2008 Venture Capital Report


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Download the 2008 Venture Capital Report for the Cleveland Plus region to learn details of the 73 companies that recieved $259 million in capital last year.

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2008 Venture Capital Report

  1. 1. the 2008 venture capital report the annual survey of venture investing activity across the cleveland plus™ region of ohio
  2. 2. In 2008, more companies in the Cleveland Plus region received investment than in VENTURE CapiTal aDViSORY TaSk fORCE any of the past four years. In a year that will be remembered for the national financial and Dorothy Baunach, NorTech economic slowdown, this positive trend demonstrates that the Cleveland Plus region continues Tim Biro, Ohio Innovation Fund its purposefully conceived role as a nationally significant center for innovation and growth. While Greg Blonder, Morgenthaler Ventures Becca Braun, JumpStart Inc. nationally there was a four percent decline in the number of investments in 2008, the Cleveland Melford Carter, Ohio-Midwest Fund Plus region actually experienced a five percent increase. It is this steady activity that leads us to Chris Coburn, Cleveland Clinic Foundation believe that our regional goal of ensuring that $1.2 billion of venture capital is raised by Cleveland Paul Cohn, Fort Washington Capital Plus area companies over five years (beginning in 2007) will be met. Completing the second year Partners Mark Coticchia, Case Western of this ambitious goal, companies have raised $577 million, or 48% of that five year goal. Reserve University Lorelei Davis, Frantz Medical Other highlights of this report include: Ventures Michael Goldberg, Bridge Investment • 73 companies received $259 million in investment capital. The dollar amount is a decline Fund, LP from 2007, largely because of a few significant non-recurring later and growth stage William Grimberg, Consumer Innovation Partners investments. Jack Harley, JWH Group, Inc. Steve Haynes, Glengary Ventures LLC • 60 percent of the capital raised in 2008 was in the Healthcare sector, demonstrating this Joe Hudson, OneEarth Capital region’s status as a national center for healthcare innovation and entrepreneurship. James Ireland III, Early Stage Partners, LP • With 27 Healthcare venture firms now located in Ohio, the state is one of the top five states in Don Knechtges, GLIDE/Lorain County Community College Fund the nation in terms of Healthcare venture firms having offices established within its bounds. Ray Leach, JumpStart Inc. Floyd D. Loop, M.D., Radius Ventures • Cleantech, which consists of the Energy, Advanced Materials, and Environmental sectors, Chris Mather, TechLift/North Coast more than doubled the investment dollars from 2007 to 2008, leveraging the region’s Opportunities Technology Fund Kevin McGinty, Peppertree Capital strengths in materials-based sciences and manufacturing. Management, Inc. Joe Michael, Fort Washington Capital • Seed and early stage investment dollars increased by ten percent, demonstrating a steady Partners pipeline of innovation and continuing development of the venture capital continuum. Bill Mulligan, Primus Capital Funds Don Murfin, DCC Growth Fund • 14 firms from outside the region made their first investment here in 2008. Jonathan Murray, Early Stage Partners, LP Along with these achievements, this report highlights the progress and celebrates the successes Clay Rankin, North Coast Angel Fund Barry Rosenbaum, Akron of companies and investors in the region in 2008. These stories demonstrate the great opportunity ARCHAngels the Cleveland Plus region offers to investors at all stages of the venture capital continuum. Scott Roulston, Fairport Asset Management, LLC What kind of progress should we expect for 2009? While we remain concerned about the Charlie Schliebs, iNetworks Bill Seelbach, The Riverside significant national slowdown of the IPO market, and the overall near- and mid-term economic Company outlook, where crisis lies, opportunity abounds. Entrepreneurs and investors specialize in taking Baiju Shah, BioEnterprise Corporation advantage of opportunities (such as the strong market for strategic aquisitions of entrepreneurial Chris Sklarin, Chrysalis Ventures companies), and the Cleveland Plus region is no exception, offering continuing opportunities for Jon Snyder, Arboretum Ventures Karen Spilizewski, RiverVest Ventures successful innovation and growth. Bill Stuart, Portal Capital Mike Stubler, Draper Triangle Ventures Bill Trainor, Mutual Capital Partners Dorothy Baunach James Ireland III Eric Von Hendrix, MWV Pinnacle President and Managing Director, Capital Fund, LP Chief Executive Officer, Early Stage Partners, LP NorTech Chair, NorTech Venture Capital Brad Whitehead, Fund for Our Economic Future Advisory Task Force Bob Williams, Roulston Ventures Neil Wyant, Everett Partners, LTD. Wayne Zeman, MAGNET Ray Leach Baiju Shah Chief Executive Officer, President, JumpStart Inc. BioEnterprise
