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Emerging Entrepreneurs
JumpStart Wants to Underwrite Success StoriesNew economic development organization works to overcome stand-pat attitudes.By Dennis LaRueA new economic-development organization, JumpStart Inc., would tap the wealth in northeastern Ohio to create jobs for "tens and hundreds of thousands of employees."There's a big disconnect between the wealth [old money] and the opportunities in this region," says the president and chief executive officer of JumpStart, Ray T. Leach.Leach and JumpStart's chief marketing officer, Thom Ruhe, have been traveling throughout 15 counties to get the word out about their organization, its goals and how they hope to achieve them.Leach, a native of Akron, earned his baccalaureate in finance at the University of Akron and his MBA at Massachusetts Institute of Technology. A year and a half ago, he returned to the region to help form JumpStart, the offspring of NorTech (Northeast Ohio Technology Coalition) and Case Western Reserve University when they combined four organizations that foster entrepreneurship.JumpStart recruited 23 trustees, including representationfrom all public universities in northeastern Ohio. The dean of Youngstown State University's graduate school, Peter Kasvinsky, represents that institution. Kasvinsky, whose Ph.D. is in biochemistry, sees YSU as "a forum, a neutral site" where entrepreneurs can network. He's met with the deans of the colleges of liberal arts, business and engineering to brief them on JumpStart, he says, and the chairman of the departments of chemistry, physics and biology. Faculty and deans will serve as consultants and the university will offer its facilities."JumpStart has a super approach," Kasvinsky offers. "Ray [Leach] has recruited great people with good ideas."JumpStart has a staff of 15, including two entrepreneurs in residence, whose purpose is to advise, guide and find financing for the seven companies chosen for each 120-day cycle. The next cycle begins March 1, 2005.JumpStart's mission, says its Web site, "is to accelerate the growth of ideas and businesses into venture-ready companies through providing vital, focused resources to entrepreneurs and the community." It's needed, Leach explains, because the region ranks near the bottom nationally as being conducive to entrepreneurship.Citing the Milken Institute, whose annual report, "Best Performing Cities: Where America's Jobs are Created and Sustained," ranks the 200 largest cities in the United States in terms of job creation and retention, Leach points out that Youngstown-Warren ranked 199th in 2003 (up to 175th this year), Cleveland-Lorain-Elyria ranked 194th (up to 187th in 2004) and Akron 180th (up to 153rd). Canton-Massillon fell to 196th from 149th."We were in the bottom 10% by most measures," Leach comments. What makes the poor performance of northeastern Ohio all the more remarkable, as Ruhe sees it, is "the abundance of research universities" here yet the relatively low number of patents granted.The region lacks an entrepreneurial culture, something JumpStart intends to change. The established companies, many of them once highly successful manufacturers, "became victims of our own success," Leach says. "We went from creating wealth to protecting wealth. We went from creating businesses to protecting businesses." The upside, he says, is considerable untapped wealth JumpStart hopes to turn to for venture capital.JumpStart intends to identify companies in their early stages "that need help, need resources, need financing from the private sector," Leach says. It does not intend to displace or replace other economic development organizations such as Mahoning Valley Economic Development Corp. or Score (Service Corps of Retired Executives). "We have different people. We're on a different mission," he explains. For each 120-day cycle, JumpStart hopes to have 200 applicants and choose seven, Kasvinsky says. The top 50 of those not chosen, he continues, "will have some good ideas" and YSU (and other universities) would want to work with such companies. "The college of business could help, or engineering or chemistry," the dean says.In brief, JumpStart wants to invest funds, that is, take an equity position, in "early-stage Northeast Ohio companies that have solid prospects for high growth," Leach says, "and then provide business services to help them achieve that growth." It does not provide grants. Since it cannot always take an equity position, it will approach those who can afford to take partial ownership as circumstance require.JumpStart will fund companies that meet its criteria regardless of the industries they're in, Leach says. But he expects the focus will be on companies engaged in "IT [information technology], advanced materials and bioscience." JumpStart does not charge for its services, he emphasizes.JumpStart's staff and executive team can work with a wide variety of companies, Leach states, because they have backgrounds that can help people knowledgeable about technology succeed in building their businesses. The executive team, Leach says, comprises "experienced entrepreneurs, investors and business-development professionals. Many have either personally started their own businesses or participated in starting a business." "