000 from other investors, and will qualify for an additional $75,000 from JumpStart and an equal match from other investors in a second round, based on milestone achievement.
Embrace Pet Insurance, the brainchild of entrepreneurs Laura Bennett and Alex Krooglik, is aiming to become a leading direct-to-consumer provider of pet health insurance policies. The two Wharton School MBA graduates, both with experience in the insurance industry, developed the concept for the business while at Wharton, where they entered the business plan into the school's annual Business Plan Competition and won first place. The two have developed proprietary veterinary actuarial tables and established a highly customizable menu of insurance options. The U.S. market for pet insurance, which allows pet owners to avoid catastrophic healthcare costs for their pets, doubled from $61 million in 2001 to $120 million in 2003, and is expected to grown to $500 million by 2008. Embrace Pet Insurance will receive $80,000 immediately and, as it achieves specified milestones, an additional $255,000 in two more investment phases.
PreEmptive Solutions, Inc. is a developer of software "obfuscation" and size reduction products designed to help businesses secure their intellectual property assets. In essence, PreEmptive's products allow developers of software to disguise the product's code, eliminating the possibility of "reverse engineering", a process by which unprotected software can be pirated. The company's patented technology was developed by co-founder Paul Tyma, currently vice president and chief scientist, and is based in his Ph.D dissertation at Syracuse University. PreEmptive already has over 2,000 customers for its software products,and is looking to expand its market reach and to develop new products for the software development tools market, which currently totals $4 billion and is expected to grow to $5 billion by 2006. Serving as President of PreEmptive is Gabriel Torok, who has over fifteen years of experience in software development. PreEmptive will receive $75,000 initially, and can qualify, based on performance, for an additional $175,000 in three later disbursements.
Stanton Advanced Ceramics received the very first JumpStart investment in July of 2004. The company's founder Karl-Heinz Schofalvi has developed a patent-pending technology for producing thermally shock resistant high temperature ceramic matrix composites (CMC). Thermally shock resistant materials are designed to withstand extreme cycles of heating and cooling. This technology is currently targeted for the markets of refractories, advanced ceramic applications and fuel cell insulators. The first investment funded prototype production of Stanton's products. This next round of financing will be used to test the products with clients for use in steel production, advanced refractory testing and fuel cells, and then to garner early development revenues with these, and additional customers. Stanton, which received $50,000 in JumpStart funding in July, has qualified for a total of $250,000 in this round, with $75,000 immediately available to the company and an additional $175,000 to come in three later disbursements based on the achievement of key milestones.