January 2010 Newsletter

J a n u a r y 2 0 1 0 M e m b e r s N e w s l e t t e r

ffef J a n u a r y 2 0 1 0 M e m b e r s N e w s l e t t e r

F U N D F O R O U R

E C O N O M I C F U T U R E

On January 5, the Fund for Our Economic Future officially launched the second round of EfficientGovNow, the program that encourages and accelerates government cooperation and efficiency by providing funds to local government collaboration projects as selected by Northeast Ohioans. This round, the Fund is offering as much as $330,000 to be shared among as many as four projects – an increase in both the total dollars offered and number of projects supported by the inaugural round of EfficientGovNow. Currently, the Fund is conducting outreach to local government officials throughout the 16-county region, seeking ideas and plans for the implementation of projects that reduce government expenditures and strengthen Northeast Ohio’s economic competitiveness. To be considered, proposals must involve two or more governmental entities, demonstrate the potential to be replicated and demonstrate how the cost “savings” will be used to strengthen economic competitiveness, among other criteria. As was the case in the first round, the residents of the region will ultimately determine the three best collaborations from a pool of finalists, and grants will be awarded to the top three vote getters. The Fund has reserved the option to award a fourth grant to a collaboration involving smaller communities. Brad Whitehead, president of the Fund, anticipates a strong response to round two of EfficientGovNow. “Every day, we’re seeing more and more local governments propose collaboration projects, and the citizens of Northeast Ohio support their efforts to advance our region’s economic competitiveness. We look for this to translate into great proposals being submitted and tremendous citizen engagement when it’s time to vote in May,” he said. Kent State University, which serves as the fiscal agent for the program, and the John S. and James L. Knight Foundation are partners and sponsors of EfficientGovNow and its related activities.

More information, including the top ten ways to spur participation in the second round, is available at www.efficientgovnow.org.

Fund Launches Round Two of EfficientGovNow

20,000 23

Northeast Ohio by the Numbers

Playaway, the audio book device from Solon startup Findaway,

currently circulates in more than 20,000 libraries

GAR Foundation of Akron awarded $906,000 in grants to

support 23 nonprofit organizations in Northeast Ohio

EfficientGovNow Round Two Timeline

January 5 Request for proposals sent

February 26 Project abstracts due

April 19 Completed proposals due

April 30 Finalists to be announced

May 1-31 Public voting to take place

June Award recipients to be announced

S M T W T F S

320,000

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Fund Receives $3 Million Knight Foundation Grant for Government Efficiency Efforts

A $3 million grant from the John S. and James L. Knight Foundation recently added significant support to the Fund for Our Economic Future’s efforts to engage residents to offer solutions to local government on how to be more efficient and effective. The grant has a double focus: enhancing the Fund’s EfficientGovNow competition and building a new resident-led process to advance policy changes that strengthen the 16-county region’s economic competitiveness. The effort will be driven by civic journalism and social media programs that will employ both online tools and more traditional grass-roots efforts. As the region’s residents develop consensus, the Fund will provide support to implement government and policy changes. “At Knight Foundation, our ideal is informed and engaged communities – places where people have the information they need and the shared vision to act on it,” said Paula Ellis, Knight Foundation’s vice president for strategic initiatives. “The Fund’s efforts use new and traditional tools to help reach that goal. It aims to transform the way the public and government work together to solve increasingly complex problems.” Making local government more efficient and effective is one of the four focus areas of the Fund. “Knight Foundation’s grant provides us with the resources to use new forms of communication and traditional community forums to empower our region’s residents to be more engaged in shaping the future of our local governments,” said Fund Chairman David Abbott. “This process may ultimately serve as a national model for sustainable civic engagement.” The Kent State University Foundation will act as fiscal agent of the Knight Foundation grant. Kent State University’s Center for Public Administration & Public Policy will play a key role in guiding and evaluating the efforts to make local governments more efficient and effective. “Overall, the goal is to create a course of action that will educate, engage and empower our region’s residents to drive changes that will result in more effective and efficient government,” Abbott said. “Our region will be stronger if we’re able to engage our citizens in proactively addressing some of the more vexing issues we are facing. Ultimately, we hope this process will extend beyond issues related to government and be flexible enough for residents to use to address other key priorities.”

