2012 Greater Cleveland Venture Capital Report

2012 GREATER CLEVELAND

VENTURE CAPITAL REPORT

161 EQUIT Y INVESTORS IN NE OHIO COMPANIES 20 0 4-201 2

28 INVESTORS WERE NEW TO THE REGION IN 2012

NEW SCIENCE VENTURES

MIDWEST

Palo Alto Investors

ORIX USA Corporation

Oak Investment Partners

North Coast Angel Fund

Apex Venture Partners

Panorama Capital

Santé Ventures

OrbiMed Advisors LLC

Arboretum Ventures*

The Quercus Trust

ANCORA GROUP

NORTHEAST OHIO MEDICAL UNIVERSITY (NEOMED)

Big Game Capital

Ohio TechAngel Fund

Biomet

BIZDOM

Portal Capital LLC

BlueCrest Capital Finance LP

Roberts Communications Network

Blue Chip Venture Company

Parker Hannifin Corporation

BRANDERY

PHYSICIAN INVESTMENT GROUP LLC

OHIO 23Bell Innovations AKRON BIOINVESTMENTS FUNDS, LLC

Bridge Investment Fund* Case Technology Ventures CID Capital Clarion Direct Investment, LLC Cleveland Clinic Innovations CORENETWORK Directional Aviation Capital E CAPITAL PARTNERS

NDI Healthcare Fund

Primus Capital Funds* Queen City Angels* Reservoir Venture Partners* Resilience Capital Partners River Cities Capital Funds RiverVest® Venture Partners* RMS Investment Corporation

Early Stage Partners*

Rocket Ventures

East Central Ohio Tech Angel Fund

Rockwood Equity Partners Second Generation Ltd.

EDISON VENTURES*

Shaker LaunchHouse

Everett Partners Ltd.

SOLERA QI VENTURES

Evergreen Ventures Ltd.

Student Venture Fund at University of Akron

Evolution Capital Partners FRANTZ MEDICAL VENTURES Glengary LLC* Hatch Partners JumpStart Inc. Kadima Partners

SunBridge Partners* Supply Chain Equity Partners Sunrise Operations Thomas Roulston Investment Partners

PERMAL CAPITAL MANAGEMENT

NORTHEAST

Sutter Hill Ventures

4C Ventures

RLS Investments, Inc.

TAKEDA VENTURES, INC.

Aisling Capital

SV Life Sciences*

Ulupono Initiative

Ampersand Ventures

StarVest Partners

U.S. VENTURE PARTNERS

Amphion Innovations plc

SYCAMORE PARTNERS

Vivo Ventures

Boston Scientific Corporation

Lightbank LLC

WESTERN TECHNOLOGY INVESTMENT

BLUETREE ALLIED ANGELS

Thomas, McNerney & Partners

Medtronic

Wind Energy, Inc.

Rockwell Automation

Z2 Capital

Capital Midwest Fund Entrepreneur’s Fund LLC Hawthorn Group Hopen Therapeutics Hopewell Ventures

Southwest Michigan First Life Science Fund

WEST Cardinal Venture Capital Charter Life Sciences* Chevron Technology Ventures Draper Associates DW Healthcare Partners FLYWHEEL VENTURES FTV Capital

Cowen Healthcare Royalty Partners Draper Triangle Ventures*

Toucan Capital Corp.

Venzyme Venture Catalyst

DREAMIT VENTURES

INTERNATIONAL

EASTON CAPITAL

Aberne Limited

Abakan Inc.

Excel Venture Management

Bally Energy Ltd.

Advantage Capital Partners

Fidelity Biosciences

Anderson Growth Partners

Fletcher Spaght Ventures*

Castlerigg Master Investments

Austin Ventures

Foundation Medical Partners

Chrysalis Ventures*

Greatbatch

Cordova Ventures

Greycroft Partners

LIGHTNING PROTECTION INTERNATIONAL

Dresser-Rand

Harris & Harris Group

MA Solar

Energy Ventures

HealthCare Ventures LLC

MWV Financial Inc.

