JumpStart Community 2009

REALIZING OUR FUTURE STORIES OF ICONS, INNOVATORS & IMPACT

2009 COMMUNITY REPORT

“JumpStart Inc. represents the best and brightest in 21st century economic development.”

–U.S. Commerce Secretary Gary Locke

Table of Contents

1

Message to Our Community

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The Path of Icons & Innovators

3

Stories of Icons

6

Stories of Innovators

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14 Recognizing Our Donors

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JumpStart’s Impact

Realizing Our Future

Message To Our Community This year, JumpStart is celebrating the entrepreneurial

# Reaching more than 5,000 community members and

icons and innovators of our region. We are inspired by

entrepreneurs to tell them about JumpStart and Northeast

these visionaries who take an idea and with the right tools,

Ohio’s robust entrepreneurial ecosystem while building the

transform it into a company that brings wealth and prosperity

skills of more than 275 entrepreneurs with JumpStart’s own

to an entire community. These are the people who have

educational seminars.

generated prosperity for Northeast Ohio in the past, and are in the process of realizing the region’s economic future.

# Creating over $75 million in economic impact in the region, including generating tax revenue of $8.3 million to the

In this report, we tell the stories of Charles Brush, B.F.

federal and state government. This revenue is almost equal

Goodrich, and Ray Kralovic, all of whom had the vision

to JumpStart’s annual budget, including funds for direct

to create companies that generated billions of dollars in

investments.

revenues and employed hundreds of thousands of people.

The region hasn’t had enough people with the vision, the

# Rebranding our services to make ourselves more accessible

persistence, and the leadership of these entrepreneurs.

to more entrepreneurs by adding JumpStart TechLift

That is why JumpStart was created: to increase the number

Advisors and JumpStart Inclusion Advisors (and the related

of entrepreneurs able to turn a disruptive idea into an

395 entrepreneurs these teams support) to our portfolio of

impactful company, ultimately generating economic

programs.

prosperity and wealth for all the region’s citizens. # Raising over $10 million to support the operations and Today, we are working with a new collection of entrepreneurial

investments of JumpStart.

innovators. If history repeats itself, some of these individuals will help realize the transformation of our region’s

We are proud of these accomplishments, but it is the progress

economy once again. These entrepreneurs are following

of the entrepreneurs we support that makes our work come

the same paths to growth as the entrepreneurial icons of

to life. Read the historical stories and be inspired by what

the past, including raising capital, obtaining mentorship,

entrepreneurs have accomplished, with the right tools.

and accessing talent. But today’s entrepreneurs have one

More importantly, consider how the current innovators are

additional advantage: the support of a community which

in the process of creating our region’s economic future.

has created a robust entrepreneurial ecosystem, led by JumpStart, to provide them with capital and assistance.

We continue to be extremely grateful to JumpStart’s donor community. Thank you for your support of our work and of

JumpStart’s work in guiding companies led the Economic

our region’s entrepreneurial innovators.

Development Administration to recognize JumpStart as a recipient of the 2009 Excellence in Urban and Suburban Economic Development Award. JumpStart’s other accomplishments this year (ending June 30, 2009) include: # Supporting over 400 entrepreneurs with thousands of hours of free technical assistance and investing over $3.5

Photo crediT Diann Mistelske

million in ten companies via JumpStart Ventures. # Assisting the JumpStart Ventures portfolio of companies in raising over $23 million in follow-on capital, and the JumpStart TechLift Advisors clients in raising $15 million, in a year with almost unprecedented challenges in fundraising.

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Ray T. Leach

Douglas L. Weintraub

Chief Executive Officer

Chairman 1

THE PATH OF ICONS & INNOVATORS The paths entrepreneurs take as they build a company are similar, whether they started a business 100 years ago or start one today.

The entrepreneurial icons from Northeast Ohio’s past led their companies down this high growth path and created organizations that have continued to grow for decades. The innovators JumpStart is working with today are on the same path and will continue to follow that path as they realize their potential.

In the pages that follow, we tell the stories of both the icons of our past and the innovators realizing our economic future. In addition to telling these stories, we are using a chart to represent the growth path they are following. The stages in the path are from Ohio Third Frontier, one of JumpStart’s biggest supporters, and outline the different stages of growth and activities in each stage. Although each entrepreneur’s journey is slightly different, the general path is the same.

STAGES: n IMAGINING (I): Idea and business model are conceptual. n Incubating (IN): Technology and business model are in development, but products are not yet for sale. This can include preclinical trials. n Demonstrating (D): Prototype technology is completed and sales orders can be taken. Clinical trials and FDA approval occur. n Market Entry (ME): Product or technology is being sold and revenue model is determined. n Growth & Sustainability (G&S): Company is an established and growing business, with a plan to increase market share, revenue, and profits.

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Photo credits Charles Brush: Copy of an original in the Special Collections Research Center, Kelvin Smith Library, Case Western Reserve University, Cleveland, Ohio. Arc Lamp: Permission for use courtesy of Cleveland Public Library Photograph Collection.

