Meet the people, organizations seeking to widen interest in and impact of VC in Central Ohio

A new state tax break encourages participation in a record-breaking streak for VC, while a bevy of new Central Ohio venture funds seek to spread the wealth to investors and entrepreneurs historically left out.

Drive Capital LLC, with $1.2 billion under management, definitively changed the venture landscape in Columbus since 2012. Local companies in its portfolio are responsible for more than $900 million of a record $2 million raised by tech companies statewide to date this year, as detailed this week's Columbus Business First cover story.

But several new funds this year focus on much earlier startups. And all of the funds, including Drive, say the more, the merrier.

"To build out a thriving ecosystem in Central Ohio, we need to have more investors deploying capital," said Will Zell, whose Zell Capital started at least a two-year path to raise $50 million.

"We're trying to blaze a new trail," he said. "We're gaining momentum and have started to deploy capital."

Corporations and economic development organizations are trying to boost the sector as well. Nationwide, for example, added $250 million this year to its VC arm, although to date only one of its investments has been in Columbus. Another moved headquarters to Columbus from Los Angeles after the insurer invested.

JobsOhio created a $50 million fund dedicated to co-investing in VC rounds for in-state tech companies. The Ohio Chamber of Commerce is lobbying Gov. Mike DeWine and lawmakers to invest as much as $1 billion of a projected $3 billion budget surplus over the biennium in a "fund of funds" that makes the state a limited partner in VC and private equity firms.

The state budget enacted this July created an incentive for the sector: Starting in 2026, capital gains will be tax free on certain VC investments, whether made directly in Ohio companies or as a limited partner in funds that invest in Ohio companies now through 2025. VC firms register with the state to qualify; they must manage at least $50 million in investment funds, and two-thirds of managing directors and partners must be Ohio residents. Budget officials estimate it could total tens of millions of dollars in foregone tax annually starting in fiscal 2027.

In contrast, Zell is using a very old federal law to open VC investing to non-wealthy individuals, with a minimum investment of $1,000. It's a first-time structure but made possible by the Investment Company Act of 1940.

"It's what I laugh about most: This could have been done," he said. "There's a number of reasons that it hasn’t been done – but now is the time."

Rev1 Ventures so far this year has raised a $20 million fund to invest in early stage startups, and a separate $10 million fund for even earlier pre-seed startups. This week, it created a $2.8 million program, half funded by the federal government, to expand mentorship and business services to entrepreneurs who are women or members of underrepresented racial and ethnic groups.

Also in Columbus, Overlooked Ventures seeks to raise $50 million and has already invested in three startups, focusing on diverse founders traditionally left out of VC consideration because of their identity or socioeconomic status.

Tamarind Hill, an early stage investment firm jointly based in Columbus and Ann Arbor, reported in a regulatory filing that it's raising a second fund of up to $50 million. Partners said they can't comment while actively raising.

Columbus-based Loud Capital reported the opening of its third fund, for an unspecified amount, in a regulatory filing.

In a joint venture, Loud and consultant Atlas Venture Partners are raising three funds toward more inclusive investing. Listed with their focus and fundraising goals, they are:

"In order for us to change the industry, we have to have success with these funds," said T. Wolf Starr, managing partner for the three funds and CEO of Atlas. "If it’s a set of funds that just do OK, then no one is going to copy us."