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JumpStart's 2009 Annual Report shares the vast history Northeast Ohio has as being a region of imaginative innovators and entrepreneurs. That attitude is alive and well today as JumpStart's portfolio ...

JumpStart's 2009 Annual Report shares the vast history Northeast Ohio has as being a region of imaginative innovators and entrepreneurs. That attitude is alive and well today as JumpStart's portfolio companies share their entrepreneurial spirit and innovative ideas that make Northeast Ohio a great place to start a business.

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JumpStart 2009 Annual Report JumpStart 2009 Annual Report Document Transcript

  • REALIZING OUR FUTURE STORIES OF ICONS, INNOVATORS & IMPACT 2009 COMMUNITY REPORT
  • “JumpStart Inc. represents the best and brightest in 21st century economic development.” –U.S. Commerce Secretary Gary Locke Table of Contents 1 Message to Our Community 2 The Path of Icons & Innovators 3 Stories of Icons 6 Stories of Innovators 12 JumpStart’s Impact 14 Recognizing Our Donors 16 Realizing Our Future
  • MESSAGE TO OUR COMMUNITY This year, JumpStart is celebrating the entrepreneurial # Reaching more than 5,000 community members and icons and innovators of our region. We are inspired by entrepreneurs to tell them about JumpStart and Northeast these visionaries who take an idea and with the right tools, Ohio’s robust entrepreneurial ecosystem while building the transform it into a company that brings wealth and prosperity skills of more than 275 entrepreneurs with JumpStart’s own to an entire community. These are the people who have educational seminars. generated prosperity for Northeast Ohio in the past, and are in the process of realizing the region’s economic future. # Creating over $75 million in economic impact in the region, including generating tax revenue of $8.3 million to the In this report, we tell the stories of Charles Brush, B.F. federal and state government. This revenue is almost equal Goodrich, and Ray Kralovic, all of whom had the vision to JumpStart’s annual budget, including funds for direct to create companies that generated billions of dollars in investments. revenues and employed hundreds of thousands of people. The region hasn’t had enough people with the vision, the # Rebranding our services to make ourselves more accessible persistence, and the leadership of these entrepreneurs. to more entrepreneurs by adding JumpStart TechLift That is why JumpStart was created: to increase the number Advisors and JumpStart Inclusion Advisors (and the related of entrepreneurs able to turn a disruptive idea into an 395 entrepreneurs these teams support) to our portfolio of impactful company, ultimately generating economic programs. prosperity and wealth for all the region’s citizens. # Raising over $10 million to support the operations and Today, we are working with a new collection of entrepreneurial investments of JumpStart. innovators. If history repeats itself, some of these individuals will help realize the transformation of our region’s We are proud of these accomplishments, but it is the progress economy once again. These entrepreneurs are following of the entrepreneurs we support that makes our work come the same paths to growth as the entrepreneurial icons of to life. Read the historical stories and be inspired by what the past, including raising capital, obtaining mentorship, entrepreneurs have accomplished, with the right tools. and accessing talent. But today’s entrepreneurs have one More importantly, consider how the current innovators are additional advantage: the support of a community which in the process of creating our region’s economic future. has created a robust entrepreneurial ecosystem, led by JumpStart, to provide them with capital and assistance. We continue to be extremely grateful to JumpStart’s donor community. Thank you for your support of our work and of JumpStart’s work in guiding companies led the Economic our region’s entrepreneurial innovators. Development Administration to recognize JumpStart as a recipient of the 2009 Excellence in Urban and Suburban Economic Development Award. JumpStart’s other accomplishments this year (ending June 30, 2009) include: # Supporting over 400 entrepreneurs with thousands of hours of free technical assistance and investing over $3.5 million in ten companies via JumpStart Ventures. PhOTO CREDIT Diann Mistelske # Assisting the JumpStart Ventures portfolio of companies in raising over $23 million in follow-on capital, and the JumpStart TechLift Advisors clients in raising $15 million, in a year with almost unprecedented challenges in fundraising. RAY T. LEACh DOUGLAS L. WEINTRAUb Chief Executive Officer Chairman J U M P S TA R T 2 0 0 9 C O M M U N I T Y R E P O R T 1
  • ThE PATh OF ICONS & INNOVATORS The paths entrepreneurs take as they build a company are similar, whether they started a business 100 years ago or start one today. The entrepreneurial icons from Northeast Ohio’s past led their companies down this high growth path and created organizations that have continued to grow for decades. The innovators JumpStart is working with today are on the same path and will continue to follow that path as they realize their potential. In the pages that follow, we tell the stories of both the icons of our past and the innovators realizing our economic future. In addition to telling these stories, we are using a chart to represent the growth path they are following. The stages in the path are from Ohio Third Frontier, one of JumpStart’s biggest supporters, and outline the different stages of growth and activities in each stage. Although each entrepreneur’s journey is slightly different, the general path is the same. STAGES: n IMAGINING (I): Idea and business model are conceptual. n INCUbATING (IN): Technology and business model are in development, but products are not yet for sale. This can include preclinical trials. n DEMONSTRATING (D): Prototype technology is completed and sales orders can be taken. Clinical trials and FDA approval occur. n MARkET ENTRY (ME): Product or technology is being sold and revenue model is determined. n GROWTh & SUSTAINAbILITY (G&S): Company is an established and growing business, with a plan to increase market share, revenue, and profits. 2 R E A L I Z I N G O U R F U T U R E : S T O R I E S O F I C O N S , I N N O V AT O R S & I M P A C T