65 1.5 1

Northeast Ohio by the Numbers

William and Rebecca Considine donated $1 million

to Akron Children’s Hospital for its new research institute

The Akron Community Foundation awarded $1.5 million in

grants with the focus on emergency programs that provide food,

clothing, shelter and health care to residents in need

The Lorain County Community College and the University of Akron will receive as much as $320,000

from the Lumina Foundation for Education to strengthen a

Shared Services Program

The John S. and James L. Knight Foundation advances journalism in the digital age and invests in the vitality of communities where the Knight brothers owned newspapers. Knight Foundation focuses on projects that promote community engagement and lead to transformational change.

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State Legislature Considering Extending Third Frontier

Since 2002, the state’s Third Frontier program, which The Plain Dealer calls “Ohio’s most effective economic development initiative,” has supported the work of scientists and entrepreneurs, the formation of new companies and the creation of an estimated 41,000 high-end jobs statewide. Northeast Ohio institutions and companies have received the majority of Third Frontier funding, nearly $424 million. Throughout its tenure, the Third Frontier program has awarded grants to: Fund grantees BioEnterprise and JumpStart; growing tech companies, including many portfolio companies of Fund grantees; and university-based research and commercialization efforts, including Case Western Reserve University, Lorain County Community College’s Innovation Fund and the Rolls Royce Fuel Cell Systems at Stark State College. Last September, a report looking at Third Frontier’s impact was issued by SRI International, a California-based consultant hired by the Ohio Department of Development. The report found $681 million in Third Frontier funds invested so far have generated $6.6 billion in economic activity and $2.4 billion in wages and benefits. The report concluded that the program is working and funding should continue, if not increase, with more dollars targeted to support entrepreneurs. Additionally, the Ohio Business Roundtable issued a report this month that found Third Frontier has attracted $3.2 billion in private investment since it began. “The Third Frontier has emerged as the centerpiece of Ohio’s economic-development platform and the envy of other elected leaders across America,” said the Ohio Business Roundtable’s leaders in the report’s preface. Funding for Third Frontier, however, has reached a crossroads. Presently the program is set to expire in 2012. The Ohio House of Representatives introduced legislation for a $1 billion renewal of the program to be voted on by Ohioans in May 2010. While saying they favor extending the program, Senate Republicans are less certain about the timing of the vote. Editorial pages from across Northeast Ohio have come out in support of a May 2010 renewal, stressing that the continuation of Third Frontier is an essential key in creating a vibrant economic future for our region.

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300

2Northeast Ohio by

the Numbers

BioEnterprise grantee AxioMed raised $6.4 million to continue developing its

spinal implants

Reinforcement Solutions of Allentown, Pennsylvania will start a manufacturing plant in

Warren, creating 65 jobs

Learn more about the Third Frontier and the more than 149 grants the program has awarded Northeast Ohio by visiting the program’s Web site at www.thirdfrontier.com.

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NorTech Identifies First Two Projects for Energy Initiative

As a part of its new advanced energy initiative, Fund grantee NorTech has announced its involvement in two projects that that will generate economic impact in the region’s advanced energy industry. NorTech’s first project will be to facilitate the creation of the Lake Erie Energy Development Corp. (LEEDCo), a regional nonprofit organization that will be responsible for accelerating offshore wind energy projects in Lake Erie. LEEDCo activities will include securing and holding submerged land leases and acquiring necessary permits for “project-ready” sites, as well as promoting those sites to attract developers of large scale wind farms on Lake Erie. LEEDCo will engage with all communities along the Lake Erie shoreline, from Ashtabula to Toledo, in efforts to develop a regional offshore wind industry in Northeast Ohio. “The creation of LEEDCo will establish a partnership with the goal of enlisting the participation of all the Ohio Lakefront Counties to maximize the economic development opportunities from advanced energy for the region,” said Bill Mason, Cuyahoga County prosecutor and Great Lakes Energy Development Task Force chairman. NorTech’s second project will be to facilitate the creation of a Technology and Business Center for Energy Sustainability, a cleantech incubator in Warren, Ohio. Congressman Tim Ryan (District 17) recently secured a $2 million appropriation to rehabilitate a facility in Warren to house the incubator. NorTech will work with the incubator’s board to secure additional funding commitments to support incubator construction. Collaborators for the Warren incubator project include the Fund, JumpStart, Kent State University, RPM International, Trumbull 100, Youngstown State University and the Ohio Department of Development. “Developing clean and renewable energy technologies that help create green jobs is key to Northeast Ohio’s future economic growth. I am pleased NorTech has taken a leadership role to help drive the Warren incubator project to fruition,” Congressman Ryan said. Overall, NorTech’s advanced energy initiative serves as a catalyst for accelerating commercial activity and creating jobs in Northeast Ohio’s advanced energy industry by convening, connecting and educating public and private sector partners, building public sector support, and leading multi-stakeholder projects that attract capital and create jobs. “We believe the high growth projects selected will lay the groundwork to spur innovation and entrepreneurship, attract private sector companies and investments, create jobs and further develop the supply chain to support commercialization of advanced energy technologies in Northeast Ohio,” said Rebecca Bagley, president and CEO of NorTech.

