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
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Message to Our Community
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The Path of Icons & Innovators
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Stories of Icons
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Stories of Innovators
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14 Recognizing Our Donors
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JumpStart’s Impact
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
Photo crediT Diann Mistelske
million in ten companies via JumpStart Ventures. # 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.
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
Ray T. Leach
Douglas L. Weintraub
Chief Executive Officer
Chairman 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.
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Photo credits Charles Brush: Copy of an original in the Special Collections Research Center, Kelvin Smith Library, Case Western Reserve University, Cleveland, Ohio. Arc Lamp: Permission for use courtesy of Cleveland Public Library Photograph Collection.
ICON
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 and continued to develop the arc lamp. His
plays as a global innovator in energy creation.
And the growth continues:
let the arc lamp operate reliably and efficiently
Charles quit his job selling iron ore in 1877 to work
2009: 300,000 employees worldwide 2009: $183 billion in sales
amount of fuel in the lamp, allowing it to run
Brush’s legacy is cemented in the role General Electric
on his idea for a dynamo electric engine and a powered arc lamp. At that time he looked to a childhood friend for capital. George Stockly, Vice President of Cleveland’s Telegraph Supply Company, heard from his
1880: Reorganizes company to form Brush Electric Company
own company directors that electric lighting was “a field without a future.” But 1877: Receives investment and guidance from childhood friend George Stockly
1876: Charles completes dynamo design improvements on paper 1877: Works full time to develop dynamo and electric arc lamp
1878: Gains endorsement from The Franklin Institute
1891: Merges with Edison General Electric Company to become General Electric Co.
without supervision, and led to increasing the all night without maintenance. Two years after giving up his day job, Charles unveiled his
arc lamp system at what is now Cleveland’s Public Square. According to The Plain Dealer, twelve lamps simultaneously lit the square as thousands watched in amazement. By 1883, the systems were across the country from Boston to New York to San Francisco, the company’s revenues
1883: $2 million in revenue
1879: Unveils electric lighting system on Cleveland’s Public Square
research led to the ring clutch, an innovation that
reached $2 million, and it had a workforce of 400 associates. By 1891, the company had merged with its top competitor,
1883: 400 employees
Thomson-Houston Electric Company, and then again with Thomas Edison’s company to form General Electric. The mergers created the GE we know today, which has over 300,000 employees with revenues of $183 billion, and remains at the forefront of energy creation.
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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
international organization that would introduce
in the world was transformational;
the world’s first car tire, aircraft tire, and spacesuit.
Akron became the “Rubber Capital of the World” as additional industry leaders such
B.F., a physician and inventor, invested in a small New
as Goodyear and Firestone came to the city. The B.F.
York-based rubber company in 1869 with his business
Goodrich Company eclipsed the million dollar
partner John P. Morris. He used his investment to pursue
sales mark in 1892, reaching $1.4 million and
his passion for inventing, but struggled to get the company
employing 400 people. Its sales numbers
going in New York. Familiar with Ohio after attending
continued to climb in the 20th century
what is now CWRU School of Medicine, B.F. was inspired
and as the Goodrich Corporation
by the financial incentives the city leaders of Akron were
today, the company employs over
offering for manufacturing companies to relocate to the
25,000 and is continuing its
city. In 1870, seven prominent Akron citizens invested
legacy of innovation.
With various follow-on funding investments throughout the 1870s, B.F. added qualified, experienced business leaders to his company. One of those individuals was George W. Crouse, who made an angel investment in 1878
1870: Relocates company to Akron after $13,600 investment from Akron civic community leaders
1869: B.F. invests in NY rubber company
1878: Secures angel investment and guidance from George Crouse who becomes VP
and put his finance and business background to work as Vice President. George’s funds, which were used to I
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1890s: Introduces pneumatic tire and experiences rapid sales growth
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1880: 55 full-time employees
1897: Winton Car Company uses and markets the pneumatic tire
1949: Produces first passenger car tire containing synthetic rubber 2008: $7 billion in sales 2008: Over 25,000 employees worldwide
Photo credits Permission for use courtesy of University of Akron University Libraries Archival Services.
today), which secured the company’s location in Akron.
