Ohio 2010 Venture Capital Outlook: Public-Private Strategy Is Key to Success

COLUMBUS, Ohio, March 16 /PRNewswire/ -- Experts in venture capital and early stage investing say Ohio's 2010 venture capital success is dependent on the combination of public programs such as Ohio Third Frontier, coupled with private venture capital investments throughout the state.

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A recent report issued by the Brookings Institution cites programs such as the Ohio Third Frontier, an unprecedented and bipartisan commitment to create new technology-based products, companies, industries, and jobs, as successful complements to private venture capital funding to encourage innovative start-up companies, entrepreneurship, and business development.

"Ohio has been on the forefront of the public-private approach to building seed and early stage venture capital," said Frank Samuel, one of the principal architects of Ohio Third Frontier and author of the Brookings Institution report titled, "Turning up the Heat: How Venture Capital Can Help Fuel the Economic Transformation of the Great Lakes Region." "This strategy will help leverage the region's substantial resources and promising opportunities for venture capital investing, and in turn, help the region grow, and retain the new businesses and jobs it needs to ensure a more prosperous and secure future. If every state had in place the funding opportunities that Ohio has generated, it would result in greater prosperity for the entire region, as well as for Ohio."  

Samuel credits state programs like Ohio Third Frontier, the Technology Investment Tax Credit, entrepreneurial pre-seed funds, organizations like the Ohio Venture Capital Authority, and the pension-backed Ohio-Midwest Fund for supporting all phases of company development. One example of such success can be found in the Toledo, Ohio-based company Xunlight Corporation (Xunlight).

Xunlight develops, manufactures and markets lightweight, flexible photovoltaic modules that convert sunlight into electricity, and serves as one of many successful examples of Ohio's ability to support the entire funding spectrum. Xunlight's start up success was in part a result of the more than $13 million Research &  Development funding the company received from the US Department of Energy, US Department of Commerce, Ohio Department of Development and Ohio Third Frontier, and the more than $11 million in loans from the State of Ohio to develop its products and manufacturing process. Additionally, the company received more than $40 million in private investments from Emerald Technology Ventures, Trident Capital, NGP Energy Technology Partners, and Rabo Ventures to commercialize its product.

"Companies like Xunlight are an excellent example of how the public and private venture capital pipeline in Ohio can lead to company creation and product commercialization," said John Griffin, director of the Ohio Department of Development's Technology and Innovation Division, which administers the Ohio Third Frontier and the state's technology investment programs. "The program has done a remarkable job of leveraging voter approved bond proceeds and tax credits to attract investment capital for Ohio companies that, in the past, would more than likely have found its way to East and West coast opportunities. Ohio Third Frontier is providing the funding support and development tools to bring new innovation into the marketplace while also creating new business and workforce development opportunities for the state of Ohio."

Since its inception, the Ohio Third Frontier has created, capitalized or attracted more than 500 companies and has created $6.6 billion in economic impact in Ohio, a 9:1 return on investment. In addition to the Ohio Third Frontier, Ohio supports early stage technology companies through its Ohio Venture Capital Authority (OVCA) and Technology Investment Tax Credit programs.

For more information, visit www.OhioThirdFrontier.com.

SOURCE Ohio Business Development Coalition