Ohio is getting back into the venture capital business. Ohio’s Third Frontier Program, launched in the early 2000s under Governor Bob Taft pushed Ohio into the technology-based economic development world through the creation of the Third Frontier Program. The result of that program was the funding of regional venture capital programs throughout the state. Ohio Governor Mike DeWine, Lt. Governor Jon Husted, and Ohio Department of Development Director Lydia Mihalik announced the availability of approximately $111 million to support Ohio tech-based companies through the development of two new Ohio venture capital funds.
Two new funds – the Ohio Early-Stage Focus Fund and Ohio Venture Fund – will help increase the amount of early-stage capital invested in Ohio technology-based companies, accelerate the growth of high-potential companies, and create a climate that supports the development, retention, and attraction of technology companies in Ohio.
Ohio Early-Stage Focus Fund will provide capital to professionally managed investment funds to support early-stage technology companies that are woman- or minority-owned or based in an area that has been underserved by venture capital. Organizations and private investment firms are eligible to apply for $1 million – $5 million of the more than $36 million available.
Ohio Venture Fund will provide investment capital to professionally managed investment funds to support Ohio technology companies with early-stage capital through Series A. Organizations and private investment firms are eligible to apply for $5 million – $10 million of the $75 million available.
The new programs are part of the State Small Business Credit Initiative (SSBCI) Venture Capital Program. Both programs are competitive, and proposals will be scored based on responsiveness to the requirements of the RFP. Letters of intent are due by 2 p.m., Sept. 21 and final proposals must be submitted by 2 p.m., Oct. 19.
Globally, venture capital investments have been in the tank after several years of dramatic growth. Ongoing uncertainty about the economy, projected interest rate hikes, and the lingering aftermath of bank failures continue to weigh on the startup ecosystem. According to EY venture capital investment in Q2 2023 dropped to $29.4 billion, down from $44.4 billion in Q1 2023, a decline of 34%.
However, the global decline in venture capital may well be Ohio’s gain. The lack of venture capital funding, much of which is located outside of the Buckeye State creates a substantial opportunity for regional venture funds to gain some additional support. Feel free to contact Dave Robinson at [email protected] if you need any assistance with the Ohio venture capital fund application and program.