1892: $1.4 million in sales 1888: $696,000 in sales
1880: $100,000 stock issued
$13,600 in the company (the equivalent of $250,000
1892: 400 associates
And the growth continues:
1880s: Applies solidband tire technology to bicycles
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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.
Photo credits Ray Kralovic: Courtesy of Ray Kralovic. System 1®: Photo provided courtesy of STERIS Corporation.
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 shipping of SYSTEM 1 and a couple
The passion he had for this one
years later it made an initial public
innovative solution helped define
offering with revenues over $45
Northeast Ohio as a center for
And the growth continues:
million and employment at 200. The
medical technologies and devices.
company’s innovation didn’t stop with Over 25 years ago, Ray proposed the idea to his employer, an established leader in infection control equipment. His
patents and 626 foreign patents, with another 96
employer however, thought the innovation was too radical
U.S. and 374 foreign patents pending. Its revenues
and a risky investment. After being refused R&D funding for
reached the $1 billion mark five years ago and
two years, Ray left his job and partnered with Ed Schneider,
today STERIS employs 5,000 people with
a medical engineer and entrepreneur, to work on the idea.
representation in more than 60 countries.
With his first external investment in 1985, Ray completed the
It remains the preeminent prevention,
prototype of the SYSTEM 1 Sterile Processing System and
decontamination, and surgical
filed his first patent. The Mentor-based company received
technology company in
follow-on funding from the State of Ohio in 1986 and Ray
the world.
®
began to validate the product’s marketability. To continue
1987: Receives Primus investment and guidance from Bill Sanford who becomes President
development, he contacted Primus Venture Partners, a Cleveland-based private equity partnership. The fund put Ray in contact with Bill Sanford, President of Symark Associates and a healthcare consultant with a history of buying and selling medical technologies. Ray won Bill’s buyin, brought him in as President of the company, and received
1998: Moves to NYSE
Ray’s idea, as STERIS holds 280 U.S.
1983: Ray’s employer denies request to fund sterilization idea 1985: Moves to Mentor and founds STERIS with Ed Schneider 1985: Secures funding
1990: Begins international shipments
2004: $1 billion in sales
1992: IPO on Nasdaq 1988: Manufactures and ships first product
1988: Completes regulatory reviews and receives market clearance
1992: 200 employees
a venture capital investment of $1.2 million from Primus, I
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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 product formulation and initiates FDA-guided preclinical animal studies
As the former Director of Life Science Commercialization at Cleveland Clinic Innovations, he was responsible for licensing
2008: Raises nearly $7 million in Series A investment
dozens of technologies to industry partners, including the two largest biotechnology deals in Cleveland Clinic history. Of those technologies, Rahul is most excited about the one he is now working to commercialize through Juventas Therapeutics, a
2007: Rahul launches Juventas Therapeutics with Dr. Marc Penn and Cleveland Clinic
2009: Secures $800,000 from Ohio Center for Stem Cell & Regenerative Medicine
2007: Raises $750,000 institutional investment round led by JumpStart
Cleveland Clinic spin-off company he helped create in 2007. Juventas Therapeutics is developing novel regenerative therapies for cardiovascular disease discovered by Dr. Marc Penn, a
2009: Submits Investigational New Drug application to FDA for first product
2007: Secures $1 million through Ohio Global Cardiovascular Innovation Center
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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,
INNOVATOR
FDA-guided animal studies and a Phase I clinical trial.
and several local angel investors. Within 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 human trial will position the company to raise additional 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.”
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Photo crediT Lauren Parsells
Juventas into its Phase I clinical trial. Completion of this
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
Photo crediT Diann Mistelske
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.”
company, Logos Energy. As a JumpStart Ventures client,
2007: Raises angel investment and grant money
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 for the two operating companies and levered that funding with an additional $5 million in development contracts from the Ohio Department of Development, the U.S. Army, the U.S. Air Force, and the National Science Foundation.
