Girls entrepreneurs meet with JumpStart employees at a networking occasion in October 2015 in Cleveland, Ohio.
Ohio has a message for women- and minority-led startups: Transfer to the Buckeye State and you’ve got an actual shot at getting funding.
Main the cost is Cleveland-based JumpStart, a nonprofit that invests in younger tech companies.
“Part of our focus is to accelerate opportunity for women and minority entrepreneurs in Ohio,” mentioned JumpStart CEO Ray Leach. It now needs to increase that mission nationally.
JumpStart has launched a $10 million seed fund that can solely spend money on girls and minority-led tech startups.
The Focus Fund will spend money on about 20 firms in lower than three years — ideally younger firms with 5 staff or much less. JumpStart can even take fairness within the startups, though it could not disclose how a lot.
Every startup will get $500,000 in funding. The catch: Entrepreneurs should transfer their headquarters to Ohio to attain the cash.
“We do require them to move Ohio, but they don’t have to stay for any particular period of time,” mentioned Leach. “Having said this, we believe once they come to Ohio they will not see any need to leave.”
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Ohio already has some sturdy pockets of innovation. Cincinnati, Columbus and Cleveland all have vibrant startup ecosystems, fueled by top-notch accelerators and a rising pool of VC cash and angel buyers, mentioned Leach.
Healthcare IT, biotech, cleantech and wearables are among the hottest areas.
“Ohio has invested nearly $500 million in the last five years to advance its entrepreneurial ecosystem,” mentioned Leach.
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Public-private partnerships, just like the JumpStart Focus Fund, are a part of that effort.
JumpStart, based in 2005, has invested in 85 early-stage tech companies in Ohio. 35% of these have girls or minority founders.
That quantity of variety in its funding portfolio is uncommon, provided that 95% of enterprise capital funding within the U.S. goes to male-led startups, mentioned Leach, who’s additionally a member of the Nationwide Enterprise Capital Affiliation’s variety and inclusion activity power.
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Leach mentioned the Focus Fund is the biggest seed fund of its form to focus totally on girls and minority-led tech startups. (The state of Ohio is offering half of the funding, whereas JumpStart will present the opposite half.)
JumpStart is transferring rapidly to seek out the proper companies, and it expects to make the primary funding within the subsequent 90 days.
“We know there are great innovators who will bring their expertise, talents and relationships to advance Ohio’s entrepreneurial economy,” mentioned Leach. “It is also our hope that Ohio will be better recognized as one of the most dynamic entrepreneurial states in the country.”
He additionally hopes that the Focus Fund will set an instance for the VC trade as a complete.
“We have a long way to go to embrace diversity in this industry. But you have to start somewhere,” he mentioned. “We want to see a ripple effect of what we’re doing in Ohio to happen across the country.”
CNNMoney (New York) First printed January 20, 2016: 8:07 AM ET