  • ICON PhOTO CREDITS Charles Brush: Copy of an original in the Special Collections Research Center, Kelvin Smith Library, Case Western Reserve University, Charles Brush | Brush Electric Company CHARLES BRUSH, the man credited with inventing the street George was impressed and invested, and with this vote of light as we know it, was a lifelong innovator. He innovated confidence, Charles was able to raise additional money from throughout his life, from age 12, when he made his own the Telegraph Supply Company. George’s company also static electricity machine out of household items, to nearly offered technical assistance in developing, manufacturing, 30 years later, when he built the world’s first automatically and marketing the dynamo. With the capital and operated wind turbine to power his home. Today, Charles assistance, Charles filed his first of 50 patents Cleveland, Ohio. Arc Lamp: Permission for use courtesy of Cleveland Public Library Photograph Collection. And the Brush’s legacy is cemented in the role General Electric and continued to develop the arc lamp. His growth plays as a global innovator in energy creation. continues: research led to the ring clutch, an innovation that 2009: 300,000 let the arc lamp operate reliably and efficiently employees Charles quit his job selling iron ore in 1877 to work worldwide without supervision, and led to increasing the on his idea for a dynamo electric engine and a 2009: $183 amount of fuel in the lamp, allowing it to run billion in sales powered arc lamp. At that time he looked to a 1891: Merges all night without maintenance. Two years after with Edison childhood friend for capital. George Stockly, General giving up his day job, Charles unveiled his Electric Vice President of Cleveland’s Telegraph Company arc lamp system at what is now Cleveland’s Public Square. Supply Company, heard from his to become According to The Plain Dealer, twelve lamps simultaneously 1880: General own company directors that Reorganizes Electric Co. lit the square as thousands watched in amazement. company to electric lighting was “a form Brush field without a Electric By 1883, the systems were across the country from Boston 1878: Gains Company future.” But endorsement to New York to San Francisco, the company’s revenues from The 1883: $2 1877: Franklin million in reached $2 million, and it had a workforce of 400 associates. Receives Institute revenue By 1891, the company had merged with its top competitor, investment 1883: 400 1879: Unveils 1876: Charles and guidance electric lighting employees Thomson-Houston Electric Company, and then again completes dynamo from system on with Thomas Edison’s company to form General Electric. design improvements childhood Cleveland’s on paper friend George Public Square The mergers created the GE we know today, which has 1877: Works full time Stockly to develop dynamo and over 300,000 employees with revenues of $183 billion, electric arc lamp and remains at the forefront of energy creation. I IN D ME G&S J U M P S TA R T 2 0 0 9 C O M M U N I T Y R E P O R T 3
  • Dr. Benjamin Franklin Goodrich | B.F. Goodrich Company ICON develop an extensive research department and allow B.F. to invent many of the company’s initial rubber products, laid the foundation for innovation in rubber for the next century. Out of the Goodrich research facility came innovations Akron, Ohio would never have that put rubber tires on been dubbed the “Rubber Capital automobiles, equipped every of the World” if it weren’t for U.S. World War I plane with DR. BENJAMIN FRANKLIN aircraft tires, provided airplanes (B.F.) GOODRICH. With an with de-icers, and put Alan entrepreneurial mindset and a Sheppard in a spacesuit. The vision for the future, B.F. brought effect the B.F. Goodrich Company his small, innovative rubber company had on the city of Akron as one of the to Akron and laid the foundation for an largest tire and rubber manufacturers And the international organization that would introduce in the world was transformational; growth continues: the world’s first car tire, aircraft tire, and spacesuit. Akron became the “Rubber Capital of 1949: the World” as additional industry leaders such Produces first B.F., a physician and inventor, invested in a small New as Goodyear and Firestone came to the city. The B.F. passenger car tire containing York-based rubber company in 1869 with his business Goodrich Company eclipsed the million dollar synthetic 1892: 400 rubber partner John P. Morris. He used his investment to pursue sales mark in 1892, reaching $1.4 million and associates 2008: $7 his passion for inventing, but struggled to get the company employing 400 people. Its sales numbers 1892: $1.4 billion in sales going in New York. Familiar with Ohio after attending continued to climb in the 20th century million in 2008: Over sales 25,000 what is now CWRU School of Medicine, B.F. was inspired and as the Goodrich Corporation 1897: Winton employees 1888: by the financial incentives the city leaders of Akron were today, the company employs over Car Company worldwide $696,000 in sales uses and offering for manufacturing companies to relocate to the 25,000 and is continuing its markets the 1890s: pneumatic city. In 1870, seven prominent Akron citizens invested legacy of innovation. 1880: Introduces tire $100,000 pneumatic $13,600 in the company (the equivalent of $250,000 University Libraries Archival Services. stock issued tire and use courtesy of University of Akron today), which secured the company’s location in Akron. 1880: 55 experiences PhOTO CREDITS Permission for full-time rapid sales With various follow-on funding investments throughout 1870: Relocates company growth employees to Akron after $13,600 the 1870s, B.F. added qualified, experienced business 1869: B.F. investment from Akron 1880s: invests in leaders to his company. One of those individuals was civic community leaders Applies solid- NY rubber 1878: Secures angel band tire George W. Crouse, who made an angel investment in 1878 company investment and guidance technology to from George Crouse who bicycles and put his finance and business background to work becomes VP as Vice President. George’s funds, which were used to I IN D ME G&S 4 R E A L I Z I N G O U R F U T U R E : S T O R I E S O F I C O N S , I N N O V AT O R S & I M P A C T