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2008: Creates holding company Logos Energy and subsidiary Phycal
2005: Kevin licenses fuel cell technology and starts Contained Energy
2009: 42 employees and interns
2006: Secures funding and guidance from JumpStart
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“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 industry. After perfecting and patenting the design of its punch tool, M.O.M. Tools is taking on the $30 billion worldwide market. Prior to 2008: John patents idea for tool and founds M.O.M. Tools
The design of John’s dual head punch tool incorporates an angular groove that acts as a second punch head, resulting in less breakage of the metal (maintaining the integrity of
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the entire metal piece) and a cleaner hole than today’s punch
2009: Completes beta test with successful results
2008: Works with JumpStart to secure beta customer
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tools, all at a lower cost. As he began his search for a beta an extensive beta test and in early 2009 connected with and
customer in January 2009, John connected with JumpStart 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 customer’s entire plant with an extended plan to 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.
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plan to roll out its dual head punch throughout its
INNOVATOR
Doug Hardman | SparkBase A JumpStart TechLift Advisors client
Doug Hardman had a vision for his software tool. Based on his expertise and past experience in software development, Doug believed he had developed a network that introduced modern technology to the gift and loyalty card processing industry, which had been dominated by antiquated systems and thinking. What Doug lacked was the resources he needed to add additional features to the system and get the word out to the rest of the industry. Doug connected with JumpStart
“JumpStart’s team helped fill a gap that allowed us to grow much more quickly. Without the help of my Entrepreneurin-Residence, I’d still be thinking of my vision instead of making it happen.”
With the new funding, Doug made significant progress against key milestones, receiving an additional $500,000 in funding, tripling the size of his team, and completing the 3.0 version of the SparkBase software. This version incorporates an SMS Gift Card Portal that connects to more than two million card holders – all of whom will be using the SparkBase network when they cash in their cards – and allows merchants to connect with their customers instantly. SparkBase’s client base has also tripled in just six months and Doug recently signed a $125,000 deal to develop a whole new platform tailored to one customer. “JumpStart’s team helped fill a gap that allowed us to the help of my Entrepreneur-inResidence, I’d still be thinking
TechLift Advisors in January 2007
of my vision instead of
and began to finalize the company’s
making it happen.”
Photo crediT Lauren Parsells
business plan and perfect his investor 2007: Works with JumpStart to develop business plan and investor presentation
presentation. With the technical assistance and connections provided by JumpStart TechLift Advisors, Doug secured a loan from Cuyahoga County’s North Coast Opportunities Technology Fund (NCOF) in October 2008. This infusion of development capital paved the way for a Series A round by Blue Olive Partners to ensure proper staffing and marketing of SparkBase.
Prior to 2006: Doug begins development of SparkBase
2009: Raises Series A and additional angel funding and completes new product development
2008: Secures funding from Cuyahoga County’s NCOF
2006: Doug becomes CEO of SparkBase
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2009: Increases customer base by 400%
grow much more quickly. Without
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“Eight jobs might not seem like a lot, but that’s just the beginning. I am expecting to grow our reseller channel significantly, which will require iGuiders to hire customer service personnel and marketing professionals to support our growth strategy.”
INNOVATOR
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.
investor presentation and assisting with market validation,
2009: Secures funding and guidance from JumpStart
Jodi’s TechLift Advisors Entrepreneur-in-Residence brought iGuiders to JumpStart Ventures. Jodi moved her company
2009: Launches Guiders platform
into the Beachwood Business Development Center just prior to receiving a JumpStart Ventures investment in February 2009.
2007: Jodi identifies need for 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.
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2009: 8 employees
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continue product development. After helping to finalize her
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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. BSKLive’s flagship product, StaffKnex, is a web-based application that manages employee scheduling and staffing for companies with shift-based workforces. After presenting at JumpStart TechLift Advisor’s First Pitch, Mark secured a JumpStart Ventures investment in January 2009 alongside an angel investment from North Coast Angel Fund. “The
Photo crediT Lauren Parsells
process of going through JumpStart is very similar to the fundraising process, which I’ve gone through before. It’s tremendously
“The process of going through JumpStart is very similar to the fundraising process, which I’ve gone through before. It’s tremendously helpful for entrepreneurs because it prepares them for the follow-on rounds of funding that most businesses will need in order to grow.”
By the end of fall 2009, BSKLive expects to attract another equity investor in the range of $1 to $1.3 million. The company continues to secure new customers in the healthcare market, with each customer’s cost savings averaging $50,000 to $100,000 per year. This is expected to set the company on a course to capture a substantial portion of all companies employing shift-based workers, including those beyond healthcare. This market
2009: Expands implementations and proves sales repeatability
represents 40 percent of the U.S. workforce, which the team calculates to be valued 2009: Secures beta clients and prepares to scale sales
at over $2 billion.