ICON

Charles Brush | Brush Electric Company Charles Brush, the man credited with inventing the street

George was impressed and invested, and with this vote of

light as we know it, was a lifelong innovator. He innovated

confidence, Charles was able to raise additional money from

throughout his life, from age 12, when he made his own

the Telegraph Supply Company. George’s company also

static electricity machine out of household items, to nearly

offered technical assistance in developing, manufacturing,

30 years later, when he built the world’s first automatically

and marketing the dynamo. With the capital and

operated wind turbine to power his home. Today, Charles

assistance, Charles filed his first of 50 patents and continued to develop the arc lamp. His

plays as a global innovator in energy creation.

And the growth continues:

let the arc lamp operate reliably and efficiently

Charles quit his job selling iron ore in 1877 to work

2009: 300,000 employees worldwide 2009: $183 billion in sales

amount of fuel in the lamp, allowing it to run

Brush’s legacy is cemented in the role General Electric

on his idea for a dynamo electric engine and a powered arc lamp. At that time he looked to a childhood friend for capital. George Stockly, Vice President of Cleveland’s Telegraph Supply Company, heard from his

1880: Reorganizes company to form Brush Electric Company

own company directors that electric lighting was “a field without a future.” But 1877: Receives investment and guidance from childhood friend George Stockly

1876: Charles completes dynamo design improvements on paper 1877: Works full time to develop dynamo and electric arc lamp

1878: Gains endorsement from The Franklin Institute

1891: Merges with Edison General Electric Company to become General Electric Co.

without supervision, and led to increasing the all night without maintenance. Two years after giving up his day job, Charles unveiled his

arc lamp system at what is now Cleveland’s Public Square.

According to The Plain Dealer, twelve lamps simultaneously lit the square as thousands watched in amazement.

By 1883, the systems were across the country from Boston to New York to San Francisco, the company’s revenues

1883: $2 million in revenue

1879: Unveils electric lighting system on Cleveland’s Public Square

research led to the ring clutch, an innovation that

reached $2 million, and it had a workforce of 400 associates.

By 1891, the company had merged with its top competitor,

1883: 400 employees

Thomson-Houston Electric Company, and then again with Thomas Edison’s company to form General Electric.

The mergers created the GE we know today, which has over 300,000 employees with revenues of $183 billion, and remains at the forefront of energy creation.

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Dr. Benjamin Franklin Goodrich | B.F. Goodrich Company

ICON

develop an extensive research department and allow B.F. to invent many of the company’s initial rubber products, laid the foundation for innovation in rubber for the next century.

Out of the Goodrich research facility came innovations

Akron, Ohio would never have

that put rubber tires on

been dubbed the “Rubber Capital

automobiles, equipped every

of the World” if it weren’t for

U.S. World War I plane with

Dr. Benjamin Franklin

aircraft tires, provided airplanes

(B.F.) Goodrich. With an

with de-icers, and put Alan

entrepreneurial mindset and a

Sheppard in a spacesuit. The

vision for the future, B.F. brought

effect the B.F. Goodrich Company

his small, innovative rubber company

had on the city of Akron as one of the

to Akron and laid the foundation for an

largest tire and rubber manufacturers

international organization that would introduce

in the world was transformational;

the world’s first car tire, aircraft tire, and spacesuit.

Akron became the “Rubber Capital of the World” as additional industry leaders such

B.F., a physician and inventor, invested in a small New

as Goodyear and Firestone came to the city. The B.F.

York-based rubber company in 1869 with his business

Goodrich Company eclipsed the million dollar

partner John P. Morris. He used his investment to pursue

sales mark in 1892, reaching $1.4 million and

his passion for inventing, but struggled to get the company

employing 400 people. Its sales numbers

going in New York. Familiar with Ohio after attending

continued to climb in the 20th century

what is now CWRU School of Medicine, B.F. was inspired

and as the Goodrich Corporation

by the financial incentives the city leaders of Akron were

today, the company employs over

offering for manufacturing companies to relocate to the

25,000 and is continuing its

city. In 1870, seven prominent Akron citizens invested

legacy of innovation.

With various follow-on funding investments throughout the 1870s, B.F. added qualified, experienced business leaders to his company. One of those individuals was George W. Crouse, who made an angel investment in 1878

1870: Relocates company to Akron after $13,600 investment from Akron civic community leaders

1869: B.F. invests in NY rubber company

1878: Secures angel investment and guidance from George Crouse who becomes VP

and put his finance and business background to work as Vice President. George’s funds, which were used to I

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1890s: Introduces pneumatic tire and experiences rapid sales growth

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1880: 55 full-time employees

1897: Winton Car Company uses and markets the pneumatic tire

1949: Produces first passenger car tire containing synthetic rubber 2008: $7 billion in sales 2008: Over 25,000 employees worldwide

Photo credits Permission for use courtesy of University of Akron University Libraries Archival Services.

today), which secured the company’s location in Akron.

1892: $1.4 million in sales 1888: $696,000 in sales

1880: $100,000 stock issued

$13,600 in the company (the equivalent of $250,000

1892: 400 associates

And the growth continues:

1880s: Applies solidband tire technology to bicycles

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ICON

Dr. Raymond Kralovic | STERIS Corporation

Microbiologist Raymond Kralovic, Ph.D.,

McDonald and Company, Invacare, Ameritrust,

had an idea. He thought he could develop

and other Cleveland area investors in 1987.

