October 2014

Creating a Seed Stage Investment Fund in Your Community: The Nor theast Ohio

Story

Is there suf f icient unsatisfied seed stage deal f low in your region to support a new fund that would invest in 10-20 deals annually?

– What is a good way to estimate current and recent pre-seed/seed deal flow?

Is your region lacking suf f icient seed capital resources to fund existing, high-quality seed stage deal flow?

– How can we quantify the amount of pre-seed/seed capital available for investment now?

You Are Probably Wondering …

Cleveland in 2000

Cleveland Needed More than Infrastructure

all netnew jobgrowthstemmed mostly from high growth entrepreneurialcompanies.

In the past 30 years,

And Then … There was JumpStar t

Practical Considerations

COMMUNITY BUY-IN

PATIENCE METRICS EXPECT FAILURE FIRST

FundingGovernment, Philanthropic Foundations & Individuals

FUNDING SOURCES

VARIOUS SOURCES

GRANTSNON-PROFITSGOVERNMENT

ANGELS VC AND ANGELS VC AND PRIVATE EQUITY

TYPICAL FUNDING $25K-50K $25K-250K $250K-500K $500K - $3M $3M - $50M

COMMERCIAL DEVELOPMENT

Identify the market opportunity

Define the business model and market opportunity

Validate the commercial concept with test market sales

Validate the opportunity through growth of sales, margin, and customer satisfaction

Achieve profitability, sales growth, and expanded distribution

TECHNOLOGY & PRODUCT DEVELOPMENT

Prove the functioning of critical components of the technology or product

Prove the performance of the technology or product against market specifications

Develop a market-ready product, proven by customer tests, at cost and quality targets

Introduce the product with manufacturing, quality, service, and distribution capabilities

Implement a comprehensive product line strategy

Investment Thesis and Guidelines

DEMONSTRATINGGROWTH &

SUSTAINABILITY

JumpStart’sFocus

Talent

No Risk, No Reward

Diligence, Pitch, Invest

Ongoing Mentoring / Coaching / Oversight

JumpStar t’s Nor theast Ohio Results

JumpStar t: Annual Deal Flow

4.4M People Populate Northeast Ohio

JumpStar t Por tfolio: # of Investments

YEAR # NEW INVESTMENTS # MINORITY/WOMEN LED

2005 6 2

2006 9 3

2007 8 1

2008 8 2

2009 9 1

2010 9 2

2011 6 2

2012 11 2

2013 11 1

Total 77 16

21%

JumpStar t Por tfolio: $ Invested

FISCAL YEAR(ends June 30)

FUNDS INVESTED AVERAGE FOLLOW-ON RAISED

2005 $1,555,000 $2,380,000

2006 $3,867,442 $2,990,410

2007 $3,365,000 $13,894,123

2008 $3,849,991 $29,549,837

2009 $3,160,000 $22,284,731

2010 $3,178,000 $41,987,879

2011 $3,200,000 $53,994,921

2012 $3,875,000 $73,855,223

2013 $3,200,000 $100,356,174

2014 0 $97,176,285

Total: $29,250,433 $438,469,583Average: $3,250,048 $43,846,958

JumpStar t Por tfolio: Company Status

INITIAL INVESTMENT (FISCAL YEAR)

NUMBER OF COMPANIES THAT

CLOSED

NUMBER OF COMPANIES THAT

EXITED

NUMBER OF COMPANIES

STILL OPERATINGTOTAL

2005 2 1 3 6

2006 3 1 5 9

2007 5 0 3 8

2008 4 2 3 8

2009 3 2 4 9

2010 1 3 5 9

2011 0 1 5 6

2012 0 0 11 11

2013 1 0 10 11

Total 19 10 48 77

25% 13% 62% 100%

• Lynn-Ann GriesChief Investment Officer, JumpStart Inc., Cleveland, OH

216.363.3403, lynn-ann.gries@jumpstartinc.org

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