Exoxemis

POWER HEART CONSORTIUM

Frontier Capital

HORIZON TECHNOLOGY FINANCE

HERITAGE GROUP

Investor Growth Capital

Symark LLC VENTURE INVESTORS LLC

Capital Resource Partners

SOUTH

Triathlon Medical Ventures

Intel Capital

MILLSTREAM ANGEL CLUB

JDA Investments, LLC

Kentucky Science and Technology Corporation

Life Sciences Capital

Tri-State Growth Capital Fund II

Mutual Capital Partners

Kearny Venture Partners

WEST CAPITAL ADVISORS LLC

MATW Investments LLC

Midsummer Capital

NCT Ventures*

Microsoft Corporation

Zapis Capital Group LLC

Maverick Capital Funds

mTerra Ventures LLC

Morgenthaler Ventures

MB Venture Partners

New Enterprise Associates

Key Capital Corporation

Polaris Ventures

DSM Venturing DVx Inc.

Siemens Venture Capital

LSKW Investments LP

*Received Ohio Capital Fund Investment | ALL-CAPS: First-time investor in the region in 2012

108 TECH-BASED COMPANIES R AISED $212M 2012

FROM VENTURE CAPITALISTS & ANGEL INVESTORS AROUND THE WORLD In 2012, 108 Greater Cleveland companies raised $212 million from venture capitalists, corporate and angel investors, representing a 34% INCREASE over the capital attracted by companies in 2011. This growth in dollars bucked a national trend: Data released in The MoneyTree™ Report by PricewaterhouseCoopers and the National Venture Capital Association (based on data from Thomson Reuters) showed a decrease of 10% nationwide.

The Northeast Ohio region continues to demonstrate upward momentum. Compared to 2006, the amount invested by equity investors has INCREASED BY 43%, while the number of regional tech companies successfully attracting capital has increased by MORE THAN 120%.

212

$ 200

148

$

150

108 100

50

46

2006

2012

NUMBER OF COMPANIE S

2006

2012

DOLLARS INVESTED

NUMBER OF COMPANIES AT TRACTING CAPITAL & DOLLARS INVESTED (2006

VS. 2 01 2)

$212M EQUIT Y C APITAL INVES TED

BY STAGE IN 2012

SEED$16M

GROWTH $51M

EARLY $145M

"At Flywheel, we invest in world-class entrepreneurs solving big problems through innovation.

The eFuneral founders are clearly thought leaders, bringing first-of-its-kind innovation to the funeral planning and death care market, a sector previously lacking technology-enabled solutions. We are excited to be part of eFuneral and the Northeast Ohio startup ecosystem."

Kim Sanchez Rael, General Partner, Flywheel Ventures

LOCAL INNOVATION, GLOBAL REACH ECHOGEN POWER SYSTEMS (echogen.com) received an additional $12 million from Dresser-Rand, on the heels of a $10 million capital investment in 2011. This ongoing financial support has allowed the Akron-based company to continue improving its waste-heat recovery system. In fact, GE Marine recently selected Echogen as the exclusive provider of heat-to-power systems for its commercial and military marine vessels.

Managed mobility services provider VOX MOBILE (voxmobile.com) completed a $7.5 million Series A financing round led by New Jersey-based Edison Ventures and Edison’s limited partner, Permal Capital.

$212M EQUIT Y C APITAL INVES TED

BY SEC TOR & STAGE IN 2012 SEED$5.5M GROWTH$46M

As in previous years, healthcare is the strongest-performing sector in the region, with 37 companies raising a total of $143.5 million. The majority (43%) of this funding went to medical device companies, followed by healthcare services (38%) and biopharmaceuticals (19%).

EARLY $92M

HEALT

HCA

EARLY STAGE CAPITAL ATTRACTORS

RE $1

4

3.

5M

SEED$5M GROWTH $5M INFORMATI

EARLY $31M

ON

TE

C

HN

SEED$4M

OL

OGY

$41M

SPARKBASE (sparkbase.com), whose software powers loyalty- and rewards-based programs, raised a $5 million Series A round.

CLEA

EARLY $22M

SEED$1M

EARLY $.5M

NTE CH

6M

BUSINES

$2

JUVENTAS THERAPEUTICS (juventasinc.com) closed a $22.5 million Series B round co-led by Triathlon Medical Venture Partners and New Science Ventures.