Photo credits Ray Kralovic: Courtesy of Ray Kralovic. System 1®: Photo provided courtesy of STERIS Corporation.

an improved process that would sterilize the small, sensitive, and complex instruments

Within three years of the venture

used for minimally invasive surgery.

round, STERIS began international shipping of SYSTEM 1 and a couple

The passion he had for this one

years later it made an initial public

innovative solution helped define

offering with revenues over $45

Northeast Ohio as a center for

And the growth continues:

million and employment at 200. The

medical technologies and devices.

company’s innovation didn’t stop with Over 25 years ago, Ray proposed the idea to his employer, an established leader in infection control equipment. His

patents and 626 foreign patents, with another 96

employer however, thought the innovation was too radical

U.S. and 374 foreign patents pending. Its revenues

and a risky investment. After being refused R&D funding for

reached the $1 billion mark five years ago and

two years, Ray left his job and partnered with Ed Schneider,

today STERIS employs 5,000 people with

a medical engineer and entrepreneur, to work on the idea.

representation in more than 60 countries.

With his first external investment in 1985, Ray completed the

It remains the preeminent prevention,

prototype of the SYSTEM 1 Sterile Processing System and

decontamination, and surgical

filed his first patent. The Mentor-based company received

technology company in

follow-on funding from the State of Ohio in 1986 and Ray

the world.

®

began to validate the product’s marketability. To continue

1987: Receives Primus investment and guidance from Bill Sanford who becomes President

development, he contacted Primus Venture Partners, a Cleveland-based private equity partnership. The fund put Ray in contact with Bill Sanford, President of Symark Associates and a healthcare consultant with a history of buying and selling medical technologies. Ray won Bill’s buyin, brought him in as President of the company, and received

1998: Moves to NYSE

Ray’s idea, as STERIS holds 280 U.S.

1983: Ray’s employer denies request to fund sterilization idea 1985: Moves to Mentor and founds STERIS with Ed Schneider 1985: Secures funding

1990: Begins international shipments

2004: $1 billion in sales

1992: IPO on Nasdaq 1988: Manufactures and ships first product

1988: Completes regulatory reviews and receives market clearance

1992: 200 employees

a venture capital investment of $1.2 million from Primus, I

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From the icons of our past to the innovators who are realizing our future.

“JumpStart has been critical to Juventas’ development. By leading our initial seed round and providing ongoing support, they are playing a vital role in transferring our technology from the laboratory to the successful treatment of human disease.”

Dr. Rahul Aras | Juventas Therapeutics A JumpStart Ventures portfolio company Dr. Rahul Aras has seen hundreds of biotechnology and pharmaceutical technologies come out of the Cleveland Clinic.

2008: Completes product formulation and initiates FDA-guided preclinical animal studies

As the former Director of Life Science Commercialization at Cleveland Clinic Innovations, he was responsible for licensing

2008: Raises nearly $7 million in Series A investment

dozens of technologies to industry partners, including the two largest biotechnology deals in Cleveland Clinic history. Of those technologies, Rahul is most excited about the one he is now working to commercialize through Juventas Therapeutics, a

2007: Rahul launches Juventas Therapeutics with Dr. Marc Penn and Cleveland Clinic

2009: Secures $800,000 from Ohio Center for Stem Cell & Regenerative Medicine

2007: Raises $750,000 institutional investment round led by JumpStart

Cleveland Clinic spin-off company he helped create in 2007.

Juventas Therapeutics is developing novel regenerative therapies for cardiovascular disease discovered by Dr. Marc Penn, a

2009: Submits Investigational New Drug application to FDA for first product

2007: Secures $1 million through Ohio Global Cardiovascular Innovation Center

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Cleveland Clinic cardiologist. Rahul introduced Juventas to JumpStart Ventures while working to close an initial funding

of its development milestones and demonstrated pre-clinical

round that would fund early product formulation and pre-

proof of concept for its lead product. During this time, Rahul

clinical animal studies. JumpStart Ventures led the financing,

continued to work with a JumpStart Venture Partner, executing

which closed in July 2007, and included investment from North

a follow-on funding strategy necessary to complete additional

Coast Angel Fund, Blue Chip Ventures,

INNOVATOR

FDA-guided animal studies and a Phase I clinical trial.

and several local angel investors. Within one year of funding, Juventas reached all

Juventas closed a Series A venture round in October 2008, led by Cincinnati-based Triathlon Medical Ventures and including investment from Early Stage Partners, Fletcher Spaght Ventures, and Reservoir Venture Partners, as well as every investor from the initial funding round. Since his initial meeting with JumpStart, Rahul has raised nearly $10 million in funding, including $1 million from the Global Cardiovascular Innovation Center and $800,000 from the Ohio Center for Stem Cell & Regenerative Medicine, and is transitioning human trial will position the company to raise additional funds, which will be used to further develop its lead product and expand into other clinical disease states. “JumpStart has been critical to Juventas’ development. By leading our initial seed round and providing ongoing support, they are playing a vital role in transferring our technology from the laboratory to the successful treatment of human disease.”

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Photo crediT Lauren Parsells

Juventas into its Phase I clinical trial. Completion of this

INNOVATOR

“The region has a tremendous asset in JumpStart, which helped us immensely initially, and continues to support us even after we have ‘graduated.’ The region’s other assets have made it very easy for me to attract talented people from other places.”