2008: Mark becomes CEO of BSKLive 2009: Secures funding and guidance from JumpStart
Prior to 2008: Mark sees potential in BSKLive’s product
2009: Beta clients validate value proposition
2009: Completes next stage of software development
helpful for entrepreneurs because it prepares them for the follow-on rounds of funding that most businesses will need in order to grow.” With the I
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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, helping our clients identify and secure external funds for growth, and creating jobs and rippletype impact in the region.
Impact | On Company Growth Inception through June 30, 2009
JumpStart Ventures Investing
$14.37 million through 51 investments in 39 companies, of
Impact | On Entrepreneurs
which 12 are woman or minority-owned or led
Inception through June 30, 2009 Creating the connections for Reaching
30,140 members of the entrepreneurial community (6,030 of whom are diverse) to introduce the services of JumpStart
portfolio companies to raise an additional
$74.2 million
in external funding (excluding JumpStart funding) – a 5:1 leverage ratio of JumpStart’s investment
Reviewing
6,620
JumpStart Inclusion Advisors
business overviews from entrepreneurs
Advising 25 client companies,
(1,125 from diverse entrepreneurs)
of which some are JumpStart Ventures portfolio companies and have raised
Providing over
67,650
$23.3 million in external funding
hours of free assistance to entrepreneurs
JumpStart TechLift Advisors Connecting
3,500
entrepreneurs with investors, business mentors and service providers through IdeaCrossing, the online resource
Advising
370 client companies, which have raised
$19.1 million 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
Impact | On Northeast Ohio’s Economy Economic impact over the past three years totaling
$175 million, including $76 million in Northeast Ohio in 2008, as reported by Cleveland State University – a 29 percent increase from JumpStart’s 2007 impact of $59 million JumpStart’s 2008 impact included
$8.3 million in taxes generated – almost equal to JumpStart’s annual budget, including funds for direct investments
$20.9 million in household income generated in 2008
502
jobs created (direct and indirect)
Portfolio and Client Company Highlights The portfolio and client companies with which JumpStart works have had tremendous accomplishments. (Inception through 6/30/09) Here are some highlights: Recognized in the Top 10 in their fields • Embrace Pet Insurance No. 2 pet insurance company according to PetInsuranceReview.com • InSeT Systems Top 10 technology of 2008 by Popular Science • STACK Media Top 10 most visited sports website in the country according to comScore Media Metrix • Synapse Biomedical Top 10 medical innovation for 2009 by the Cleveland Clinic Recognized as leaders in their industries • Great Lakes Pharmaceuticals “One of the more exciting technologies we have seen” according to the National Institutes of Health • PreEmptive Solutions “A company to watch” according to one of the leading consultants in their field • Tremont Electric One of “America’s Most Promising Startups” according to BusinessWeek Recognized by national media • CardioInsight Technologies graced the cover of Heart Rhythm magazine
Impact | Recognized JumpStart was the national recipient of the
2009 Excellence in Urban or Suburban Economic Development Award from the Economic Development Administration
• CardioInsight Technologies, CerviLenz, and Synapse Biomedical highlighted in The New York Times • Embrace Pet Insurance and PreEmptive Solutions featured in Entrepreneur magazine • iCubed International’s microwave featured on ABC’s The View • InSeT Systems featured in Inc. magazine • MAR Systems featured in Black Enterprise magazine • PreEmptive Solutions noted in USA Today
JumpStart is the 15th most active early-stage investor nationally according to Entrepreneur magazine and has been featured in The
Wall Street Journal, The New York Times, USA Today,
and The Chronicle
of Philanthropy,
with over 1,000 cumulative media placements IdeaCrossing was recognized with the
Dominion Foundation Community Impact Award and the Oberlin Research Group Award for Best Single Innovation
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
• reXorce Thermionics featured in The Wall Street Journal • Synapse Biomedical featured on Forbes.com • Wireless Environment highlighted in VentureBeat Secured 94 patents with another 87 in process (JumpStart Ventures portfolio companies alone) Secured partnerships with global leaders — Microsoft, Sears, FedEx, Novelis, Marriott, and Lloyd’s of London, among others Hired 269 employees (JumpStart Ventures portfolio companies alone) Raised $134 million in external funding (not including JumpStart Ventures investments) 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
The mission of the Burton D. Morgan
vitality of 26 U.S. communities where the 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 Charitable Foundation,
organizations and institutions that foster 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
the entrepreneurial spirit.