  • ICON Dr. Raymond Kralovic | STERIS Corporation Microbiologist RAYMOND KRALOVIC, Ph.D., McDonald and Company, Invacare, Ameritrust, had an idea. He thought he could develop and other Cleveland area investors in 1987. an improved process that would sterilize the small, sensitive, and complex instruments Within three years of the venture used for minimally invasive surgery. round, STERIS began international PhOTO CREDITS Ray Kralovic: Courtesy of Ray Kralovic. System 1®: Photo provided courtesy of STERIS Corporation. The passion he had for this one shipping of SYSTEM 1 and a couple innovative solution helped define years later it made an initial public Northeast Ohio as a center for offering with revenues over $45 And the medical technologies and devices. million and employment at 200. The growth company’s innovation didn’t stop with continues: Over 25 years ago, Ray proposed the idea to his employer, Ray’s idea, as STERIS holds 280 U.S. 1998: Moves to NYSE an established leader in infection control equipment. His patents and 626 foreign patents, with another 96 2004: $1 employer however, thought the innovation was too radical U.S. and 374 foreign patents pending. Its revenues billion in 1990: Begins sales and a risky investment. After being refused R&D funding for reached the $1 billion mark five years ago and international shipments two years, Ray left his job and partnered with Ed Schneider, today STERIS employs 5,000 people with 1992: IPO on a medical engineer and entrepreneur, to work on the idea. representation in more than 60 countries. Nasdaq 1988: 1992: 200 With his first external investment in 1985, Ray completed the It remains the preeminent prevention, Manufac- employees prototype of the SYSTEM 1 Sterile Processing System and ® decontamination, and surgical tures and ships first filed his first patent. The Mentor-based company received technology company in 1988: product Completes follow-on funding from the State of Ohio in 1986 and Ray the world. regulatory began to validate the product’s marketability. To continue 1987: reviews Receives and development, he contacted Primus Venture Partners, a receives Primus market Cleveland-based private equity partnership. The fund investment clearance and put Ray in contact with Bill Sanford, President of Symark 1983: Ray’s employer denies guidance request to fund sterilization idea from Bill Associates and a healthcare consultant with a history of 1985: Moves to Mentor and Sanford who buying and selling medical technologies. Ray won Bill’s buy- founds STERIS with Ed Schneider becomes 1985: Secures funding President in, brought him in as President of the company, and received a venture capital investment of $1.2 million from Primus, I IN D ME G&S J U M P S TA R T 2 0 0 9 C O M M U N I T Y R E P O R T 5
  • From ThE iConS oF our pAST To ThE innovATorS who ArE rEAlizinG our FuTurE. “JumpStart has been critical to Juventas’ development. By leading our initial seed round and providing ongoing support, they are playing a vital role in transferring our technology from the laboratory to the successful treatment of human disease.” Dr. Rahul Aras | Juventas Therapeutics A JumpStart Ventures portfolio company DR. RAHUL ARAS has seen hundreds of biotechnology and pharmaceutical technologies come out of the Cleveland Clinic. 2008: Completes As the former Director of Life Science Commercialization at product formulation and initiates FDA-guided pre- Cleveland Clinic Innovations, he was responsible for licensing clinical animal studies dozens of technologies to industry partners, including the two 2008: Raises nearly $7 million in Series A largest biotechnology deals in Cleveland Clinic history. Of those investment 2007: Rahul launches Juventas technologies, Rahul is most excited about the one he is now Therapeutics with Dr. Marc Penn and 2009: Secures Cleveland Clinic $800,000 from Ohio working to commercialize through Juventas Therapeutics, a Center for Stem Cell & 2007: Raises $750,000 institutional Regenerative Medicine Cleveland Clinic spin-off company he helped create in 2007. investment round led by JumpStart 2009: Submits 2007: Secures $1 million through Ohio Investigational New Global Cardiovascular Innovation Center Drug application to FDA Juventas Therapeutics is developing novel regenerative therapies for first product for cardiovascular disease discovered by Dr. Marc Penn, a I IN D ME G&S Cleveland Clinic cardiologist. Rahul introduced Juventas to JumpStart Ventures while working to close an initial funding of its development milestones and demonstrated pre-clinical round that would fund early product formulation and pre- proof of concept for its lead product. During this time, Rahul clinical animal studies. JumpStart Ventures led the financing, continued to work with a JumpStart Venture Partner, executing which closed in July 2007, and included investment from North a follow-on funding strategy necessary to complete additional Coast Angel Fund, Blue Chip Ventures, FDA-guided animal studies and a Phase I clinical trial. and several local angel investors. Within INNOVATOR one year of funding, Juventas reached all Juventas closed a Series A venture round in October 2008, led by Cincinnati-based Triathlon Medical Ventures and including investment from Early Stage Partners, Fletcher Spaght Ventures, and Reservoir Venture Partners, as well as every investor from the initial funding round. Since his initial meeting with JumpStart, Rahul has raised nearly $10 million in funding, including $1 million from the Global Cardiovascular Innovation Center and $800,000 from the Ohio Center for Stem Cell & Regenerative Medicine, and is transitioning Juventas into its Phase I clinical trial. Completion of this human trial will position the company to raise additional PhOTO CREDIT Lauren Parsells funds, which will be used to further develop its lead product and expand into other clinical disease states. “JumpStart has been critical to Juventas’ development. By leading our initial seed round and providing ongoing support, they are playing a vital role in transferring our technology from the laboratory to the successful treatment of human disease.” 6 R E A L I Z I N G O U R F U T U R E : S T O R I E S O F I C O N S , I N N O V AT O R S & I M P A C T