Additional investors included Takeda Ventures, Fletcher Spaght Ventures and the Tri-State Growth Fund. This financing is being used to complete Phase 2 clinical trials of its regenerative medicine treatments for both chronic heart failure and critical limb ischemia.

S &

CO

NSU

MER $1.5

M

108 COMPANIES RECEIVED INVESTMENT

BY STAGE IN 2012

GROWTH14

EARLY25

SEED69

“Ohio—and Northeast Ohio in particular—offers a wealth of interesting venture-stage companies that have tremendous growth opportunities. We are fortunate to have raised a new fund to continue capitalizing on the investment opportunities within the region.”

Bill Trainor, Co-Founder and Managing Director of Mutual Capital Partners Funds I & II, Investments include Cleveland Heart Lab and OrthoHelix

UNIVERSITY-DEVELOPED TECHNOLOGIES LINESTREAM TECHNOLOGIES (linestream.com) closed $5 million in Series A financing led by Silicon Valley-based U.S. Venture Partners. LineStream’s software, which was developed at Cleveland State University, improves performance in order to make manufacturing equipment and other machines more energy-efficient and precise. In 2011, the company and Texas Instruments signed a licensing agreement, enabling the latter to sell LineStream’s technology to clients.

CARDIOINSIGHT (cardioinsight.com) raised a $7.5 million Series C round, which is helping accelerate the company’s clinical and commercial efforts related to its Case Western Reserve University-developed noninvasive 3D cardiac mapping system (e.g., an electrode-filled vest to help doctors pinpoint the exact location of an electrical abnormality in the heart).

108 COMPANIES RECEIVED INVESTMENT

BY SEC TOR & STAGE IN 2012 GROWTH2

Information technology—particularly enterprise IT—continues to be a strength for our region, with 47 companies attracting a total of $41 million over the past 12 months.

EARLY9 SEED36

INFOR

STRENGTH IN HEALTHCARE IT

MAT

ION

TE

CH

NO

LOG

Y 47

In Greater Cleveland, enterprise and healthcare IT have a growing influence on the regional economy.

ONSHIFT (onshift.com), which developed shift-scheduling software for the long-term care and senior living industries, raised a $3 million Series B round last year after experiencing a 400% increase in revenue and hiring its 50th employee.

GROWTH5

GENOMONCOLOGY (genomoncology.com), whose proprietary software and analytical tools can rapidly and interactively analyze and interpret sequenced genomic data, raised $2 million last year from a combination of angels and a JumpStart investment.

EARLY15

HEA

LTH

CA R

E

37

SEED17

EARLY7 EARLY1

SEED8 SEED8

NTE

NES

CH

BUSI

CLEA

&

S

15

CO

NSU

MER 9

6 COMPANIES E XITED IN 2012 THESE COMBINED DEALS WERE WORTH MORE THAN A QUARTER OF A BILLION DOLLARS

“With the acquisition by Tornier, our combined sales place us at No. 2 in the world, and just a few percentage points behind Johnson & Johnson.”

Dr. David Kay, CMO of OrthoHelix Surgical Designs

In August, ORTHOHELIX SURGICAL DESIGNS (orthohelix.com) was acquired by medical device company Tornier N.V. in a deal valued, at minimum, $135 million. The Medina-based company, which plans to remain in Northeast Ohio, produces screw and plate systems for the repair of small bone fractures and foot and ankle deformities.

Other notable exits: In April, LivingSocial purchased Cleveland-based ONOSYS (onosys.com), whose software facilitates online restaurant ordering.

Akron-based SUMMIT DATA COMMUNICATIONS (summitdata.com), a provider of industrial-grade and medical-grade wireless modules, was acquired in March by Laird Technologies for $22 million.

THE VENTURE CAPITAL ADVISORY TASK FORCE The Task Force is comprised of Greater Cleveland investors dedicated to continually increasing regional entrepreneurial investment and success.

To learn more about investment opportunities in Northeast Ohio, contact Lynn-Ann Gries, JumpStart Chief Investment Officer, at 216.363.3400 or lynn-ann.gries@jumpstartinc.org.

For previous years reports go to: jumpstartinc.org/results/reports

www.jumpstartinc.org

www.bioenterprise.org