Case Study: Cleveland and JumpStart Inc

Background

Like many regions in America’s industrial heartland, Cleveland and Northeast Ohio have faced decades of economic adjustment and struggle as once powerful manufacturing industries have declined and collapsed. Since the 1970s, the region has embraced multiple approaches to economic development and revitalization, such as a focus on tourism, new sports stadiums, eds and meds, and other approaches. Beginning in 2004, a group of foundation executives and community leaders chartered the Fund for Our Economic Future with an explicit mission of reinventing the region’s approach to economic development and to “transforming a decrepit Rust Belt into a 21st century knowledge economy.”31 The Fund brought together more than 100 organizations to support several shared goals: 1) Attract businesses and help them grow 2) Improve the education and job training of the workforce 3) Bolster racial inclusion by helping minority business development 4) Implement regional policies to support growth while improving government efficiency

The Fund invested in numerous organizations to support these varied objectives, and local leaders acknowledge that not all of these investments panned out. However, they do share a strong consensus that their efforts to invest in business development have proved highly successful. This effort, led by JumpStart, Inc., is profiled below.

Key Organizations: JumpStart, Inc.

JumpStart Inc’s initial mission was straightforward but challenging: build a world-class entrepreneurial ecosystem in Northeast Ohio. JumpStart operates as a venture development organization that provides technical assistance to small businesses and technology companies, supports a regional network of service providers, and invests directly in promising local companies. JumpStart currently supports a number of programs focused on business development. These efforts help companies and entrepreneurs at all points of the business growth continuum. Aspiring entrepreneurs can tap into the Build My MVP programs, a six-week workshop series to help develop minimal viable product concepts. The twelve-week Small Business Impact program supports more expansive business planning and development work, and the Small Business Blueprint program helps founders speed their company’s growth trajectory. Along the way, various other types of mentoring, coaching, and technical assistance are readily available.

These coaching services are also accompanied by robust mix of funding sources. In addition to offering connections to banks and other funding sources, JumpStart manages three venture funds that provide investments ranging from $250,000 up to $1.5 million. Many of the programs developed by JumpStart were the first of their kind, and these efforts won numerous awards for innovation in economic development. Today, the types of strategies first pioneered by JumpStart are considered to be “best practices” for building inclusive and robust entrepreneurial ecosystems.

31 John Dorschner, “A Big Job: Retooling Northeast Ohio’s Economy,” Report prepared for the JohnS. and James L. Knight Foundation, 2007, p. 2. Available at: https://knightfoundation.org/wpcontent/uploads/2019/06/2007_12_10_Northeast_Ohio_scribe_report.pdf.

While JumpStart embraced diversity and inclusion from the outset, it has institutionalized this commitment over the years via a number of program introductions, residents, and reorientations. Some milestones of this work include;

◼ 2009: Creation of JumpStart Inclusion Advisors and JumpStart TechLift Advisors ◼ 2017: JumpStart creates its new Focus Fund, which provides financing ($250,000 and above) for early-stage minority-owned technology ventures ◼ 2017: JumpStart’s first managing partner for inclusion, Erin Horne McKinney joins the team ◼ 2020: JumpStart and four other regional economic development organizations engage Ron

Stubblefield as a shared Entrepreneur-in-Residence, with a focus on advancing Black and Brown tech entrepreneurship

Impacts

JumpStart regularly tracks and publishes data on its economic impacts. These assessments are generally managed by third-party researchers, such as Cleveland State University or private consultants. In 2020, the organization worked directly with 1,385 companies, 56% of which were led by women and 49% of which were led by Black or Latinx entrepreneurs. In addition, JumpStart’s network partners collectively engaged 2,073 companies, 49% of which were led by women and 39% of which were led by Black or Latinx entrepreneurs. 32 Firms using JumpStart services performed well, even in the midst of the COVID-19 pandemic. Assisted companies in Northeast Ohio saw a 2% increase in jobs between 2019 and 2020. JumpStart also assesses its overall economic impacts that engage a wider region of Ohio and Western New York. Overall, its programs were estimated to support more than $1.3 billion in regional economic activity in 2020. Since 2010, these impacts have been estimated to exceed $9.1 billion in overall economic activity.33

Lessons Learned

◼ Embrace Performance Measurement: From the start, JumpStart has embraced expansive performance metrics and regularly publishes reports on its program impacts and outcomes. By actively sharing these metrics, JumpStart has cemented its important place in the regional ecosystem and provided essential feedback to key partners and funders. Most importantly, the

JumpStart performance measurement system helps to support the design and improvement of its own program portfolio.

◼ Provide Comprehensive Programming: JumpStart partners with many different organizations, but, when it comes to building businesses, it has most of the needed of services in-house under one roof. As a result, JumpStart can be a “one stop shop” for local entrepreneurs regardless of where they are in their own business journeys.

◼ Power of Philanthropy: Northeast Ohio’s ecosystem building efforts have benefited greatly from the extensive support provided by local and national foundations. The initial Future Forward NEO effort was spearheaded by major foundations, and many of JumpStart’s current programs are also

32 Jumpstart Ohio 2020 Economic and Fiscal Impact Report, p. 9. 33 Ibid, p. 3