October 10, 2009

JumpStart celebrates entrepreneurship

AKRON, Ohio -- Milking algae for oil. Insuring the family pet. Regenerating tissue in damaged hearts.

These are concepts driving early-stage companies in Northeast Ohio, whose promise of fast growth has drawn money and guidance from JumpStart Inc.

The regional, venture-development organization celebrated entrepreneurship Friday with 500 business, elected and nonprofit leaders. They attended JumpStart's fifth annual community meeting at the John S. Knight Center in downtown Akron, and applauded as JumpStart Chief Executive Ray Leach accepted a national award recognizing the nonprofit group's economic development efforts.

Since 2004, JumpStart has invested $14.4 million in 39 fledgling companies. Its focus is startups that could reach $35 million to $50 million in sales in five to seven years.

The highest sales level any of its companies have reached so far is about $10 million, Leach said. The new companies have generated just over 500 jobs, with an average salary of $78,000.

That's not a lot of jobs, but Leach emphasized that JumpStart invests in companies that typically start with two to three workers.

JumpStart's focus on companies with fast-growth potential is vital. This region -- starved for jobs and more wealth -- needs as many new companies as possible, as it transitions from a rust belt economy.

Officials with JumpStart's investment arm say they use a data-driven, market research approach in deciding what companies to invest in. One of JumpStart's early investments -- up to $800,000 -- went to Embrace Pet Insurance, which now ranks as the number two company in its field, according to PetInsuranceReview.com.

Juventas Therapeutics is among a number of JumpStart-invested startups spinning out of research from the Cleveland Clinic and Case Western Reserve University. Juventas, approved at up to $300,000 from JumpStart, wants to market a stem-cell therapy that repairs tissue damaged by a heart attack.

JumpStart's Leach identified Phycal, LLC as "one of the most potentially explosive companies" in terms of growth.

JumpStart approved up to $400,000 in 2006 to Logos Energy, parent company of Phycal.

The subsidiary is developing a system to extract oil from algae. It's operations include a small test pond in Highland Heights, where the company uses several trademarked processes to grow and recycle algae that yields oil, which can be converted to biodiesel.

Phycal was among 27 companies displaying their products and service in a "Showcase of Entrepreneurs" at Friday's gathering.

Ceremonies included Leach accepting an award from the U.S. Economic Development Administration. A division of the U.S. Department of Commerce focused on distressed regions, the EDA in June recognized JumpStart as one of the top economic development efforts of its kind in the country.

Senior EDA official Dennis Alvord pointed to JumpStart's $175 million impact on the regional economy in the last three years, estimated in a study done by Cleveland State University's Center for Economic Development.

"It's a truly remarkable achievement," Alvord said.

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