Dr. Kevin Berner | Logos Energy A JumpStart Ventures portfolio company DR. Kevin Berner introduced the world to a new alternative

Because of his company’s funding progress, Kevin was able to

energy technology in 2005 through Contained Energy. But

assemble a team of 25 full-time associates, many of whom hold

leading the development of one innovation wasn’t enough for the

Ph.D.s in their fields. Positions include research scientists,

former Army Officer and McKinsey Partner, and when Contained

engineers, and project managers, plus an additional 17 seasonal

Energy presented yet another opportunity, he took it on.

interns who are learning from experts in the alternative

Photo crediT Diann Mistelske

energy field. “Growing a renewable energy company in Kevin brought Contained Energy, which produces direct carbon

Northeast Ohio is the ride of a lifetime. The region has

fuel cells that use inexpensive, readily available carbon as

a tremendous asset in JumpStart, which helped us

fuel, to JumpStart Ventures in July 2006. Alongside another

immensely initially, and continues to support us

engineer, Kevin worked with a JumpStart Venture Partner to

even after we have ‘graduated.’ The region’s other

set aggressive technical, fundraising, business development,

assets have made it very easy for me to attract

and hiring milestones. During their development, Kevin

talented people from other places. The

found tangential intellectual property that sparked the launch

excitement of a clean energy startup, in

of Phycal, which develops and commercializes systems for

an area with a low cost of living and

growing algae and harvesting commercially viable energy

tremendous cultural assets,

products from the biomass. Contained Energy and newly-

is a very attractive

formed Phycal both became subsidiaries of a new parent

package.”

company, Logos Energy. As a JumpStart Ventures client,

2007: Raises angel investment and grant money

Kevin has been successful in his fundraising efforts. Logos

2008: Raises additional angel investment and grant money

Energy has raised nearly $8 million in additional investment for the two operating companies and levered that funding with an additional $5 million in development contracts from the Ohio Department of Development, the U.S. Army, the U.S. Air Force, and the National Science Foundation.

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2008: Creates holding company Logos Energy and subsidiary Phycal

2005: Kevin licenses fuel cell technology and starts Contained Energy

2009: 42 employees and interns

2006: Secures funding and guidance from JumpStart

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“We were able to land our beta customer in large part because of our partnership with JumpStart TechLift Advisors. They are well connected in the technology field and got us in touch with the right people.”

John Collier | M.O.M. Tools A JumpStart Inclusion Advisors and JumpStart TechLift Advisors client

2009: Starts commercial test with Fortune 500 beta customer

John Collier is ready to revolutionize the metal fabrication industry. After perfecting and patenting the design of its punch tool, M.O.M. Tools is taking on the $30 billion worldwide market.

Prior to 2008: John patents idea for tool and founds M.O.M. Tools

The design of John’s dual head punch tool incorporates an angular groove that acts as a second punch head, resulting in less breakage of the metal (maintaining the integrity of

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the entire metal piece) and a cleaner hole than today’s punch

2009: Completes beta test with successful results

2008: Works with JumpStart to secure beta customer

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tools, all at a lower cost. As he began his search for a beta an extensive beta test and in early 2009 connected with and

customer in January 2009, John connected with JumpStart Inclusion Advisors for guidance in forming

secured a Fortune 500 industry leader as its first beta customer.

the company’s assessment guidelines. Out

John also looked to JumpStart TechLift Advisors for metals

of that partnership, M.O.M. Tools developed

expertise while developing the test site. “We were able to land our beta customer in large part because of our partnership with JumpStart TechLift Advisors.

They are well connected in the technology field

INNOVATOR

and got us in touch with the right people.”

Completed in the summer of 2009, the beta test’s results provided John with a Six Sigma validation of the tool’s ability to provide manufacturers with higher productivity at a lower cost. M.O.M. Tools, along with Entrepreneurs-in-Residence at JumpStart Inclusion Advisors and JumpStart TechLift Advisors, is now developing a strategic customer’s entire plant with an extended plan to introduce it to the company’s sister plants around the world. With a first customer and continued sales he expects based on the validated beta test, John projects the company’s revenue to exceed $1 million by the second year of implementation.

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plan to roll out its dual head punch throughout its

INNOVATOR

Doug Hardman | SparkBase A JumpStart TechLift Advisors client

Doug Hardman had a vision for his software tool. Based on his expertise and past experience in software development, Doug believed he had developed a network that introduced modern technology to the gift and loyalty card processing industry, which had been dominated by antiquated systems and thinking.

What Doug lacked was the resources he needed to add additional features to the system and get the word out to the rest of the industry.

Doug connected with JumpStart

“JumpStart’s team helped fill a gap that allowed us to grow much more quickly.

Without the help of my Entrepreneurin-Residence, I’d still be thinking of my vision instead of making it happen.”

With the new funding, Doug made significant progress against key milestones, receiving an additional $500,000 in funding, tripling the size of his team, and completing the 3.0 version of the SparkBase software. This version incorporates an SMS Gift Card Portal that connects to more than two million card holders – all of whom will be using the SparkBase network when they cash in their cards – and allows merchants to connect with their customers instantly. SparkBase’s client base has also tripled in just six months and Doug recently signed a $125,000 deal to develop a whole new platform tailored to one customer. “JumpStart’s team helped fill a gap that allowed us to the help of my Entrepreneur-inResidence, I’d still be thinking

TechLift Advisors in January 2007

of my vision instead of

and began to finalize the company’s

making it happen.”

