A downtown Dayton small business development organization, generating $7.8 million in 2022, is welcoming a new leader in innovation to leverage investment and partnership opportunities for small businesses. The change follows a successful fund raising period in 2023.
The Entrepreneurs’ Center (EC) in downtown Dayton recently appointed Mike McCann as vice president of innovation. In his role, McCann is focused on growing engagement and connectivity within the Dayton community, specifically within the innovation ecosystem.
His newest position follows over a decade of experience working at Rev1 Ventures, a Columbus-based venture development organization, where he created partnerships and investment opportunities between startups and major enterprises.
Prior to that, he started his career in operating roles at technology startups. McCann said his experience will give him the insight needed to act as the connective tissue between entrepreneurs and innovation leaders in larger corporations, enabling mutually beneficial, high-impact outcomes.
“I’ve had experience on both sides of the table – in the startup trying to gain market share and grow, and with the venture firm providing services and capital across a portfolio of companies," McCann said.
McCann recently caught up with DBJ to discuss the latest in Dayton’s entrepreneurial market and where the EC is setting its sights for 2024.
What made you want to come to Dayton? What do you hope to achieve in your new role?
“First, I’m excited about the opportunities for growing startup and innovation impact here in Dayton. We have great R&D assets – more than $7 billion in annual R&D as a region – and a great base of technical talent. EC has made a significant impact on the community. Our Ohio-based clients have generated more than $500 million in economic impact since 2017 (revenue generated, capital attracted, and non-dilutive funding). This impact is a testament to the hard work of our client entrepreneurs and the resources the EC team has organized. My goal is to help EC expand these impacts by engaging the community in areas that can help entrepreneurs start and grow – rallying our stakeholders to be mentors, early adopters, and even investors.”
“Second, I have Dayton roots going back several generations and spent a good part of my childhood in east Dayton. The opportunity to join EC and align my experience with making an impact in my hometown is an opportunity I simply could not pass up.”
What is the startup/funding market like in Dayton compared to other areas?
“In the US, VC funding was down 48% in Q2 2023 compared to the same timeframe last year. We see this impact here in Dayton, too. We do have a few examples where growth-stage companies are getting traction and raising capital this year – like a rising climate tech company recently raising a $67 million Series B funding round, but Dayton-region startups at the earlier seed stage struggle to access capital.”
McCann said while other regions in Ohio and the Great Lakes have similar challenges meeting all the capital demand in their ecosystem, many like Cincinnati, Columbus, Indianapolis, and others have resident angel networks and seed funds making investments into their startup community. He said the lack of local and accessible startup capital makes it difficult for a promising company to raise capital in the critical early stages.
"A founding team must be independently wealthy, have a built-in network of active investors, or take on the arduous task of finding out-of-town venture firms to invest. At EC, we’re building solutions to help companies access capital – from direct support preparing founders to pitch and connect with investors to initiatives that bring investor attention to rising startup opportunities here in our region”
How much funding has been dispersed to your startup portfolio at the EC in 2023 so far?
EC clients have raised more than $100 million so far in 2023.
“This is phenomenal for our region and validation that great companies can scale here. But it’s notable that most of this is from a small number of mature, later-stage startups. We continue to see seed-stage companies challenged as they try to access capital to get into their market. This is why we invest so much of our time in helping companies get to market and provide resources and services that can help them access non-dilutive capital, like federal SBIR grants and Ohio TVSF grant programs.”
What are some strategies you have to help leverage startup growth and opportunities?
“First, we will look to get our stakeholders to the table. Building a vibrant startup ecosystem is a team sport. Yes, we need entrepreneurs with great ideas and passion. We also need our corporate community, research institutions, and stakeholders – as mentors, as customers, as advocates.”
“Second, I noted the Dayton region has limited capital resources for entrepreneurs today. But the startups in this region that do find success in accessing capital are those that are solving real market needs and are building strong business models – companies doing this from the beginning will have a much higher probability of success in the long run. Investors want to see traction and execution, so we aim to help companies get to market and build a strong business model from the start.”
Give us a glimpse at some goals for the EC and its Dayton startup profile in the tail end of 2023 and in preparation for 2024.
“Our primary goal as we head into the second half of 2023 is to help our startup clients navigate a very difficult venture capital market. Companies looking to raise their first funding rounds will have difficulty doing so; they need help validating that they’re solving significant market needs and have a pathway to generating revenue. Companies looking for their next capital raise may have to wait longer, take less money, and extend their runway more than they may have planned.”
“For the region, EC is going to continue building infrastructure that provides support to our entrepreneurs and innovators, especially around creating engagement and connectivity across our innovation assets – how companies can validate their ideas and get into the marketplace; how founding teams are accessing capital in the region and beyond. For example, EC has built a great foundation with its angel investor network, EC Angels. This group is highly engaged, and we have an opportunity to expand it in 2024 and for years to come – to review more opportunities and make more investments.”
