Last week, I attended the third-annual VentureOhio Gala, an event designed to celebrate the year’s biggest entrepreneurial success and share the results of the annual Ohio VentureReport. But as I enjoyed the night, I couldn’t help thinking how much different things used to be.
I left California in 1995, moving to Cleveland to join a young startup company. At the time, there was so little buzz or interest around here in tech startups. As I toiled away with my team to launch and commercialize five products over three years, I was initially shocked by the lack of media and/or community interest in what our company was doing.
I came to understand that many here were still reeling from the decline of the manufacturing industries that once made Northeast Ohio such an important part of our national economy. These hard years illuminated a real need to diversify our economic base by helping to create and support the kinds of young, high-potential companies that would create jobs and drive the next wave of economic growth.
This was one of the founding principles of the Ohio Development Services Agency’s Ohio Third Frontier (OTF) initiative—an initiative that has been so critical for JumpStart, our NEO partners and our many sister organizations across the state.
Fast-forward two decades and here I am—surrounded by hundreds of people and dozens of organizations dedicated to funding, supporting and celebrating Ohio startups
Truthfully, I don’t think there has ever been a better time to be part of Ohio’s venture ecosystem. Here’s three reasons why:
There Are More Startups Than Ever, And They Are Making Major Impact
In Northeast Ohio alone, JumpStart and its partners have helped more than 1,100 entrepreneurs obtain the space, investment, advice, support and connections they need to generate more than $1.7 billion in revenue, create/retain more than 10,000 total jobs and generate more than $3 billion in cumulative economic impact for the state over the last six years. Across the state, our sister organizations such as Rev1 Ventures in Columbus and both CincyTech and Cintrifuse in Cincinnati are doing similar work with startups in their regions.
This level of activity from young tech companies was unheard of in Ohio 10 years ago—let alone 20. Today, we have a growing base of truly exciting tech companies that are pioneering new technology, commercializing products and creating both jobs and economic growth. TOA Technologies, CardioInsight, CoverMyMeds, Assurex, OnShift, Explorys, 7signal, LISNR—the list goes on and on.
There Is Real Capital Available In The Midwest
Capital is the fuel for startups, simple as that. Without a study supply of funding, you cannot have homegrown entrepreneurial success stories. At JumpStart we’ve invested more than $35 million in more than 80 Ohio companies. Still, large-scale follow-on capital has traditionally been limited in the Buckeye state—especially the larger “Series A” rounds.
That’s why the last 12 months has been so exciting.
Within the last year, JumpStart has announced two new funds (and another recapitalized fund) totaling $40 million. Meanwhile Rev1 Ventures and CincyTech have launched a $22 million and $30 million fund, respectively. These funds join the growing number of private Midwest funds such as Draper Triangle, Mutual Capital Partners and Allos Ventures. And then there’s Drive Capital, the massive Columbus-based VC fund launched by Silicon Valley veteran (and VentureOhio board chair) Mark Kvamme that just finished committing their first $250 million fund and have now announced a second $300 million fund for Midwest startups.
Looking at numbers like these, it’s easy to see why Kvamme and investing partner Chris Olson are super-bullish about the future of homegrown startups.
Collaboration Is Only Getting Stronger
Since the very beginning, the Ohio Third Frontier program has been critical in getting us to where we are today. But for many years, the work has been done through partners who work mostly at the local and regional level. However, as the companies we have funded and supported get larger and more successful, they stop becoming “local startups” and start thinking much bigger.
In order to continue supporting these companies the way they need to be supported, organizations like JumpStart, Rev1 and CincyTech have to think bigger too. That’s why we’re looking for new ways to collaborate, share deal flow and even co-invest whenever and wherever we can to help high-potential Ohio startups reach their early-stage capital needs.
Ultimately it’s this kind of a collaboration that will help our state take its next step toward becoming a world-class hub of venture capital activity—a place where great startups can find everything they need to go from concept to exit right in their own backyard.
There is much work left to be done. But I think it’s safe to say we are living in a very different Ohio than the one I found when I moved here in 1995. And though the time has absolutely flown by, it’s hard to be too nostalgic—because I truly believe our best economic days still lie ahead.