Photo crediT Lauren Parsells

business plan and perfect his investor 2007: Works with JumpStart to develop business plan and investor presentation

presentation. With the technical assistance and connections provided by JumpStart TechLift Advisors, Doug secured a loan from Cuyahoga County’s North Coast Opportunities Technology Fund (NCOF) in October 2008. This infusion of development capital paved the way for a Series A round by Blue Olive Partners to ensure proper staffing and marketing of SparkBase.

Prior to 2006: Doug begins development of SparkBase

2009: Raises Series A and additional angel funding and completes new product development

2008: Secures funding from Cuyahoga County’s NCOF

2006: Doug becomes CEO of SparkBase

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2009: Increases customer base by 400%

grow much more quickly. Without

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“Eight jobs might not seem like a lot, but that’s just the beginning. I am expecting to grow our reseller channel significantly, which will require iGuiders to hire customer service personnel and marketing professionals to support our growth strategy.”

INNOVATOR

Jodi Marchewitz | iGuiders A JumpStart TechLift Advisors client that became a JumpStart Ventures portfolio company Jodi Marchewitz knows there is over a $25 billion

In order to achieve these and future milestones, Jodi has

market out there for her company. She identified the need

developed a capital efficient hiring plan that meets the

to create easier and more productive Internet searches in

company’s growth and investment needs. So far, Jodi has

early 2007 and had the skills to develop a new technology

created eight positions within the company. Aside from herself,

solution based on expertise gleaned from senior roles at

iGuiders now employs two web developers, a marketing director,

Rockwell Automation. Now Jodi is leading iGuiders into a

and a marketing associate, as well as a contract sales director,

new market and hoping to align her company with search

a part-time web developer, and a part-time chief technology

engine powerhouses like Google, Yahoo!, and Microsoft.

officer. “Eight jobs might not seem like a lot, but that’s just the beginning. I am expecting to grow our reseller channel

The iGuiders team consisted of Jodi and one contractor when

significantly, which will require iGuiders to hire customer

she began developing the prototype and looking for technical

service personnel and marketing professionals to

support and investment. iGuiders’ patent-pending online

support our growth strategy. I also expect to add

decision technology, called Guiders, helps Internet users quickly

additional developers to create advances in our

identify what they want, leads them to the exact information

search and decision technology and lead-

they need, and guides them to make decisions faster. Upon

generation platform.” Jodi’s expanded

receiving funding from the Civic Innovation Lab and Flashline

team is anticipating dramatic revenue

Partners, Jodi looked to JumpStart TechLift Advisors in

generation in the next

August 2008 to build a strategy that would lead to funding to

few years.

investor presentation and assisting with market validation,

2009: Secures funding and guidance from JumpStart

Jodi’s TechLift Advisors Entrepreneur-in-Residence brought iGuiders to JumpStart Ventures. Jodi moved her company

2009: Launches Guiders platform

into the Beachwood Business Development Center just prior to receiving a JumpStart Ventures investment in February 2009.

2007: Jodi identifies need for iGuiders

With ongoing coaching from a JumpStart Venture Partner,

2007: Raises friends and family capital

Jodi refined her operating strategies, initiated beta testing, and launched her lead-generation platform in June 2009.

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2009: 8 employees

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Photo crediT Lauren Parsells

continue product development. After helping to finalize her

INNOVATOR

Mark Woodka | BSKLive A JumpStart TechLift Advisors client that became a JumpStart Ventures portfolio company Mark Woodka has a successful entrepreneurial past.

funding, Mark completed development of the software and

His first software startup became the sales arm for TMW

began to expand his sales and marketing efforts. He knew the

Systems, a software company he helped grow from $1

company needed additional funding to penetrate the initial

million to $20 million in revenue. From there Mark became

target market of healthcare, so Mark began working with his

Vice President of Sales at Flashline, an early-stage software

JumpStart Venture Partner to increase the company’s visibility

company that was eventually sold to BEA Systems. Now

among angel and venture capital investors and effectively

Mark is Chief Executive Officer of BSKLive, another software

articulate the product’s strength and market potential.

startup reaping the benefits of his successful past.

BSKLive’s flagship product, StaffKnex, is a web-based application that manages employee scheduling and staffing for companies with shift-based workforces. After presenting at JumpStart TechLift Advisor’s First Pitch, Mark secured a JumpStart Ventures investment in January 2009 alongside an angel investment from North Coast Angel Fund. “The

Photo crediT Lauren Parsells

process of going through JumpStart is very similar to the fundraising process, which I’ve gone through before. It’s tremendously

“The process of going through JumpStart is very similar to the fundraising process, which I’ve gone through before.

It’s tremendously helpful for entrepreneurs because it prepares them for the follow-on rounds of funding that most businesses will need in order to grow.”

By the end of fall 2009, BSKLive expects to attract another equity investor in the range of $1 to $1.3 million. The company continues to secure new customers in the healthcare market, with each customer’s cost savings averaging $50,000 to $100,000 per year. This is expected to set the company on a course to capture a substantial portion of all companies employing shift-based workers, including those beyond healthcare. This market

2009: Expands implementations and proves sales repeatability

represents 40 percent of the U.S. workforce, which the team calculates to be valued 2009: Secures beta clients and prepares to scale sales

at over $2 billion.

