Ohio Venture - OVA Review Newsletter
News from the Ohio Venture Association meeting on May 13, 2016

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The State of Venture Capital Investing

Introduction:

  • Falon Donohue - Executive Director, VentureOhio

Panelists:

  • Mike Stubler, Draper Triangle
  • Adam Veverka, NewSpring Capital
  • Andy Jenks, Drive Capital

Moderator:

  • Mark Weisman, Navidar

With Ohio's Third Frontier program having injected about $2 billion into the state's innovation ecosystem in the last dozen years, "Ohio's doing really well in the creation of start-up and seed-stage companies," the executive director of VentureOhio told OVA members at their May event.

But Falon Donohue went on to also outline the remaining challenges, which are considerable. "Ohio's ranked 21st in capital per capita, and that equals $25 per person. In California it's $700. We still need to raise around $8-9 billion to get on their level, but we believe we have the resources here to sustain a growing entrepreneurial ecosystem, with the universities, angel capital and Ohio Third Frontier."

A panel of prominent Ohio-based VCs talked about the kinds of opportunities that most interest their organizations. "Everyone has their own investment philosophy, but for us, it's the three Ms: Market, management & business model," said Adam Veverka of NewSpring Capital, which has invested in more than 100 companies and manages $1.5 billion in capital. "We want someone in a big market, with a management team that has worked together well. The third M is a capital-efficient business model."

Mike Stubler, of Draper Triangle Ventures, added that "One of the great advantages we have in the Midwest is the work ethic of people. It's instilled in what we do. Obviously, we've got an affordable cost of living, and very affordable housing, compared to other parts of the country."

He went on to say that "I think we also have a dedicated workforce. You don't face the employee turnover that you see in coastal areas, where people switch jobs every 18 months or two years. You find dedicated, highly educated people who come to your companies to work and tend to want to stay there. So you try to bring the tempo and buzz from Silicon Valley's start-up ecosystem and match that with our values and work ethic, and it tends to be a nice combination."

Brad Mascho, founder of CrossChx, a Columbus-based healthcare software company with more than 400 hospital customers in 30 states, noted that "The advantage of being based here is we were able to build a company that we never could have at this scale if we were trying to do it with some of the cost and other burdens of the coasts." The four-year-old company has raised $40 million, with Columbus-based Drive Capital as its initial investor.

Drive Capital's Andy Jenks, himself a former serial entrepreneur, explained that "Most companies' customers are based here in the Midwest. It used to be that you had to be based in San Francisco or Silicon Valley to build a tech business, because that's where the people were, that's where the knowledge was, that's where all the infrastructure was." But with advent of low-cost cloud computing and the proliferation of software engineering degrees—"Ohio State graduates somewhere in the neighborhood of 1,200 computer science majors every single year," he noted, the Midwest is an appealing place to locate.

"If you stack all of that up and say, 'Where is the best place to be?' well, it's in the backyard of your customer."

More information:

Webcast from the Meeting:

Click on the image below to view the video.

Video Webcast from Recent Meeting

Webcasts produced by Tom Kondilas.

OVA's Video Archive is Online:

OVA is pleased to offer an archive of program videos to its website. You'll find the full video record of most OVA formal programs since 2008 at www.ohioventure.org/events/video-archives/.

Upcoming Meeting Dates:

  • June 28, 2016
    2016 Venture of the Year Award
 

See complete details and registration for these events.

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