Ohio Venture - OVA Review Newsletter
News from the Ohio Venture Association meeting on February 11, 2011

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Keynote Address:

Venture Capital Summit VI:
2020 Vision

With its innovative and pump-priming Third Frontier program, Ohio is the envy of much of the rest of the Midwest, though it can hardly afford to become complacent. At the same time, if they hope to attract serious add-on funding from outside the region, Ohio entrepreneurs and their funders must redouble their efforts toward creating companies that truly have the potential to change the world.

Those were among the main themes emerging from OVA's sixth-annual Venture Capital Summit, convened on February 11th at Corporate College East.

"Our fund invests all over the Midwest, and everywhere we go, we hear companies, entrepreneurs and even other funds and other entities say they all look to Ohio," said Bill Trainor, co-founder and managing director of Access Venture Fund. "And that's great—we definitely have a lead, or a head start. With that being said, I wouldn't be shocked if, in the next half decade or so, a number of these states basically copy and imitate what we do." That means this is certainly no time to rest on our collective success, but to instead continue to push ahead on further improvements to and refinements of the state's innovation ecosystem, he added.

During a panel discussion about the importance of drawing investments from funds outside the Midwest—given that the average Series A investment from Midwestern funds is much smaller than the national average, Jay Katarincic of Draper Triangle articulated the central issue.

"We need to look in the mirror as entrepreneurs and as the venture guys in the region. We need to continue to create the kind of compelling companies that are attractive to investors outside the region. I think there are plenty of examples of companies that have a compelling enough story to be able to attract those dollars. I hope no one thinks we should create programs to fund companies [just] to continue to survive. We need to create companies that are changing the world, and therefore are very compelling stories to investors. Investors will get on a plane if it's a compelling enough story. And the more compelling stories we create, the easier it's going to be to attract those dollars into the region."

In his keynote address, Detroit-based entrepreneur, investor and author Josh Linkner hit on the importance of disruptive creativity in building successful companies. He noted that a 2008 Harvard study found that creativity is mostly a learned behavior. "Yet we talk ourselves out of creativity. As a nation, we have scrawny creativity muscles."

Linkner, founder of the interactive promotional agency ePrize and a former Ernst & Young Entrepreneur of the Year, also recently published a book on creativity, Disciplined Dreaming. "With ISO-9000, you have to follow it every day, 24 hours a day, for the next 18 years before you get results. With creativity, one idea is all it takes," he said. "We need to ask three questions again and again: Why? What if? Why not?"

During a panel on business incubators, the heads of two incubators noted that they're not the answer for everyone.  "I'll actually start out trying to convince an entrepreneur not to move into the incubator," said David Crain, of Magnet. "One of the cons is, there's a cost to coming in the incubator. We have to pay our bills just like everyone else. So if the entrepreneur has everything they need to work out of their basement, garage or kitchen, then I say stay there. I'm happy to work with that entrepreneur virtually or over the phone."

Dr. Anthony Margida, head of the Akron Global Business Accelerator, added: "If they're in the imagining stage, then it's just as well that they continue to operate either in a virtual environment or home, until they find some funding and they're ready to build to the next level." But when a venture is ready, he and other panel members noted, it might be ideal. In addition to below-market rates for office, lab and manufacturing space, "people know that we're not rough landlords. We don't throw people out when they can't make a payment or two. We know what the environment is like for small companies. So we work with them." Probably the biggest advantage is the synergy of the environment, Dr. Margida added, the chance to rub elbows each day with so many creative, inspiring people who don't take no for an answer.

Here are a few other highlights from the summit:

  • Josh Linkner: "Think of mistakes as the portals of discovery."
  • Paul Allen, of Launch House: "We started as a community for young entrepreneurs, and now we're a community for young entrepreneurs and those who are young at heart. And our goal is to create a place where people can get some seed capital, encouragement and the social support they need...We encourage fast and furious failure."
  • Kerri Breen, of Florida-based Arsenal Venture Partners: "People refer to us as the Army's venture fund."
  • Jay Katarincic of Draper Triangle: "I do think the research institutions need to continue to try to improve their processes for getting deals in and out of the pipeline quicker. I think it's become simpler for universities to take their research and give it to big companies, and get a royalty stream, and not have to work for the big equity hits...We talk with the folks at Carnegie Mellon and Case that they need to continue to innovate through spinning out companies."
  • OVA president Jonathan Murray: "When I came here 12 years ago, entrepreneurship happened in small, isolated pockets...that has all changed in the last eight years."

Webcasts from the Meeting:

Click on the image below to view part one of the presentation as video.

Video Webcast from Recent Meeting
Keynote Address: Josh Linkner, Founder and President, Detroit Venture Partners
Topic: "Disciplined Dreaming?"

Also see OVA Venture Capital Summit VI: 2020 Vision:

Webcasts produced by Tom Kondilas.

Upcoming Meetings:
 

April 8, 2011
Mike Bunker

Early Stage Partners
Steve Spoonamore
ABS Materials
Jason Rottenberg
Arsenal Venture Partners

May 13, 2011
Charles Stack
Sideways LLC

June 10, 2011
Venture of the Year Award
Now Accepting
Nominations

See complete details and registration for these events.
 

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