2008: Mark becomes CEO of BSKLive 2009: Secures funding and guidance from JumpStart

Prior to 2008: Mark sees potential in BSKLive’s product

2009: Beta clients validate value proposition

2009: Completes next stage of software development

helpful for entrepreneurs because it prepares them for the follow-on rounds of funding that most businesses will need in order to grow.” With the I

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JUMPSTART’S IMPACT

JumpStart’s work since 2004 has created impact not just with the entrepreneurs and their companies, but within the Northeast Ohio economy as well. Our impact includes reaching entrepreneurs and investing in companies, helping our clients identify and secure external funds for growth, and creating jobs and rippletype impact in the region.

Impact | On Company Growth Inception through June 30, 2009

JumpStart Ventures Investing

$14.37 million through 51 investments in 39 companies, of

Impact | On Entrepreneurs

which 12 are woman or minority-owned or led

Inception through June 30, 2009 Creating the connections for Reaching

30,140 members of the entrepreneurial community (6,030 of whom are diverse) to introduce the services of JumpStart

portfolio companies to raise an additional

$74.2 million

in external funding (excluding JumpStart funding) – a 5:1 leverage ratio of JumpStart’s investment

Reviewing

6,620

JumpStart Inclusion Advisors

business overviews from entrepreneurs

Advising 25 client companies,

(1,125 from diverse entrepreneurs)

of which some are JumpStart Ventures portfolio companies and have raised

Providing over

67,650

$23.3 million in external funding

hours of free assistance to entrepreneurs

JumpStart TechLift Advisors Connecting

3,500

entrepreneurs with investors, business mentors and service providers through IdeaCrossing, the online resource

Advising

370 client companies, which have raised

$19.1 million in external funding

12

R E A L I Z I N G O U R F U T U R E : S T O R I E S O F I C O N S , I N N O V AT O R S & I M P A C T

Impact | On Northeast Ohio’s Economy Economic impact over the past three years totaling

$175 million, including $76 million in Northeast Ohio in 2008, as reported by Cleveland State University – a 29 percent increase from JumpStart’s 2007 impact of $59 million JumpStart’s 2008 impact included

$8.3 million in taxes generated – almost equal to JumpStart’s annual budget, including funds for direct investments

$20.9 million in household income generated in 2008

502

jobs created (direct and indirect)

Portfolio and Client Company Highlights The portfolio and client companies with which JumpStart works have had tremendous accomplishments.

(Inception through 6/30/09) Here are some highlights: Recognized in the Top 10 in their fields • Embrace Pet Insurance No. 2 pet insurance company according to PetInsuranceReview.com • InSeT Systems Top 10 technology of 2008 by Popular Science • STACK Media Top 10 most visited sports website in the country according to comScore Media Metrix • Synapse Biomedical Top 10 medical innovation for 2009 by the Cleveland Clinic Recognized as leaders in their industries • Great Lakes Pharmaceuticals “One of the more exciting technologies we have seen” according to the National Institutes of Health • PreEmptive Solutions “A company to watch” according to one of the leading consultants in their field • Tremont Electric One of “America’s Most Promising Startups” according to BusinessWeek Recognized by national media • CardioInsight Technologies graced the cover of Heart Rhythm magazine

Impact | Recognized JumpStart was the national recipient of the

2009 Excellence in Urban or Suburban Economic Development Award from the Economic Development Administration

• CardioInsight Technologies, CerviLenz, and Synapse Biomedical highlighted in The New York Times • Embrace Pet Insurance and PreEmptive Solutions featured in Entrepreneur magazine • iCubed International’s microwave featured on ABC’s The View • InSeT Systems featured in Inc. magazine • MAR Systems featured in Black Enterprise magazine • PreEmptive Solutions noted in USA Today

JumpStart is the 15th most active early-stage investor nationally according to Entrepreneur magazine and has been featured in The

Wall Street Journal, The New York Times, USA Today,

and The Chronicle

of Philanthropy,

with over 1,000 cumulative media placements IdeaCrossing was recognized with the

Dominion Foundation Community Impact Award and the Oberlin Research Group Award for Best Single Innovation

J U M P S TA R T 2 0 0 9 C O M M U N I T Y R E P O R T

• reXorce Thermionics featured in The Wall Street Journal • Synapse Biomedical featured on Forbes.com • Wireless Environment highlighted in VentureBeat Secured 94 patents with another 87 in process (JumpStart Ventures portfolio companies alone) Secured partnerships with global leaders — Microsoft, Sears, FedEx, Novelis, Marriott, and Lloyd’s of London, among others Hired 269 employees (JumpStart Ventures portfolio companies alone) Raised $134 million in external funding (not including JumpStart Ventures investments) 13

RECOGNIZING OUR DONORS JumpStart is only able to accelerate the vision of the region’s entrepreneurs and the growth of their companies because of the generous support of our philanthropic partners. It is because of their commitment to our region’s current and future entrepreneurial economy that we are collectively on the path to realizing a more prosperous future for Northeast Ohioans.