through grant making, and providing leadership on vital issues.
principal funding from The PNC Financial 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
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
14
Foundation
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
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
l State of Ohio l Foundations l Corporations
30%
JumpStart’s unique public-private partnership reflects
64%
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
$14.4
6% 100%
Civic, Business, and Individual Donors Baker Hostetler
Sources of Funds – Operations
Calfee, Halter and Griswold
5%
Dix & Eaton Dollar Bank
20%
l l l l l
31%
Ernst & Young Fifth Third Bank
38%
6%
Huntington National Bank
State of Ohio Federal Government Foundations Corporations Individual & Prog. Fees
Jones Day 100% of JumpStart’s Associates
State of Ohio
$6.6
100% of JumpStart’s Board of Directors
Federal Government
$1.3
6%
Foundations
$8.0
38%
Corporations
$4.3
20%
STERIS Corporation
Individuals & Program Fees
$1.0
5%
The William & Pamela Summers Family
$21.2
The David and Lindsay Morgenthaler Foundation Oberlin Research Group Squire, Sanders & Dempsey
31%
100%
Thompson Hine
Foundation Donors
uses of funds
The Charter One Foundation
10%
The Kathryn and Lee Chilcote Foundation
12% 40%
The George W. Codrington Foundation The Dominion Foundation
37%
The Eaton Charitable Fund
l l l l
Investments Ventures/TechLift/Inclusion Marketing/IdeaCrossing General Admin/Fundraising
The GAR Foundation The Ewing Marion Kauffman Foundation
Investments
$14.4
41%
The Fred A. Lennon Charitable Trust
Ventures/ TechLift/Inclusion $13.2
37%
Marketing/ IdeaCrossing
$4.3
12%
General Admin/ Fundraising
$3.7
$35.6
The Lincoln Electric Foundation The Nord Family Foundation The Parker Hannifin Foundation The Raymond John Wean Foundation
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
10% 100%
15
realizing our future
to give context to the progress of our current entrepreneurs and the role of JumpStart in helping them 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 entrepreneurial icons in the making here whose innovative ideas and high growth companies will create thousands of jobs and lead to regional prosperity.
We can learn from cities within our own region that have experienced similar transformation, such as Akron. Akron’s economy faltered dramatically in the late 1970s and early 1980s with the decline in the rubber industry; more than 10,000 manufacturing jobs were lost in that time2 and declines continued for the next 15 years. The city, under the inspired and determined leadership of Mayor Don Plusquellic, responded consistently with a variety of economic development initiatives, including establishing an incubator to promote entrepreneurship and investing in an Israeli incubator to bring startups to the area. The universities and local companies also consistently increased investment in polymer chemical R&D activities. As a result, while still lagging national performance, Akron’s job 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 the entire region. Per capita income growth is also the highest in the region. While Akron’s journey isn’t over, it shows us that support for entrepreneurship and innovation can change a region. 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 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.
16
1 Economy.com, 1997-2007; 2Economy.com reported by Ledebur and Taylor, “Akron, Ohio: a Restoring Prosperity Case Study”; Metropolitan Policy Program at the Brookings Institution; 3Economy.com, 1997-2007 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. Photo crediT Lauren Parsells
In this report, we reflect on the historical accomplishments of a few of our region’s entrepreneurial icons
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 速
COUPAD 速
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
Mr. Steve Walling Chairman and CEO, Plasticolors, Inc.
Mr. David Wilhelm
JumpStart Inc. | 737 Bolivar Road, Suite 3000 | Cleveland, OH 44115 Voice: 216.363.3400 | Fax: 216.363.3401
Founder and Partner, Adena Ventures
Design: Boondock Walker
Staff Surgeon, Cleveland Clinic Children’s Hospital