28 Letters of Intent Seek More than Double the Amount of Funding Available
The Ohio Development Services Agency (DSA) has released a list of 28 Letters of Intent (LOIs) it received from potential applicants seeking funding from the Ohio Third Frontier’s Pre-Seed/Seed Plus Fund Capitalization Program. The program’s RFP has made available $60 million for awards between the two programs. The LOI requests total $128,850,000.
The 2015 Pre-Seed/Seed Plus Fund Capitalization Program will increase Ohio’s number of professionally managed Pre-Seed Funds, create additional support for developing, retaining and attracting technology companies, increase early-stage capital investments in tech-based Ohio companies, accelerate the growth of high-potential tech companies as well as high-paying tech jobs, and continue building a deal flow pipeline that attracts VC firm resources from both within and outside of Ohio. The program provides capital to new and proven existing Pre-Seed Funds for early-stage tech company investments and to existing and active Pre-Seed Funds providing capital to Seed Plus stage technology companies having received professional seed stage financing that are progressing towards an institutional venture round.
Of the LOIs submitted, only three of Ohio Third Frontier’s six geographical regions are represented by potential lead applicants. Northeast Ohio leads the way with 17 LOIs submitted, followed by Central Ohio with six and Southwest Ohio with 5. Lead applicants from Northwest Ohio, Southeast Ohio and West Central Ohio submitted zero LOIs. Cleveland-based JumpStart is responsible for submitting 3 of the 17 Northeast Ohio LOIs and Rev1Ventures is responsible for submitting 3 of the 6 Central Ohio LOIs.
Additionally, 21 entities have submitted an LOI for the Pre-Seed Fund Capitalization Program, while 7 entities have submitted an LOI for a combined Pre-Seed/Seed Plus Fund. Only one entity, JumpStart, has indicated it may submit for a Seed Plus Fund, in addition to its two Pre-Seed Funds LOIs.
Currently, Ohio Third Frontier has invested in 17 Pre-Seed Fund organizations: JumpStart, Cleveland Clinic, Lorain County Community College, North Coast Angel Fund, Bizdom, Case Western Reserve University and Impact Angel Fund in Northeast Ohio; Queen City Angels, CincyTech and Cincinnati Children’s in Southwest Ohio; Ohio Tech Angels, Rev1Ventures and NCT Ventures in Central Ohio; TechGROWTH Ohio and East Central Ohio Tech Angel Fund in Southeast Ohio; Rocket Ventures in Northwest Ohio; and, Accelerant in West Central Ohio.
Pre-Seed Fund loan awards will range from $500,000 to $5 million and must provide cash cost share match of at least $1 for every $1 of Third Frontier funds requested. Seed Plus Fund loan awards will range from $2.5 million to $5 million and must provide cash cost share match of at least $3 for every $1 of Third Frontier funds requested. Eligible lead applicants are Ohio-based Funds or those with an Ohio principal place of business. Funds are expected to distribute investment returns to cost share providers, whether they be for-profit or nonprofit entities or individual persons.
Applicants are expected to address key areas, including their geography and technology and market focus; investment structure, size, phase and use; ideal opportunity or company being targeted and why it will attract follow-on investment to move to the next commercialization phase; ongoing sources of deal flow; projected outcomes and exit timing; support network within the geographic area served by a lead applicant; and, outreach plans to women and minority entrepreneurs.
Applicants will also need to address prior performance on Third Frontier awards and other investment funds, including previous fund track records and material successes and failures. Key focus will also be placed on projected economic impacts and regional priorities for Pre-Seed and Seed Plus Funds, including new jobs and average salaries; follow-on investments and grants, licensing income and other revenue; active and new companies in Ohio and attracted to Ohio; new research institution spin-out companies; and, portfolio companies raising at least $1 million in follow-on investment capital.
Full Pre-Seed/Seed Plus Fund Capitalization Program applicant proposals are due by September 15, and evaluator reviews and awards are expected to be considered and announced by the Third Frontier Commission in December.
The program RFP is available for review at http://development.ohio.gov/bs_thirdfrontier/pfcp.htm.
To discuss your organization’s interest in the Pre-Seed/Seed Fund Capitalization Program and how The Montrose Group can assist, please feel free to contact David Robinson (614-738-2109; firstname.lastname@example.org), Nate Green (740-497-1893; email@example.com) or Jon Dudley (660-864-5731; firstname.lastname@example.org).