JumpStart program gives boost to small-business ventures with high growth potential
Provided by Akron Beacon Journal
Written by Paula Schleis
The kind uncle that always has change in his pocket.
The pit crew that supports the race car driver.
The family with a benevolent father, caring mother and helpful older cousins.
Those were just some of the analogies entrepreneurs used in describing their relationship with JumpStart Inc. at the organization's annual meeting Thursday.
JumpStart was formed four years ago, a nonprofit venture investment group with the goal of finding and helping startup businesses in Northeast Ohio with fast growth potential.
Because of the organization's due diligence process — they have invested in just 29 of 1,280 companies that have applied — their portfolio has won instant clout with major venture capital firms.
JumpStart's collective $12 million investment in those 29 companies has attracted another $35 million from other investors.
Philip Brennan, chief operating officer of reXorce Thermionics, said after JumpStart gave his company $400,000 and assigned it an entrepreneur-in-residence last year, ''Things started moving quicker than we could even imagine.''
The company, which has invented an engine capable of turning waste heat into energy, is based in the Akron Global Business Accelerator.
''We thought we were operating under the national radar, incubating away in Akron and doing what we do. . . . We were wrong,'' Brennan said.
Within six months of Jump-Start's investment, reXorce turned its theoretical engine into a practicing model, entered into several strategic partnerships with major companies, and is on the verge of a major investment deal that will be revealed soon, Brennan said.
Chief Executive Officer Claude Kennard of MAR Systems, another Akron incubator tenant, spoke about the challenges of finding investors. MAR has developed a process for removing metal contaminants from drinking water and industrial wastewater.
Even after becoming a technological partner with the U.S. Environmental Protection Agency in 1999, Kennard said it was difficult finding the money to advance development of the water treatment system.
MAR became JumpStart's 13th portfolio company with a $350,000 investment in 2005.
''Seeking money from the angel and investor community took us out of our comfort zone,'' Kennard said. ''However, our relationship with JumpStart helped us get through that very quickly.''
Earlier this year, a West Virginia venture capital firm gave MAR $650,000. Kennard also credited JumpStart's influence with helping MAR attract ''a top team of managers'' and a ''dedicated advisory board,'' as well as offers to speak at national conferences and profiles in magazines and national news stories.
In addition to hearing from some of its portfolio companies, JumpStart received kudos from some of its economic development partners, including local, state and federal agencies.
Among them was Deborah Hoover of the Burton D. Morgan Foundation in Hudson, who said her organization is proud to have given $850,000 in grants to JumpStart in the past three years.
''We view JumpStart as a powerful catalyst for energizing the entrepreneurial spirit across the region,'' she said.
In addition to investing and coaching its portfolio companies, JumpStart has a slate of outreach efforts that include regular networking events for entrepreneurs, an online network called IdeaCrossing, and an ''economic inclusion'' program with resources for minority- and female-led businesses.
Before the annual meeting started, JumpStart had 27 portfolio companies. Chief Executive Officer Ray Leach concluded the meeting by announcing the two new investments.
CerviLenz Inc. of Bainbridge Township will receive $350,000 to commercialize a medical device that can predict preterm birth risk.
An undisclosed investment is also being made in Stack Media of Cleveland, a magazine that addresses training and nutrition for high school athletes.
Leach also made a brief presentation about another Akron incubator tenant.
InSeT Systems and the inertial navigation technology it's developing for locating trapped coal miners was recognized as a top 10 invention of the year by Popular Science magazine.
''We're thrilled that this company, three weeks old in the JumpStart portfolio, has received such national recognition,'' Leach said.