Innovation Capital Grows by 72.6% in 2010 to $307M

In 2010, innovation capital in Central Ohio reached an eight-year high, as 117 of the region’s most promising young companies received $307.56 million to fuel the growth of their businesses.  This represents a 72.6 percent increase over 2009. 

Innovation capital, which includes all sources that fund the growth of innovation-based companies – including angel and venture investments, loans, grants, mergers and acquisitions and other sources – offers the most complete picture of innovation financing in Central Ohio. 

Perhaps the most compelling and promising portrait of the region’s innovation ecosystem is the amount of funding that is being made available to an increasing number of seed-, early- and growth-stage companies.  In 2010, out of the total 117 companies receiving innovation capital, 110 of those were seed-, early- and growth-stage companies. 

Such startups often have difficulty raising capital from traditional sources, such as banks and venture capital firms, because they are considered high risk investments.  And yet, support of these earliest stage companies is particularly critical  in consideration of data published by the Ewing Marion Kauffman Foundation that indicate, in the last 30 years, all net new jobs have come from firms less than five years old.

“Continuing to support these earliest stage companies is critical to the advancement of Central Ohio’s innovation economy,” says Ted Ford, president and CEO of TechColumbus.  “The more seed stage companies we can feed into the pipeline, the greater number of growth enterprises will begin to emerge from Central Ohio.  These promising, young, innovative companies are what attract venture capital to the region and what drive the creation of high-paying new jobs in our economy.” 

Innovation capital to support seed- and early-stage companies can come from a variety of sources including any number of federal grants (such as SBIR and STTR grants from the Small Business Administration), state and local funding programs (like those made possible through the Ohio Third Frontier), and from investment sources focused on seed- and early-stage deals (i.e. local and national venture firms, Ohio TechAngels, the Co-Investment Fund and the TechColumbus Pre-Seed Funds).
TechColumbus, which has tracked innovation capital trends and funding back to 2003, will soon issue a full report on the state of innovation capital in the region.