  • INNOVATOR “The region has a tremendous asset in JumpStart, which helped us immensely initially, and continues to support us even after we have ‘graduated.’ The region’s other assets have made it very easy for me to attract talented people from other places.” Dr. Kevin Berner | Logos Energy A JumpStart Ventures portfolio company DR. KEVIN BERNER introduced the world to a new alternative Because of his company’s funding progress, Kevin was able to energy technology in 2005 through Contained Energy. But assemble a team of 25 full-time associates, many of whom hold leading the development of one innovation wasn’t enough for the Ph.D.s in their fields. Positions include research scientists, former Army Officer and McKinsey Partner, and when Contained engineers, and project managers, plus an additional 17 seasonal Energy presented yet another opportunity, he took it on. interns who are learning from experts in the alternative energy field. “Growing a renewable energy company in Kevin brought Contained Energy, which produces direct carbon Northeast Ohio is the ride of a lifetime. The region has fuel cells that use inexpensive, readily available carbon as a tremendous asset in JumpStart, which helped us fuel, to JumpStart Ventures in July 2006. Alongside another immensely initially, and continues to support us engineer, Kevin worked with a JumpStart Venture Partner to even after we have ‘graduated.’ The region’s other set aggressive technical, fundraising, business development, assets have made it very easy for me to attract and hiring milestones. During their development, Kevin talented people from other places. The found tangential intellectual property that sparked the launch excitement of a clean energy startup, in of Phycal, which develops and commercializes systems for an area with a low cost of living and growing algae and harvesting commercially viable energy tremendous cultural assets, products from the biomass. Contained Energy and newly- is a very attractive formed Phycal both became subsidiaries of a new parent package.” 2007: Raises angel investment company, Logos Energy. As a JumpStart Ventures client, and grant money PhOTO CREDIT Diann Mistelske Kevin has been successful in his fundraising efforts. Logos 2008: Raises additional angel investment and grant money Energy has raised nearly $8 million in additional investment 2008: Creates holding company 2005: Kevin licenses fuel cell Logos Energy and subsidiary for the two operating companies and levered that funding technology and starts Contained Phycal with an additional $5 million in development contracts from Energy 2009: 42 employees and interns 2006: Secures funding and guidance the Ohio Department of Development, the U.S. Army, the from JumpStart U.S. Air Force, and the National Science Foundation. I IN D ME G&S J U M P S TA R T 2 0 0 9 C O M M U N I T Y R E P O R T 7
  • “We were able to land our beta customer in large part because of our partnership with JumpStart TechLift Advisors. They are well connected in the technology field and got us in touch with the right people.” John Collier | M.O.M. Tools A JumpStart Inclusion Advisors and JumpStart TechLift Advisors client 2009: Starts commercial test with Fortune 500 beta customer JOHN COLLIER is ready to revolutionize the metal fabrication 2009: Completes beta test with successful results industry. After perfecting and patenting the design of its punch 2008: Works with JumpStart to secure tool, M.O.M. Tools is taking on the $30 billion worldwide market. beta customer Prior to 2008: John patents idea The design of John’s dual head punch tool incorporates an for tool and founds M.O.M. Tools angular groove that acts as a second punch head, resulting in less breakage of the metal (maintaining the integrity of I IN D ME G&S the entire metal piece) and a cleaner hole than today’s punch tools, all at a lower cost. As he began his search for a beta customer in January 2009, John connected with JumpStart an extensive beta test and in early 2009 connected with and Inclusion Advisors for guidance in forming secured a Fortune 500 industry leader as its first beta customer. the company’s assessment guidelines. Out John also looked to JumpStart TechLift Advisors for metals of that partnership, M.O.M. Tools developed expertise while developing the test site. “We were able to land our beta customer in large part because of our partnership with JumpStart TechLift Advisors. They are well connected in the technology field INNOVATOR and got us in touch with the right people.” Completed in the summer of 2009, the beta test’s results provided John with a Six Sigma validation of the tool’s ability to provide manufacturers with higher productivity at a lower cost. M.O.M. Tools, along with Entrepreneurs-in-Residence at JumpStart Inclusion Advisors and JumpStart TechLift Advisors, is now developing a strategic plan to roll out its dual head punch throughout its customer’s entire plant with an extended plan to PhOTO CREDIT Lauren Parsells introduce it to the company’s sister plants around the world. With a first customer and continued sales he expects based on the validated beta test, John projects the company’s revenue to exceed $1 million by the second year of implementation. 8 R E A L I Z I N G O U R F U T U R E : S T O R I E S O F I C O N S , I N N O V AT O R S & I M P A C T