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Northeast Ohio by the Numbers

JumpStart invested in its 42nd company, Electron Database Co. in Richfield

AIM Pharmakon will employ as many as 40 people in its new University Circle research and

development facility

Forbes magazine names the Mahoning Valley area the 25th ‘best bang for your buck’ location

in the United States

3.2

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State Panel Praises Fund’s Government Leadership

A state-appointed commission exploring local government reform invited the Fund for Our Economic Future to testify during its public hearing held on Dec. 4 in Cleveland. Bob Jaquay, vice president of the Fund and co-chair of the Fund’s Government Action Team, shared with the 15-member panel the Fund’s research on the impact that local governments have on the region’s economic competitiveness. Jaquay told the commission that the success of EfficientGovNow proved that Northeast Ohio governments are eager to collaborate with each other, but are also in need of political coverto make collaboration more acceptable. “If there is a way to build in some credit, some sort of political cover for those doing the right thing, it gives an impetus to move things along,” Jaquay said. The Commission applauded the Fund’s work with government collaboration in the region, and one commissioner said he hopes the rest of the state takes note. “I hope this is the direction this commission will go, building on what you have done in Northeast Ohio,” Commissioner Mike Cochron said. The Commission is charged with researching and writing a report that recommends reform and collaboration measures that improve local government operations. Its report is to be issued to the state Legislature in June 2010. The commission also heard testimony from Hudson Mayor William Currin regarding the Regional Prosperity Initiative, which is being supported by the Fund. The initiative is developing a framework to expand regional planning and to share a portion of new tax revenue generated from that planning. “If we want to be more regional, the way we are getting our revenue has to change,” said Commissioner Dan Foley.

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Northeast Ohio by the Numbers

A study released by the Ohio Business Roundtable found the state’s Third Frontier program

has attracted $3.2 billion in private investments

Case Western Reserve University has received a $19.7

million federal contract to become an international clinical trials site for the Tuberculosis Trials

Consortium

Aeromics received a $2.25 million grant from the National Institutes of Health to further its development

of a drug to reduce brain swelling in stroke victims

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Bob JaquayVice President,Fund for Our Economic Future

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1.5Northeast Ohio by

the Numbers

MAR Systems raised $1.5 million to develop its water

treatment technology

Team NEO Helps Attract Pharmaceutical Company

Fund grantee Team NEO, the region’s business attraction organization, has brought their ninth company to Northeast Ohio this year. AIM Pharmakon, a maker and marketer of drugs and dietary supplements based in Centereach, New York will invest $2 million in a manufacturing and research-and-development facility employing about 40 people in the University Circle neighborhood of Cleveland. The region’s growing biomedical base and expertise in heart care attracted the company to the region, the company’s president, Vijay Puntambekar, said in a news release. AIM Pharmakon’s business includes consulting with pharmaceutical and dietary-supplement companies looking to break into markets here and overseas. In Cleveland, it wants to manufacture a dietary supplement that it licensed from a Japanese company, and do clinical testing of the product with one of the area’s hospital systems. Through the end of November 2009, Team NEO has helped attract nine companies with 859 jobs, $22 million in payroll and $38 million in capital investments.

JumpStart’s Investment Portfolio Expands JumpStart added its 42nd company to its investment portfolio by committing $250,000 to Electron Database Co. of Richfield. Electron Database is creating a database software application that aims to dramatically improve the performance of enterprise applications, data warehouses and cloud computing infrastructures. The patented technology is expected to deliver faster performance on today’s hardware and dramatically faster performance with hardware innovations entering the market over the next few years. “Because of the support we have received from JumpStart and our international partners, we are already collaborating with IT’s most important players,” said Prakash Raju, co-founder and chief technology officer of Electron Database. JumpStart Venture Partner Ted Frank said hardware manufacturers recognize that without improved database software there will be limited reasons for companies to adopt the new innovations. “Electron Database’s software will produce a very compelling reason to adopt these technologies and help manufacturers capitalize on their multi-billion dollar investments,” Frank said. JumpStart’s investment will be used to further develop the software and establish strategic partnerships.