Leadership Donors JumpStart especially recognizes the leadership and support of Ohio Third Frontier, a program of the State of Ohio. Ohio Third Frontier, which catalyzes the innovation that is transforming Ohio’s economy, has dramatically improved the entrepreneurial ecosystem across Ohio. JumpStart’s accomplishments manifest the vision of the leaders of this program.

The Burton D. Morgan Foundation

The FirstEnergy Foundation

The mission of the Burton D. Morgan

vitality of 26 U.S. communities where the Knight brothers owned newspapers.

Foundation is to strengthen the free

Forest City Enterprises

enterprise system by investing in

Charitable Foundation, Inc.

The National City Corporation Charitable Foundation,

organizations and institutions that foster The Fund for Our

now PNC Foundation

Economic Future

The PNC Foundation actively supports

The Cleveland Foundation

The Fund for Our Economic Future

organizations that provide services for the

The Cleveland Foundation improves

unites philanthropy in Northeast Ohio

benefit of the community, especially those

the lives of Greater Clevelanders now

to strengthen the region’s economic

services that assist in the development of

and for generations to come by building

competitiveness through grant making,

preschool children for success in school

community endowment, addressing needs

research and civic engagement.

and life. The PNC Foundation receives its

the entrepreneurial spirit.

through grant making, and providing leadership on vital issues.

principal funding from The PNC Financial Greater Cleveland

Services Group (NYSE: PNC).

Partnership COSE

As an association of business members, the The Donald and Alice Noble

COSE is Northeast Ohio’s largest small

Greater Cleveland Partnership mobilizes

business support organization and

private-sector leadership, expertise, and

provides cost-effective group purchasing

resources to create jobs and leverage

Ohio Third Frontier

programs, advocacy on legislative and

investment to improve the economic

Ohio Third Frontier catalyzes innovation

regulatory issues, and networking

vitality of the region.

that is transforming Ohio’s economy

and educational resource to help the

for future generations by creating

region’s small businesses maintain their

KeyBank Foundation

new technology-based products,

independence and grow.

The objective of the KeyBank Foundation

companies, industries, and jobs. It has

is to improve the quality of life and

four major pillars: to bring industry

The Economic Development

economic vibrancy of the places where our

and academia together to accelerate the

Administration, a division of the

customers, employees, and shareholders

development of new innovations and

U.S. Department of Commerce

live and work.

breakthrough technologies, to create

The Economic Development

14

Foundation

new opportunities for Ohioans, to build

Administration’s mission is to lead

The John S. and

sustainable and competitive industries,

the federal economic development

James L. Knight

and to build new businesses and invest in

agenda by promoting innovation and

Foundation

entrepreneurialism.

competitiveness, preparing American

The John S. and James L. Knight

regions for growth and success in the

Foundation promotes excellence in

worldwide economy.

journalism worldwide and invests in the

R E A L I Z I N G O U R F U T U R E : S T O R I E S O F I C O N S , I N N O V AT O R S & I M P A C T

SOURCES & Uses to Date July 1, 2004 Through June 30, 2009 All figures are in millions

Sources of Funds – investments 6%

Donor Community

l State of Ohio l Foundations l Corporations

30%

JumpStart’s unique public-private partnership reflects

64%

the commitment to the growth of entrepreneurship in this region shared by the Northeast Ohio civic, business, and foundation communities with the State of Ohio and the Economic Development Administration.

State of Ohio

$9.2

64%

Thank you to all the members of our unique donor

Foundations

$4.3

30%

community who make the work of JumpStart happen.

Corporations

$0.9

$14.4

6% 100%

Civic, Business, and Individual Donors Baker Hostetler

Sources of Funds – Operations

Calfee, Halter and Griswold

5%

Dix & Eaton Dollar Bank

20%

l l l l l

31%

Ernst & Young Fifth Third Bank

38%

6%

Huntington National Bank

State of Ohio Federal Government Foundations Corporations Individual & Prog. Fees

Jones Day 100% of JumpStart’s Associates

State of Ohio

$6.6

100% of JumpStart’s Board of Directors

Federal Government

$1.3

6%

Foundations

$8.0

38%

Corporations

$4.3

20%

STERIS Corporation

Individuals & Program Fees

$1.0

5%

The William & Pamela Summers Family

$21.2

The David and Lindsay Morgenthaler Foundation Oberlin Research Group Squire, Sanders & Dempsey

31%

100%

Thompson Hine

Foundation Donors

uses of funds

The Charter One Foundation

10%

The Kathryn and Lee Chilcote Foundation

12% 40%

The George W. Codrington Foundation The Dominion Foundation

37%

The Eaton Charitable Fund

l l l l

Investments Ventures/TechLift/Inclusion Marketing/IdeaCrossing General Admin/Fundraising

The GAR Foundation The Ewing Marion Kauffman Foundation

Investments

$14.4

41%

The Fred A. Lennon Charitable Trust

Ventures/ TechLift/Inclusion $13.2

37%

Marketing/ IdeaCrossing

$4.3

12%

General Admin/ Fundraising

$3.7

$35.6

The Lincoln Electric Foundation The Nord Family Foundation The Parker Hannifin Foundation The Raymond John Wean Foundation

J U M P S TA R T 2 0 0 9 C O M M U N I T Y R E P O R T

10% 100%

15

realizing our future

to give context to the progress of our current entrepreneurs and the role of JumpStart in helping them along that path. We provide the same critical resources past innovators leveraged to build their successful companies. If history is an indicator of the future, we can have faith that some of these talented individuals, with the support of JumpStart, will be able to achieve the ultimate goal of generating significant wealth and creating thousands of new jobs across Northeast Ohio.