  • INNOVATOR Doug Hardman | SparkBase A JumpStart TechLift Advisors client “JumpStart’s team helped DOUG HARDMAN had a vision With the new funding, Doug made significant progress against fill a gap that for his software tool. Based on his key milestones, receiving an additional $500,000 in funding, allowed us to expertise and past experience in tripling the size of his team, and completing the 3.0 version of the software development, Doug believed grow much SparkBase software. This version incorporates an SMS Gift Card he had developed a network that more quickly. Portal that connects to more than two million card holders – introduced modern technology to Without the all of whom will be using the SparkBase network when they the gift and loyalty card processing help of my cash in their cards – and allows merchants to connect industry, which had been dominated Entrepreneur- with their customers instantly. SparkBase’s client base by antiquated systems and thinking. has also tripled in just six months and Doug recently in-Residence, What Doug lacked was the resources signed a $125,000 deal to develop a whole new I’d still be he needed to add additional features platform tailored to one customer. “JumpStart’s to the system and get the word thinking of my team helped fill a gap that allowed us to 2009: Increases out to the rest of the industry. vision instead grow much more quickly. Without customer base by 400% of making it the help of my Entrepreneur-in- Doug connected with JumpStart happen.” Residence, I’d still be thinking TechLift Advisors in January 2007 of my vision instead of 2009: Raises Series A and and began to finalize the company’s making it happen.” additional angel funding business plan and perfect his investor and completes presentation. With the technical assistance and connections 2007: Works with new product JumpStart to develop development PhOTO CREDIT Lauren Parsells provided by JumpStart TechLift Advisors, Doug secured a loan business plan and Prior to 2006: investor presentation from Cuyahoga County’s North Coast Opportunities Technology Doug begins development of 2008: Secures funding Fund (NCOF) in October 2008. This infusion of development SparkBase from Cuyahoga County’s NCOF capital paved the way for a Series A round by Blue Olive Partners 2006: Doug becomes CEO of to ensure proper staffing and marketing of SparkBase. SparkBase I IN D ME G&S J U M P S TA R T 2 0 0 9 C O M M U N I T Y R E P O R T 9
  • “Eight jobs might not seem like a lot, but that’s just the beginning. I am expecting to grow INNOVATOR our reseller channel significantly, which will require iGuiders to hire customer service personnel and marketing professionals to support our growth strategy.” Jodi Marchewitz | iGuiders A JumpStart TechLift Advisors client that became a JumpStart Ventures portfolio company JODI MARCHEWITz knows there is over a $25 billion In order to achieve these and future milestones, Jodi has market out there for her company. She identified the need developed a capital efficient hiring plan that meets the to create easier and more productive Internet searches in company’s growth and investment needs. So far, Jodi has early 2007 and had the skills to develop a new technology created eight positions within the company. Aside from herself, solution based on expertise gleaned from senior roles at iGuiders now employs two web developers, a marketing director, Rockwell Automation. Now Jodi is leading iGuiders into a and a marketing associate, as well as a contract sales director, new market and hoping to align her company with search a part-time web developer, and a part-time chief technology engine powerhouses like Google, Yahoo!, and Microsoft. officer. “Eight jobs might not seem like a lot, but that’s just the beginning. I am expecting to grow our reseller channel The iGuiders team consisted of Jodi and one contractor when significantly, which will require iGuiders to hire customer she began developing the prototype and looking for technical service personnel and marketing professionals to support and investment. iGuiders’ patent-pending online support our growth strategy. I also expect to add decision technology, called Guiders, helps Internet users quickly additional developers to create advances in our identify what they want, leads them to the exact information search and decision technology and lead- they need, and guides them to make decisions faster. Upon generation platform.” Jodi’s expanded receiving funding from the Civic Innovation Lab and Flashline team is anticipating dramatic revenue Partners, Jodi looked to JumpStart TechLift Advisors in generation in the next August 2008 to build a strategy that would lead to funding to few years. continue product development. After helping to finalize her investor presentation and assisting with market validation, 2009: Secures funding and Jodi’s TechLift Advisors Entrepreneur-in-Residence brought guidance from JumpStart PhOTO CREDIT Lauren Parsells iGuiders to JumpStart Ventures. Jodi moved her company 2009: Launches Guiders platform into the Beachwood Business Development Center just prior to 2009: 8 employees 2007: Jodi identifies need for receiving a JumpStart Ventures investment in February 2009. iGuiders With ongoing coaching from a JumpStart Venture Partner, 2007: Raises friends and family capital Jodi refined her operating strategies, initiated beta testing, and launched her lead-generation platform in June 2009. I IN D ME G&S 10 R E A L I Z I N G O U R F U T U R E : S T O R I E S O F I C O N S , I N N O V AT O R S & I M P A C T
