Ikove

“IT’S A TEAM EFFORT, IT’S NOT AN ISOL ATED EFFORT.” SERENDIPITOUS INNOVATION Columbus-based Startup Nursery finds passion in growing innovative companies

Startups. Tech firms. Venture capital. Private equity. Amidst a climate of increased democratization of corporate activity whereby everyday people can have the potential to start the next Google, these terms seem to be constantly floating around. Most people, though, see them as distant concepts whose West Coast origins are far removed from the Midwest. However, the world of innovation has established firm roots in Central Ohio, with several startups and venture capital (VC) firms being founded in the past decade; among those, Ikove Capital has come to garner attention as it has gained major success in its short 5-year history.

Ikove Capital, a venture development company headquartered in Columbus, Ohio, focuses on investing in early stage technologies by partnering with the universities and research institutions that develop them. They essentially work to connect the research and development stages when there is no sellable product with the later stages, at which VC funding is abundant. This early stage that they target,

commonly referred to as the “valley of death,” presents the greatest difficulty to startups as it is rare to attain sufficient funding that covers initial negative cash flows. To connect these ideation and commercialization stages, they invest

both capital and business resources into potential portfolio companies.

“The fundamental benefit of a startup nursery is that we can share professional services throughout the portfolio,” said Rodolfo Bellesi, one of the co-founders of Ikove. “Every aspect of a business is offered to any company of ours from day one. When we launch a company, the company is fully funded and fully staffed.”

Startups in the Midwest face particular difficulty given that the majority of funding sources are concentrated in Silicon Valley and the East Coast. Thus, beyond targeting the gap presented at early stages of entrepreneurial activity, Ikove also targets a geographic segment often overlooked in the innovation sphere.

Bellesi, alongside Flavio Lobato and John D’Orazio, founded the firm in 2014. After receiving his bachelor’s

degree in electrical engineering from the Universidade Federal do Pará in Brazil in 1997, Bellesi then received his master’s from The Ohio State University in 2000. Although he pursued ventures that led him to Boston and then back to Brazil after his education, he received a call from the Ohio State’s Office of Advancement that eventually drew him back to central Ohio. “I wanted to help and to be part of the university more than ever, but I wanted to do this through an investment mechanism,” he explained. “Since they didn’t have that, I created a tool or a process that later became Ikove Capital where I would invest in technology being developed within a university and those technologies could potentially become companies. I would not only invest in the validation of that technology, but I would also create the teams around the technology to launch the company.”

From the inception of the idea, finding institutions to partner with has constituted the basis of the success of the firm. Beyond building a relationship with Ohio State, the firm has worked to create a network of universities throughout the Midwest, the South and the Southeast. In forming these partnerships, Bellesi explains that the first step is always to identify an individual within the institution who believes in capital commercialization. That individual typically serves as a dean or chairman of a particular department or the head of a research center. From there, Ikove engages with the university at multiple levels, expressing the value they can add to those stakeholders. Finally, they conduct a market analysis and technology validation in order to determine the viability of the venture and the funding they can secure for it.

Through such strategic partnerships, the firm has achieved immense growth across its 5-year life. Its portfolio contains 16 companies, one of which was launched in Brazil. It seeks to launch six companies a year through the partnerships, in hopes that its international expansion will encompass Europe in 2020. Although the current valuation of Ikove’s 16 companies stands at 300 million dollars, they are hoping that it will grow to over one billion dollars by the end of 2020. The firm has adopted a relatively broad approach in the scope of ventures that it tackles, allowing it to cover a wide variety of industries. Its portfolio companies range from med-tech firms to Software as a Service (SaaS) platforms. Bellesi cites the interdisciplinary nature of the technology and innovation sphere as justification for such breadth in the portfolio.

“We actually benefit from diversity,” he explained. “Every company we have benefits from another company, from a knowledge perspective, access to technology or access to a key opinion leader or an advisor. Diversity is a key.”

In looking forward, Bellesi affirms that Ikove strives to be the best venture development firm in Ohio in the next couple of years. He points to several obstacles that they have to overcome in order to achieve such a goal. First of all, access to human capital serves as a barrier, given that identifying talent at the same rate as developing the business can be quite cumbersome. Secondly, they have to deal with the difficulty of navigating the early stages of being a young business.

“It’s a new business, so there’s no manual for what we’re doing,” Bellesi said. “You might find a manual for startup studio models or find a model for venture capital, but we’re different. We are operators. We found or co-found 100 percent of our companies, and we’re looking to bring great technology to the market in a way that [positively] impacts ... as much of humankind as possible. The lack of standard for what we’re doing, and the fact that we have to actually create our own operating manual is one of the most difficult aspects of the business.”

Despite the challenges, Bellesi not only champions the successes of the firm, but also the personal learning and growth that the process of founding the firm has granted him. In addition to impacting the central Ohio community with the work of Ikove, he wants to be a role model and source of insight for anyone looking into the technology, business or entrepreneurship fields.

“You need to work well in the community,” Bellesi explained. “It’s a team effort, it’s not an isolated effort. If you have an idea, don’t keep it to yourself. Share it properly. Share it conscientiously. Share it professionally. Bring a team and surround yourself with people who know more than you do in the areas that you need to know.”