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The summit will include panel discussions featuring successful minority entrepreneurs and investors who specialize in creating wealth for minorities through entrepreneurship. Dr. William Pickard, currently CEO and chairman of VITEC, will keynote the summit’s lunch program. VITEC is a leading automotive parts supplier and Dr. Pickard is a successful serial entrepreneur, having led five entrepreneurial ventures prior to VITEC, including the investor group that brought the MGM Grand Casino to Detroit. In the afternoon, some of Northeast Ohio’s most promising minority-owned companies will be highlighted in an entrepreneurial showcase. “The partnership of ICIC and The Marathon Club in this summit recognizes the national leadership of the Northeast Ohio region in the development of high growth, equity-backed minority and female-led businesses, as well as those in the inner city,” said Darrin Redus, chief economic inclusion officer of JumpStart. “This summit, which brings together some of the most influential national and regional leaders in this space, represents much more than an extraordinary opportunity for minority entrepreneurs.

It’s an opportunity for all entrepreneurial stakeholders, regardless of race or gender, to better understand the unique challenges and critical next steps that must be addressed if we are to see real progress in growing the types of larger scale, diverse, job creating businesses that are a vital component to our regional and national economy.” The event will be held at the Bank of America Conference Center at the InterContinental Hotel in Cleveland from 7 a.m. to 5 p.m. The cost is $75. Visit www.jumpstartinc.org or call JumpStart at 216.363.3400 for more information and to register.

JumpStart Companies Raise Growth Capital Despite a nationwide decrease in the amount of venture capital raised in 2009, two growing companies in Fund grantee JumpStart’s portfolio have been successful in closing rounds of funding in the past month.

MAR Systems, a clean-tech company that provides proprietary processes for the removal of metal contaminants from water and industrial fluid waste streams, just closed a $1.5 million Series B round of funding. Funding was led by Early Stage Partners, a Northeast Ohio venture capital firm, with participation from several of MAR’s existing investors. The funding will allow MAR to continue product development and commercialization of its Sorbster™ media that removes mercury, arsenic and other heavy metals from water. “We’re on the verge of changing the water treatment industry with our media,” said Tony Lammers, CEO, MAR Systems. “Not only is MAR excited to continue commercialization on its latest media, but to have a partner in Northeast Ohio that understands what we are accomplishing is extremely rewarding.”

The Fund regularly features Northeast Ohio companies being helped by our grantees. These companies, including the one featured here, are part of the region’s portfolio of growing businesses that are building Northeast Ohio’s economic future.

Medical Device Company Calls Region the “Place to Be”

Syncro Medical Innovations from Youngstown is one of the promising companies in Northeast Ohio’s growing portfolio of companies in the medical device sector.

What makes Syncro Medical Innovations special?Syncro Medical Innovations is dedicated to utilizing technology and engineering expertise to advance breakthroughs in the enteral nutrition market – an area of medicine often neglected. By working to develop new innovative technologies in the field, the company advances its mission of “enhancing the healing hands of the medicine world.” How has BioEnterprise helped Syncro Medical Innovations grow?The BioEnterprise team played an essential role in helping Syncro Medical Innovations relocate to Northeast Ohio by helping company leaders connect with key figures at the local, state and federal level. These connections helped the company secure prime office space, obtain a $350,000 Third Frontier grant for research and commercialization, and obtain $2.1 million in federal funding. All of these resources have allowed Syncro Medical Innovations to expand its executive team in Northeast Ohio.

Why is Northeast Ohio an attractive place for medical device companies?Syncro Medical Innovations’ leaders credit Northeast Ohio with having all of the resources and support necessary to launch a successful medical device company, including world class institutions to help with the clinical trial work necessary to prove the utility of a medical device. And, company leaders credit the “amazing” level of cooperation and support from all levels of government with allowing the company to grow quickly, calling Northeast Ohio “the place to be for any aspiring company.”

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Syncro Medical Innovations has

developed the FDA-approved Syncro

Blue Tube™, a novel magnetically

guided enteral feeding tube. Successful

duodenal placement of the tube is

performed at the bedside without

fluoroscopy, endoscopy or medications.