Ohio's 'Fund of Funds' Makes Some Headway in a Brutal Market
Manager, The Ohio-Midwest Fund
The venture capital market may be in the doldrums—or worse—at the moment, but the in-state manager of the $102-million Ohio Fund remains bullish on venture capital in the long term.
"This is actually a great time to be in this asset class" as more groups add venture to their mix, Mel Carter told the OVA at its November lunch. "We'll have a bit of a dip, but this is an asset class that will continue to grow."
The Ohio Fund is a so-called "fund of funds," capitalized by Ohio's public employees' pension system and managed by Credit Suisse, which added $2 million of its own capital. Since it was established in 2005, its managers have engaged in discussions with more than 300 fund managers, and about three-quarters of its capital has already been invested. The fund estimates it has thus far helped to create and sustain at least 2,500 jobs in the state and attract more than $61 million in additional capital, creating a net impact on the state's economy that's now approaching $200 million.
It doesn't do that work from a remote location, he noted, but instead maintains an ongoing physical presence in Ohio. "To execute all this, you need someone on the ground," he said. "We look at who the teams are, what their strategies are and what the timing is, and how that fits our clients' needs." This approach, he said, "allows us to look at some smaller, emerging (fund) managers. And it's stage agnostic." He said the fund's allocation mix will eventually be about 40% venture, 20% growth and 40% buyout.
"Despite what you read in the paper, Ohio's really doing well on a number of fronts," he asserted, rating its progress only behind a handful of such venture-rich states as Massachusetts, California and Texas. "Now the level of investment, that's another story..."
He acknowledged the obvious: That like all investments in every asset class, it's been a brutal last few months for investors. "It's been a very painful two quarters for our clients. The average pension fund is down about 20%."
He joked about his fund's notoriously thorough due diligence process. "People have described it as a very invasive process. Some have said it in more graphic terms," he said to considerable laughter from the audience.
Mr. Carter predicted that the materials sector—a key strength for Ohio's economy, but one which hasn't figured too prominently in the fund's investments up to now–will grow in coming years. Information technology, he added, will continue to be a key focus for the fund. "The IT opportunities you find in Northeast Ohio are greater than you'll find in other parts of the state."
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December 12, 2008
Rahul Aras, PhD.
President & CEO
AcelleRX Therapeutics, Inc.
The Union Club
1211 Euclid Ave.
Rahul Aras is the Founding CEO of AcelleRX, a Cleveland Clinic spin-off company that has raised $11 million in equity and State grant funding to develop regenerative medicine technologies for treatment of cardiovascular disease and other ischemic disorders.
Prior to joining AcelleRX, Rahul was the Director, Life Science commercialization at Cleveland Clinic Innovations (CCI) where he has managed commercialization of all biotechnology and pharmaceutical related technologies. He is responsible for having negotiated dozens of licenses and strategic alliances with a range of private and public companies including industry leaders such as Merck, Pfizer, Genentech and OSI Pharmaceutical.
While at CCI, Rahul significantly increased biotechnology related deal flow leading to several million dollars in revenue and is responsible for negotiating the two largest biotechnology deals in Cleveland Clinic history.
Rahul received an undergraduate degree from Tufts University and a Ph.D in biomedical research from New York University.
His doctoral work earned him a CHRO Young Investigator award and was highlighted by Nature Genetics and Nature Microbiology for its impact in the field of microbial genetics and pathogenesis.
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Fitness for Financially Stressed Employees
Vincuro, LLC is hoping to turn employee financial stress into a business.
The company plans to provide web-based tools as well as various financial instruments to help employees improve their financial fitness. Its team has experience in software start-ups and e-learning. "We want to hit the market in just a few months," said CEO Steve Harf. "The pricing is very simple: it's $50 per employee, per year."
The company is seeking participation by angel funders in a $1.65-million round of funding.
For more information, contact Steve Harf, at firstname.lastname@example.org, or by going to www.vincuro.com
Aiming to Revolutionize Construction-Industry Software
CutterCroix, LLC's ambition is no less than revolutionizing the way the construction and contractor industry uses software. "We want to do for contractors what Turbo Tax did for taxpayers," said co-founder and principal Mark Slavik.
The company, which has been approved for an Ohio Technology Investment tax credit, plans to offer custom software at off-the-shelf prices, offering a template-based solution. It plans to go to market through various channel partners, and is also seeking $1.65 million.
For more information, contact Mark Slavik, at email@example.com, or by going to www.cuttercroix.com
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