  • INNOVATOR Mark Woodka | BSKLive A JumpStart TechLift Advisors client that became a JumpStart Ventures portfolio company MARK WOODKA has a successful entrepreneurial past. funding, Mark completed development of the software and His first software startup became the sales arm for TMW began to expand his sales and marketing efforts. He knew the Systems, a software company he helped grow from $1 company needed additional funding to penetrate the initial million to $20 million in revenue. From there Mark became target market of healthcare, so Mark began working with his Vice President of Sales at Flashline, an early-stage software JumpStart Venture Partner to increase the company’s visibility company that was eventually sold to BEA Systems. Now among angel and venture capital investors and effectively Mark is Chief Executive Officer of BSKLive, another software articulate the product’s strength and market potential. startup reaping the benefits of his successful past. By the end of fall 2009, BSKLive expects to attract another BSKLive’s flagship product, “The process of equity investor in the range of $1 to $1.3 million. The StaffKnex, is a web-based going through company continues to secure new customers in the application that manages JumpStart is very healthcare market, with each customer’s cost savings employee scheduling and averaging $50,000 to $100,000 per year. This similar to the staffing for companies with is expected to set the company on a course to fundraising process, shift-based workforces. After capture a substantial portion of all companies presenting at JumpStart which I’ve gone employing shift-based workers, including TechLift Advisor’s First Pitch, through before. those beyond healthcare. This market 2009: Expands Mark secured a JumpStart It’s tremendously represents 40 percent of the U.S. implementations and proves sales Ventures investment in helpful for workforce, which the team repeatability January 2009 alongside an entrepreneurs calculates to be valued angel investment from North at over $2 billion. 2009: Secures because it prepares beta clients and Coast Angel Fund. “The prepares to scale them for the sales process of going through JumpStart is very similar follow-on rounds of 2008: Mark becomes 2009: Beta clients validate funding that most CEO of BSKLive PhOTO CREDIT Lauren Parsells value proposition to the fundraising process, Prior to 2008: 2009: Secures funding which I’ve gone through businesses will need Mark sees and guidance from potential in JumpStart before. It’s tremendously in order to grow.” BSKLive’s product 2009: Completes next helpful for entrepreneurs stage of software development because it prepares them for the follow-on rounds of funding that most businesses will need in order to grow.” With the I IN D ME G&S J U M P S TA R T 2 0 0 9 C O M M U N I T Y R E P O R T 11
  • JUMPSTART’S IMPACT JumpStart’s work since 2004 has created impact not just with the entrepreneurs and their companies, but within the Northeast Ohio economy as well. Our impact includes reaching entrepreneurs and investing in companies, Impact | On Company Growth helping our clients identify and secure external Inception through June 30, 2009 funds for growth, and creating jobs and ripple- type impact in the region. JumpStart Ventures Investing $14.37 million through 51 investments in 39 companies, of which 12 are woman or minority-owned or led Impact | On Entrepreneurs Inception through June 30, 2009 Creating the connections for Reaching portfolio companies to raise an additional 30,140 $74.2 members of the entrepreneurial community (6,030 of whom are diverse) million in external funding (excluding to introduce the services of JumpStart JumpStart funding) – a 5:1 leverage ratio of JumpStart’s investment Reviewing 6,620 business overviews from entrepreneurs JumpStart Inclusion Advisors Advising 25 client companies, (1,125 from diverse entrepreneurs) of which some are JumpStart Ventures portfolio companies and have raised Providing over $23.3 million 67,650 in external funding hours of free assistance to entrepreneurs JumpStart TechLift Advisors Connecting Advising 3,500 entrepreneurs with investors, business 370 client companies, which have raised $19.1 million mentors and service providers through IdeaCrossing, the online resource in external funding 12 R E A L I Z I N G O U R F U T U R E : S T O R I E S O F I C O N S , I N N O V AT O R S & I M P A C T
  • porTFolio AnD CliEnT Impact | On Northeast Ohio’s CompAnY hiGhliGhTS Economy The portfolio and client companies with which JumpStart works Economic impact over the past have had tremendous accomplishments. three years totaling (Inception through 6/30/09) $175 million, Here are some highlights: Recognized in the Top 10 in their fields including $76 million in Northeast Ohio in 2008, • Embrace Pet Insurance as reported by Cleveland State University – a 29 No. 2 pet insurance company according percent increase from JumpStart’s 2007 impact of to PetInsuranceReview.com $59 million • InSeT Systems Top 10 technology of 2008 by Popular Science • STACK Media JumpStart’s 2008 impact included Top 10 most visited sports website in the country $8.3 million according to comScore Media Metrix • Synapse Biomedical in taxes generated – almost equal to JumpStart’s Top 10 medical innovation for 2009 by the Cleveland Clinic annual budget, including funds for direct recognized as leaders in their industries investments • Great Lakes Pharmaceuticals “One of the more exciting technologies we have seen” $20.9 million according to the National Institutes of Health • PreEmptive Solutions in household income generated in 2008 “A company to watch” according to one of the leading consultants in their field 502 • Tremont Electric One of “America’s Most Promising Startups” according to BusinessWeek jobs created (direct and indirect) recognized by national media • CardioInsight Technologies graced the cover of Heart Rhythm magazine • CardioInsight Technologies, CerviLenz, and Synapse Biomedical highlighted in The New York Times Impact | Recognized • Embrace Pet Insurance and PreEmptive Solutions featured in Entrepreneur magazine JumpStart was the national recipient of the • iCubed International’s microwave 2009 Excellence in Urban or Suburban featured on ABC’s The View Economic Development Award • InSeT Systems featured in Inc. magazine from the Economic Development Administration • MAR Systems featured in Black Enterprise magazine • PreEmptive Solutions noted in USA Today JumpStart is the 15th most active early-stage investor • reXorce Thermionics featured in The Wall Street Journal nationally according to Entrepreneur magazine and • Synapse Biomedical featured on Forbes.com has been featured in The Wall Street Journal, • Wireless Environment highlighted in VentureBeat The new York Times, USA Today, and The Chronicle of philanthropy, Secured 94 patents with another 87 in process (JumpStart ventures portfolio companies alone) with over 1,000 cumulative media placements Secured partnerships with global leaders — microsoft, Sears, FedEx, novelis, marriott, IdeaCrossing was recognized with the and lloyd’s of london, among others Dominion Foundation hired 269 employees (JumpStart Community impact Award and the ventures portfolio companies alone) oberlin research Group Award for Best Single Innovation raised $134 million in external funding (not including JumpStart ventures investments) J U M P S TA R T 2 0 0 9 C O M M U N I T Y R E P O R T 13
