This week marks the final days of Ray Leach's time at JumpStart Inc., the Cleveland-based venture-development organization he helped start in 2003.
Leach, who was JumpStart's founding CEO, is joining Mark Kvamme to form the OHIO Fund — OHIO for Ohio High-Growth Investment Opportunity — with designs on developing an "impact fund" that invests in tech startups, growth-stage companies, investment funds, real estate and private projects that support economic development in the state.
Leach will remain in the Cleveland area. Kvamme, an entrepreneur and venture capitalist who hails from Silicon Valley, is partner emeritus of Drive Capital in Columbus.
At JumpStart, the organization's Evergreen, Focus and Next investment funds are considered impact funds because of their focus on generating financial returns while also creating economic growth in Greater Cleveland and across Ohio.
Startups and small businesses funded and helped by JumpStart supported an estimated $1.2 billion of economic output and 9,433 jobs in 2022, according to the organization's 2022 Economic and Fiscal Impact Report.
Still, growth opportunities remain in Northeast Ohio, as Cleveland's economy continues to grow at a slower rate than its peer cities, including Columbus and Cincinnati.
The Cleveland Business Journal asked Leach to reflect on his journey at JumpStart and how the OHIO Fund might help Greater Cleveland's economy. This interview has been edited for clarity and brevity.
What motivated you to join JumpStart?
Economic transformation was my original aspiration. Over time, I realized that while JumpStart could make an impact on the economy, our portfolio companies and clients could not transform the region's economy over only a couple of decades, particularly because we are focused on very early-stage tech companies and small businesses. It will take more actors in our ecosystem and more time to realize the economic transformation we seek.
If JumpStart Ventures [JumpStart's for-profit venture capital division] invested another $100 million in the next four or five years, it would create a significant economic impact and generate great investment returns. Yet, more investment is needed to transform the entrepreneurial ecosystem of Greater Cleveland. It takes billions of dollars of investment to change a region's economic trajectory. While JumpStart empowers some tech startups and small businesses to succeed, Greater Cleveland needs significantly more resources to transform its economy.
What would it take to transform the Cleveland economy?
Competing with Columbus, Cincinnati, Nashville, Pittsburgh, Indianapolis and Chicago will require many more partnerships and collaboration amongst our region's most well-resourced organizations, institutions, corporations, and high-net-worth individuals and families. The public sector and local foundations have been champions of JumpStart and our partners over the last 20 years, but corporations and institutions lead the innovation and entrepreneurial ecosystems in the communities Cleveland competes with. Until corporations and institutions take the lead in Cleveland, I’m concerned we will never catch up.
What could taking this lead look like in Cleveland?
If a local corporation or institution raised a $200 million investment fund to support innovations by its researchers or physicians while supporting entrepreneurs across our community, that would create meaningful momentum. That is what is happening right now in Cleveland’s peer regions. Generating financial returns from such a fund may take seven to 10 years. Still, this is the kind of initiative that must happen if Cleveland is going to compete. We need to find someone ready, willing, able and interested to execute new ideas that move the economic needle while also having the purpose and desire to positively impact our broader entrepreneurial ecosystem and economy if we are to catch up with our peer cities.
What excites you about the OHIO Fund?
Being part of a one-of-a-kind impact fund focused on partnering with others across Ohio will enable our team to make a significant difference. It will strengthen Ohio's and Greater Cleveland's entrepreneurial ecosystems and help us build a more integrated network of investors from all sectors across Ohio who want to collaborate.
The OHIO Fund aspires to co-invest in companies, projects and funds that will generate significant returns while benefitting Ohio's economy and the economic future of all Ohioans. When the OHIO Fund succeeds, it'll help make Greater Cleveland, Northern Ohio and all of Ohio stronger, which has always been my goal while leading JumpStart.