  3. 3. More Northeast Ohio companies received investment in 2008 than in any of the past four years. Cleveland Area Venture Investments $ Millions Companies Financed 124 260 157 318 259 42 56 51 71 73 2004 2005 2006 2007 2008 2004 2005 2006 2007 2008 Source: Dow Jones VentureWire; Venture Source; Private Raise, LLC; BioEnterprise; JumpStart Inc.; Ohio Department of Development; TITC Investments by Stage (2004-2008) Building Pipeline Number of Companies by Stage of Financing 15 14 SEED EARLy GROWTH 1 8 8 27 29 GROWTH 84 438 600 22 16 $ MilliONS EARLy 19 # Of DEalS 164 122 47 0.51 3.59 12.77 26 27 29 33 aVg. DEal SizE SEED 22 2004 2005 2006 2007 2008 Investments by Sector Healthcare Services, Medical Agriculture Information Systems, & Other Biopharmaceuticals Business & Healthcare Services, Consumer Products Medical Information Systems, & Other Agriculture & Services Biopharmaceuticals NUMBER OF EqUITy INVESTMENTS Business INVESTMENTS By By SECTOR & Consumer Medical Information Products & SECTOR [2004-2008] Devices & Technology [$ Millions 2004-2008] Services Equipment Medical Devices & Equipment Information Advanced Technology Specialty Energy Materials & Chemicals Environmental Energy Environmental Advanced Specialty Materials & Chemicals Healthcare Healthcare n 33 Healthcare Services, Cleantech n 68 information n $249 Healthcare Services, Cleantech n $148 information Medical information n 38 advanced Technology Medical information n $48 advanced Technology Systems, & Other Specialty Materials Systems, & Other Specialty Materials n $147 Business & n 55 Business & & Chemicals & Chemicals Consumer products & n 28 Biopharmaceuticals Consumer products & n $228 Biopharmaceuticals n 17 Energy Services n $49 Energy Services n 81 Medical Devices & n $247 Medical Devices & Equipment n 5 Environmental n 1 agriculture Equipment n $3 Environmental n $.32 agriculture
  4. 4. Incentives for Investors X G The Ohio Capital Fund, supported by the State of Ohio, has committed over $98 million to 18 Opportunity Taken venture funds to date. Eight funds managing over $600 million have taken advantage of Funds under management Ohio Capital fund incentives to establish a new of firms taking advantage presence in Ohio. of Ohio Capital Fund G The Ohio Midwest Fund, comprised of $102 incentives to establish million from OPERS and Credit Suisse, has now a new Ohio presence committed $72 million to 12 funds. G The third and newest fund, the NEO Capital Fund, will commit capital to venture capital firms that have or establish a presence in Northeast Ohio. $255 $330 $624 G The Ohio Technology Investment Tax Credit program allows individual investors in qualified technology-based Ohio companies to reduce their X 2006 2007 Source: Ohio Capital Fund 2008 X taxes by 25–35 percent of the amount invested. Featured Deals Tursiop Technologies Ovation polymers partsSource Brulant Tursiop Technologies is Ovation Polymers, based in Medina, Founded in 2001, PartsSource is Brulant, a digital marketing commercializing a novel magnetic Ohio, is at the leading-edge of the nation’s only alternative parts firm, has been growing steadily resonance imaging (MRI) coil that polymer compound innovation. The aggregator for hospital equipment since it was founded in 1989. will greatly increase MRI resolution, company’s breakthrough polymer parts. The company supports Brulant allowing clinicians to capture products are used in electronics, over 2,500 different makes and provides more detailed images or use less optical technologies, medical models of hospital equipment and marketing expensive or smaller MRI machines devices, energy production products has automated the process for programs EXIT X for the same results. Led by CEO such as batteries and fuel cells, ordering them through an online for its Brad Goldstein, who brings 20 years and products for the wind and interface, saving its customers clients experience in commercializing solar industries. By creating significant time and that—beyond advanced technologies, the alliances with their clients money. With a people- being user friendly and company raised its $1.4 million seed and selecting forward- oriented, continuous technologically savvy—are round for continued research and thinking polymer GROWTH X improvement culture differentiated by their development from local investors, industry partners, the forged by serial stringent focus on being RMS Management and JumpStart company has continued entrepreneur, CEO insight-driven and focused Inc. Soon after, Goldstein and his to grow since Ray Dalton, the company on business results. In 2008, team received FDA certification it was founded shows a commitment to Brulant was acquired by on their initial design and are in 2004 by 30-year growth at all levels. A winner of Rosetta out of Princeton, New currently continuing down the plastic veteran, numerous awards for growth, Jersey, with the resulting path to commercialization. EARLy X Asis Banerjie. customer service, training and company enjoying status as Banerjie and his its commitment to humanitarian the largest and most profitable team have raised efforts, PartsSource is a true independent interactive over $9 million in success story. In 2008, PartsSource agency in the country, with financing to-date from Early Stage raised a $50 million investment 30% growth in 2008. SEED X Partners of Cleveland, Ohio and led by Polaris Venture Partners other investors, including a Series of Boston and joined by Primus B round this year. Capital Funds of Cleveland.