  • RECOGNIZING OUR DONORS JumpStart is only able to accelerate the vision of the region’s entrepreneurs and the growth of their companies because of the generous support of our philanthropic partners. It is because of their commitment to our region’s current and future entrepreneurial economy that we are collectively on the path to realizing a more prosperous future for Northeast Ohioans. Leadership Donors JumpStart especially recognizes the leadership and support of Ohio Third Frontier, a program of the State of Ohio. Ohio Third Frontier, which catalyzes the innovation that is transforming Ohio’s economy, has dramatically improved the entrepreneurial ecosystem across Ohio. JumpStart’s accomplishments manifest the vision of the leaders of this program. The Burton D. morgan Foundation The FirstEnergy Foundation vitality of 26 U.S. communities where the The mission of the Burton D. Morgan Knight brothers owned newspapers. Foundation is to strengthen the free Forest City Enterprises enterprise system by investing in Charitable Foundation, inc. The national City Corporation organizations and institutions that foster Charitable Foundation, the entrepreneurial spirit. The Fund for our now pnC Foundation Economic Future The PNC Foundation actively supports The Cleveland Foundation The Fund for Our Economic Future organizations that provide services for the The Cleveland Foundation improves unites philanthropy in Northeast Ohio benefit of the community, especially those the lives of Greater Clevelanders now to strengthen the region’s economic services that assist in the development of and for generations to come by building competitiveness through grant making, preschool children for success in school community endowment, addressing needs research and civic engagement. and life. The PNC Foundation receives its through grant making, and providing principal funding from The PNC Financial leadership on vital issues. Greater Cleveland Services Group (NYSE: PNC). partnership CoSE As an association of business members, the The Donald and Alice noble COSE is Northeast Ohio’s largest small Greater Cleveland Partnership mobilizes Foundation business support organization and private-sector leadership, expertise, and provides cost-effective group purchasing resources to create jobs and leverage ohio Third Frontier programs, advocacy on legislative and investment to improve the economic Ohio Third Frontier catalyzes innovation regulatory issues, and networking vitality of the region. that is transforming Ohio’s economy and educational resource to help the for future generations by creating region’s small businesses maintain their KeyBank Foundation new technology-based products, independence and grow. The objective of the KeyBank Foundation companies, industries, and jobs. It has is to improve the quality of life and four major pillars: to bring industry The Economic Development economic vibrancy of the places where our and academia together to accelerate the Administration, a division of the customers, employees, and shareholders development of new innovations and u.S. Department of Commerce live and work. breakthrough technologies, to create The Economic Development new opportunities for Ohioans, to build Administration’s mission is to lead The John S. and sustainable and competitive industries, the federal economic development James l. Knight and to build new businesses and invest in agenda by promoting innovation and Foundation entrepreneurialism. competitiveness, preparing American The John S. and James L. Knight regions for growth and success in the Foundation promotes excellence in worldwide economy. journalism worldwide and invests in the 14 R E A L I Z I N G O U R F U T U R E : S T O R I E S O F I C O N S , I N N O V AT O R S & I M P A C T
  • SOURCES & USES TO DATE July 1, 2004 Through June 30, 2009 All figures are in millions SourCES oF FunDS – invESTmEnTS 6% Donor Community 30% l State of Ohio JumpStart’s unique public-private partnership reflects 64% l Foundations l Corporations the commitment to the growth of entrepreneurship in this region shared by the Northeast Ohio civic, business, and foundation communities with the State of Ohio and the Economic Development Administration. State of Ohio $9.2 64% Thank you to all the members of our unique donor Foundations $4.3 30% community who make the work of JumpStart happen. Corporations $0.9 6% $14.4 100% Civic, Business, and individual Donors Baker Hostetler SourCES oF FunDS – opErATionS Calfee, Halter and Griswold 5% Dix & Eaton 31% l State of Ohio Dollar Bank 20% l Federal Government Ernst & Young l Foundations Fifth Third Bank l Corporations 38% 6% l Individual & Prog. Fees Huntington National Bank Jones Day 100% of JumpStart’s Associates State of Ohio $6.6 31% 100% of JumpStart’s Board of Directors Federal Government $1.3 6% The David and Lindsay Morgenthaler Foundation Foundations $8.0 38% Oberlin Research Group Corporations $4.3 20% Squire, Sanders & Dempsey Individuals & STERIS Corporation Program Fees $1.0 5% The William & Pamela Summers Family $21.2 100% Thompson Hine uSES oF FunDS Foundation Donors The Charter One Foundation 10% The Kathryn and Lee Chilcote Foundation 12% l Investments The George W. Codrington Foundation 40% l Ventures/TechLift/Inclusion l Marketing/IdeaCrossing The Dominion Foundation l General Admin/Fundraising 37% The Eaton Charitable Fund The GAR Foundation The Ewing Marion Kauffman Foundation Investments $14.4 41% The Fred A. Lennon Charitable Trust Ventures/ The Lincoln Electric Foundation TechLift/Inclusion $13.2 37% The Nord Family Foundation Marketing/ IdeaCrossing $4.3 12% The Parker Hannifin Foundation General Admin/ The Raymond John Wean Foundation Fundraising $3.7 10% $35.6 100% J U M P S TA R T 2 0 0 9 C O M M U N I T Y R E P O R T 15