From 1997 to 2007, the 21-county region JumpStart serves lost over 50,000 jobs (-1.7 percent)1 while the rest of the U.S. experienced, on average, an 11.2 percent job growth. To create new jobs to replace these 50,000 lost positions and transform our region’s economy in a time of globalization is going to require tremendous focus and accelerated progress. JumpStart and our supporters believe that accelerating innovative, entrepreneurial companies from our community is one of the most important actions we can take to address this challenge.

How long will the process of transformation take?

There are entrepreneurial icons in the making here whose innovative ideas and high growth companies will create thousands of jobs and lead to regional prosperity.

We can learn from cities within our own region that have experienced similar transformation, such as Akron. Akron’s economy faltered dramatically in the late 1970s and early 1980s with the decline in the rubber industry; more than 10,000 manufacturing jobs were lost in that time2 and declines continued for the next 15 years. The city, under the inspired and determined leadership of Mayor Don Plusquellic, responded consistently with a variety of economic development initiatives, including establishing an incubator to promote entrepreneurship and investing in an Israeli incubator to bring startups to the area. The universities and local companies also consistently increased investment in polymer chemical R&D activities. As a result, while still lagging national performance, Akron’s job growth has been, on average, double the rate of the rest of the region. From 1997 to 2007, Akron experienced job growth of 6.1 percent3 (almost 20,000 jobs), compared to the losses experienced in the entire region. Per capita income growth is also the highest in the region. While Akron’s journey isn’t over, it shows us that support for entrepreneurship and innovation can change a region.

With JumpStart playing a leadership role, we have finished the first chapter of a new story about a

revitalized regional entrepreneurial economy in Northeast Ohio. We are confident that the rest of the story will be about our collective success. There are entrepreneurial icons in the making here whose innovative ideas and high growth companies will create thousands of jobs and lead to prosperity enjoyed by not just Northeast Ohio, but the nation. We remain committed to our mission of providing these entrepreneurs with the resources they will need to accelerate their journey.

Thank you for your commitment to our region’s entrepreneurial economy and its entrepreneurs.

16

1 Economy.com, 1997-2007; 2Economy.com reported by Ledebur and Taylor, “Akron, Ohio: a Restoring Prosperity Case Study”; Metropolitan Policy Program at the Brookings Institution; 3Economy.com, 1997-2007 Special thanks to Dr. Ziona Austrian, Director, Center for Economic Development at the Maxine Goodman Levin College of Urban Affairs of Cleveland State University for providing the regional data.

Photo crediT Lauren Parsells

In this report, we reflect on the historical accomplishments of a few of our region’s entrepreneurial icons

R E A L I Z I N G O U R F U T U R E : S T O R I E S O F I C O N S , I N N O V AT O R S & I M P A C T

These are some of the companies whose innovators are working to realize our future

COUPAD 速

COUPAD 速

Board of Directors Mr. Doug Weintraub, CPA Board Chairperson, JumpStart Inc. Serial Entrepreneur

Mr. Mark Williams Vice Chairperson, JumpStart Inc. Executive Vice President, Corporate and Institutional Bank, PNC

Ms. Jacqueline Acho, Ph.D. President, The Acho Group

Ms. Barbara Brown Principal, BrownFlynn

Ms. Terri Hamilton Brown Opportunity Corridor Project Director, Greater Cleveland Partnership

Ms. Judith Cone Special Assistant to the Chancellor for Innovation and Entrepreneurship, University of North Carolina at Chapel Hill

Mr. Mark Coticchia Vice President for Research and Technology Management, Case Western Reserve University

Mr. Larry Goddard President, The Parkland Group, Inc.

Ms. Bonnie W. Gwin Managing Partner, Heidrick & Struggles

Mr. Peter D. Hancock Vice Chair, KeyCorp

Mr. John W. Harley Co-Founder and Co-President, FirstPower Group LLC

Mr. Jim Hickey President and Founder, Arras Group

Dr. Jagdish D. Kulkarni, M.D. President and CEO, J&J Enterprise

Mr. Ray Leach CEO, JumpStart Inc.

Mr. Rich Lunak President and CEO, Innovation Works

Mr. David M. Powell Vice President, Environmental Affairs and Government Relations, NetJets Inc.

Mr. Chris Schmid Founder and Partner, LuK, Inc. and Tekfor Inc.

Mr. R. Louis Schneeberger Former Partner and Managing Director, Knowledge Investment Partners

Mr. William R. Seelbach Operating Executive, The Riverside Company

Mr. Ken Semelsberger Senior Vice President–Finance and Planning, Eaton Corporation

Dr. Anthony Stallion, M.D., FACS, FAAP

Mr. Steve Walling Chairman and CEO, Plasticolors, Inc.

Mr. David Wilhelm

JumpStart Inc. | 737 Bolivar Road, Suite 3000 | Cleveland, OH 44115 Voice: 216.363.3400 | Fax: 216.363.3401

Founder and Partner, Adena Ventures

Design: Boondock Walker

Staff Surgeon, Cleveland Clinic Children’s Hospital