  5. 5. National Investment EXTERNAL EqUITy INVESTORS IN CLEVELAND PLUS AREA COMPANIES [2004-2008] MiDwEST (OUTSiDE NEO) OUTSiDE U.S. Advantage Capital Partners *08 Aberne Limited *08 Apex Ventures BOSTON Beecken Petty Ampersand Ventures Fletcher Spaght BioOhio Ventures *08 Boston Scientific Corp. Blue Chip Venture Company M/C Venture Partners *08 CID Equity Capital Resource Partners Norwich Ventures Entrepreneurs Fund Eastward Capital Polaris Ventures Hopen Therapeutics *08 Fidelity BioSciences *08 RA Capital Management Hopewell Ventures Medtronic NCT Private Equity Fund NEw YORk/EaST COaST Orix Capital Aisling Capital *08 Midsummer Capital OTAF Amphion Innovations *08 MPM BioEquities Southwest Michigan First Life Behrman Capital mTerra Ventures LLC Science Fund *08 Brown Brothers New Enterprise Talisman Capital Harriman & Co. Associates Thomas McNerney Partners CMG Capital Oak Investment Partners Triathlon Medical Ventures SOUTH Columbia Capital OrbiMed Advisors Accipiter Capital Management LLC Cowen Healthcare Psilos Group wEST COaST Domain Associates Radius Ventures Cordova Ventures Angiotech Advance Panorama Capital ExOxEmis GMG Capital RLS Investments *08 Chevron Technology Ventures Parker Price Venture Capital MB Ventures Greycroft Partners StarVest Partners Compass Group Roberts Communications Network Pappas Ventures Halyard Capital Sunrise Equity DW Healthcare Partners Sierra Ventures River Associates Investor Growth Capital Toucan Capital Corp. *08 Hambrecht & quist SV Life Sciences Symark Johnson & Johnson Welsh Carson Intel Capital *08 Vivo Ventures Texas Pacific Life Sciences Capital *08 Kearny Venture Partners *08 Western Technology LSKW Investments Morgenthaler Ventures Palo Alto Investors *08= FIRST INVESTMENT IN NORTHEAST OHIO IN ‘08 Ohio Venture, Angel, Seed & Pre-Seed Funds iNVESTMENT CapiTal fUNDS Isabella Capital Second Generation Ltd. SEED & pRE-SEED Adena Ventures Key Principal Partners SunBridge Partners iNVESTMENT fUNDS Arboretum Ventures *08 Luxemburg Capital Talisman Capital Blue Chip Validation Fund Athenian Venture Partners Max-Ventures Triathlon Medical Venture Partners Case Technology Ventures Blue Chip Venture Company Morgenthaler Ventures Walnut Capital Partners Cincinnati Children’s Tomorrow Fund Bridge Investment Fund Mutual Capital Partners Xgen LTD Cincytechusa Charter Life Sciences MWV Pinnacle Capital Fund Zapis Capital Group LLC Cleveland Clinic Innovations Chrysalis Ventures Nationwide Mutual Capital aNgEl NETwORkS & fUNDS Flashline Partners LP *08 CID Capital NCIC Capital Fund Akron ARCHAngel Network Glengary Ventures Consumer Innovation Partners NCT Ventures C-Cap JumpStart Inc. Crystal Ventures Oakwood Medical Investors Clarion Capital Lorain County Community College Development Capital Ohio Innovation Fund Innovation Fund CoreNetwork Draper Triangle Ventures Peppertree Capital Management Miami Valley Venture Fund Custer Capital Early Stage Partners Primus Capital Funds Rocket Ventures Findaway Ventures Everett Partners Radius Ventures Southern Ohio Creates Companies Growth Strategies Group Fletcher Spaght Ventures Reservoir Venture Partners TechColumbus North Coast Angel Fund Frantz Medical Ventures River Cities Capital Funds Ohio TechAngel Fund Hercules Technology Growth Capital Riverside Capital Microcap Fund queen City Angels iNetworks RiverVest Ventures RMS Capital Roulston Ventures Sycamore Partners *08= NEW OFFICE IN OHIO IN ‘08