  • REALIZING OUR FUTURE In this report, we reflect on the historical accomplishments of a few of our region’s entrepreneurial icons to give context to the progress of our current entrepreneurs and the role of JumpStart in helping them Special thanks to Dr. Ziona Austrian, Director, Center for Economic Development at the Maxine Goodman Levin College of Urban Affairs of Cleveland State University for providing the regional data. along that path. We provide the same critical resources past innovators leveraged to build their successful companies. If history is an indicator of the future, we can have faith that some of these talented individuals, with the support of JumpStart, will be able to achieve the ultimate goal of generating significant wealth and creating thousands of new jobs across Northeast Ohio. From 1997 to 2007, the 21-county region JumpStart serves lost over 50,000 jobs (-1.7 percent)1 while the rest of the U.S. experienced, on average, an 11.2 percent job growth. To create new jobs to replace these 50,000 lost positions and transform our region’s economy in a time of globalization is going to require tremendous focus and accelerated progress. JumpStart and our supporters believe that accelerating innovative, entrepreneurial companies from our community is one of the most important actions we can take to address this challenge. How long will the process of transformation take? There are We can learn from cities within our own region that have experienced Economy.com, 1997-2007; 2Economy.com reported by Ledebur and Taylor, “Akron, Ohio: a Restoring Prosperity Case similar transformation, such as Akron. Akron’s economy faltered entrepreneurial dramatically in the late 1970s and early 1980s with the decline in icons in the the rubber industry; more than 10,000 manufacturing jobs were making here lost in that time2 and declines continued for the next 15 years. The whose innovative city, under the inspired and determined leadership of Mayor Don Study”; Metropolitan Policy Program at the Brookings Institution; 3Economy.com, 1997-2007 Plusquellic, responded consistently with a variety of economic development initiatives, including ideas and establishing an incubator to promote entrepreneurship and investing in an Israeli incubator to bring high growth startups to the area. The universities and local companies also consistently increased investment in companies will polymer chemical R&D activities. As a result, while still lagging national performance, Akron’s job create thousands growth has been, on average, double the rate of the rest of the region. From 1997 to 2007, Akron experienced job growth of 6.1 percent3 (almost 20,000 jobs), compared to the losses experienced in of jobs and the entire region. Per capita income growth is also the highest in the region. While Akron’s journey lead to regional isn’t over, it shows us that support for entrepreneurship and innovation can change a region. prosperity. With JumpStart playing a leadership role, we have finished the first chapter of a new story about a revitalized regional entrepreneurial economy in Northeast Ohio. We are confident that the rest of the story will be about our collective success. There are entrepreneurial icons in the making here whose innovative PhOTO CREDIT Lauren Parsells ideas and high growth companies will create thousands of jobs and lead to prosperity enjoyed by not just Northeast Ohio, but the nation. We remain committed to our mission of providing these entrepreneurs with the resources they will need to accelerate their journey. Thank you for your commitment to our region’s entrepreneurial economy and its entrepreneurs. 1 16 R E A L I Z I N G O U R F U T U R E : S T O R I E S O F I C O N S , I N N O V AT O R S & I M P A C T
  • ThESE ARE SOME OF ThE COMPANIES WhOSE INNOVATORS ARE WORkING TO REALIZE OUR FUTURE COUPAD® COUPAD®
  • Board of Directors Mr. Doug Weintraub, CPA Board Chairperson, JumpStart Inc. Serial Entrepreneur Mr. Mark Williams Vice Chairperson, JumpStart Inc. Executive Vice President, Corporate and Institutional Bank, PNC Ms. Jacqueline Acho, Ph.D. President, The Acho Group Ms. Barbara Brown Principal, BrownFlynn Ms. Terri Hamilton Brown Opportunity Corridor Project Director, Greater Cleveland Partnership Ms. Judith Cone Special Assistant to the Chancellor for Innovation and Entrepreneurship, University of North Carolina at Chapel Hill Mr. Mark Coticchia Vice President for Research and Technology Management, Case Western Reserve University Mr. Larry Goddard President, The Parkland Group, Inc. Ms. Bonnie W. Gwin Managing Partner, Heidrick & Struggles Mr. Peter D. Hancock Vice Chair, KeyCorp Mr. John W. Harley Co-Founder and Co-President, FirstPower Group LLC Mr. Jim Hickey President and Founder, Arras Group Dr. Jagdish D. Kulkarni, M.D. President and CEO, J&J Enterprise Mr. Ray Leach CEO, JumpStart Inc. Mr. Rich Lunak President and CEO, Innovation Works Mr. David M. Powell Vice President, Environmental Affairs and Government Relations, NetJets Inc. Mr. Chris Schmid Founder and Partner, LuK, Inc. and Tekfor Inc. Mr. R. Louis Schneeberger Former Partner and Managing Director, Knowledge Investment Partners Mr. William R. Seelbach Operating Executive, The Riverside Company Mr. Ken Semelsberger Senior Vice President–Finance and Planning, Eaton Corporation Dr. Anthony Stallion, M.D., FACS, FAAP Staff Surgeon, Cleveland Clinic Children’s Hospital Mr. Steve Walling Design: Boondock Walker Chairman and CEO, Plasticolors, Inc. Mr. David Wilhelm Founder and Partner, Adena Ventures JumpStart Inc. | 737 Bolivar Road, Suite 3000 | Cleveland, OH 44115 Voice: 216.363.3400 | Fax: 216.363.3401