It took JumpStart five years to get Cleveland national acclaim as a center for entrepreneurship and innovation.
Now the nonprofit venture development organization is working with the Baton Rouge Area Chamber and the Research Park Corp. in an effort to improve the Capital Region’s business climate.
Ray Leach, CEO of JumpStart, spoke at a luncheon meeting at the Louisiana Technology Park on Wednesday, outlining to business and economic development leaders what JumpStart has accomplished.
Terrell Brown, chairman of the RPC, said Leach’s speech was “a peek at what Baton Rouge could be in the future.”
When JumpStart first started to take shape in 2002, Cleveland and northeast Ohio were hurting. For the past 12 years, the region of 4 million people had been ranked at the bottom of Entrepreneur magazine’s list of the 60 largest U.S. cities in terms of new business activity and innovation.
The economy in Cleveland and the surrounding areas was based heavily on old-line manufacturing and the steel industry, Leach said.
“From 1940 to about 2005, if you were an entrepreneur in this region, something was wrong with you,” Leach said. “Why not get a job with a Fortune 500 company? Or if you had a college degree, you could get a job working with a global firm that promised a great income, with not a lot of risk.”
But as manufacturing began to move out of the U.S., those pillars of the local economy began to fold up. Leach said there were 34 Fortune 500 companies in northeast Ohio in 1986. By 2002 there were nine.
“We lost 400,000 jobs over 12 years,” he said.
Local business leaders realized the only way to revitalize the local economy would be by fostering fledgling businesses and encouraging entrepreneurship.
“We had to get really good at helping really young companies,” Leach said. “Firestone and Uniroyal were not coming back.”
By 2009, JumpStart had helped bring in hundreds of millions of dollars from East and West Coast investors to fledging Ohio companies and had set up six seed funds to help local businesses. The organization also garnered national attention for Cleveland as a hub of entrepreneurship, including an article in Parade magazine.
Leach said the key is knitting together groups that want to work together. For example, researchers at universities need to be put in touch with investors who want to help bring big projects to the market. And groups that want to lobby and promote local businesses also need to be drawn in.
The first task of Step One Ventures, the local collaboration between JumpStart and the RPC, is an ION Fund, a for-profit investment that will direct capital to companies that are close to taking new products to the market.
So far, local investors have committed $1.8 million to the ION Fund, and Jeremy Hunnewell, a New Orleans consultant, has been hired to manage the fund.
On April 19, Step One plans to go before the Louisiana Economic Development Corp., the financial arm of the state economic development department, to ask for $1 million in matching funds.
JumpStart is also helping to find a CEO for Step One through a national search.
The goal is to get someone with private-sector experience, who has experience building partnerships with investors and universities, Leach said.
“Over time, we hope Step One is viewed as a great asset and initiator for lots of additional projects and programs that stimulate the growth of really young companies in the Baton Rouge area,” Leach said.