  6. 6. Companies That Have Raised Capital [2004-2008] iNfORMaTiON Think-a-Move, Ltd. Turning Technologies Interscopic Analysis Cleantech TECHNOlOgY TOA Technologies Victory Solutions Interventional Imaging ARDC aDVaNCED SpECialTY Unitask Visual Edge Technology Lifeline Screening AVE Intervision MaTERialS & CHEMiCalS Vox Mobile m2m Imaging Corp. Axentis HEalTHCaRE 6062 Holdings Workflow.com MDG Medical Ayalogic AcelleRX Therapeutics Inc. AMTI yeboTV MemberHealth Banyan Technology American Safety & Health Aria Analytics Institute Merlot OrthopediX BlueBridge Networks BUSiNESS & CONSUMER Blue Spark Technologies AnalizaDx NDI Medical BSK Live pRODUCTS & SERViCES Carbolytic Materials Accessmount Aris Teleradiology Systems NeoMed Clear Image Technology Helios Coatings Aerodynamic Trailer Arteriocyte NextMed Systems ComSense Technology, Inc. MemPro Ceramics Amish Naturals Athersys Ogenix Corporation CutterCroix LLC Technology Management AxioMed Spine OrthoHelix MesoCoat, Inc. DimpleDough Surgical Designs BDC Management Group CardioInsight Technologies MIMFlow Technologies DIy Real Estate Solutions LLC PartsSource LLC Cell Targeting Inc. Nanomimetics Embedded Planet Cleveland Unlimited, Inc. PeriTec BioSystems Cervilenz Ovation Polymers Employ Media Cohesant PrognostiX ChanTest RSP Tooling Everstream Collaborent ProPractica Clear Catheter Systems Stanton Advanced Flashline CoupAd Ricerca Ceramics Cleveland BioLabs FLX Micro DMI Manufacturing, Inc. Roscoe Medical Stratum Energy Systems CleveX Myriad Health Embrace Pet Insurance Simbionix Trivium Technologies Cone Instruments I2C Technologies Fire-Dex Inc. SpineMatrix Copernicus Therapeutics InSet Systems Symphony Medical ENERgY Gauntlet Technology CornerStone Medical Systems Arisdyne Systems Inspherion Synapse Biomedical Critisense Contained Energy Inspiron Hartville Group Syncro Medical CSF Therapeutics Energy Focus IqS HF Food Technologies Telerad Express Early Sense Five Star Technologies Knotice InnoDesk Thermedx Endotronix Greenfield LogiSync Insurance.com Tolera Therapeutics Franklin & Seidelmann Light Resonance Monarch Teaching Ladies Who Launch Subspeciality Radiology Transcutaneous Technologies Technologies Learning Horizons Inc. Technologies Freedom Meditech, Inc. Ocean Energy Systems NCRx Optical Nine Iron Innovations Trek Diagnostics Fused Multimodality reXorce Thermionics Inc. quickPayNet NineSigma Imaging Tursiop Technologies Wireless Environment Northcoast PCS PetsDx Ganeden Biotech Vascular Biogenics One Source Technologies Pfingsten Publishing Great Lakes Vasolux Microsystems ENViRONMENTal PC On Call Inc. Pharmaceuticals ViewRay MAR Systems Predictive Services PsiBase Icon Interventional WholeHealth Management MORK Process PsyMax Sagequest Imadent within3 Polyflow Stack Media SamePage Solutions Imalux Sorbent Technologies Teraphysics Improvita Health agRiCUlTURE Sypherlink Tooling University Products Delta Plant Telisys Inc. Treatment Online IntElect Private Investments in Public Equities (PIPES) were included in cases where it appeared that venture investors were involved. Special thanks to the Fund for Our Economic Future www.jumpstartinc.org www.nortech.org www.bioenterprise.com for underwriting this report. www.futurefundneo.org