(The Center Square) – Ohio is handing out $86 million in federal taxpayer money to private investment funds to be passed on to early-stage tech companies that are women- or minority-owned or in underserved areas by venture capital.
The money comes from the federally-funded State Small Business Credit Initiative Venture Capital program, and Ohio Department of Development Director Lydia Mihalik says the money helps level the playing field.
“These awards will help spur innovation by fostering a diverse entrepreneurial ecosystem and accelerating the growth of high-potential companies,” Mihalik said. “By directing these funds to historically under-represented founders and tech-focused companies, we’re leveling the playing field and ensuring everyone has a chance to succeed in the heart of innovation.”
Ohio’s $86 million is going to 11 professionally managed funds, which are supposed to invest in companies focused on things like health care, manufacturing and food technologies.
The funds were eligible to apply for between $5 million and $10 million.
“Ohio was awarded these federal funds, and so we have the responsibility to invest them wisely,” Lt. Gov. Jon Husted said. “The strategy is to help leverage private dollars for small businesses that have a difficult time attracting early-stage investors with the aspiration of building a new generation of businesses in underserved communities.”
One company, JumpStart Ventures and its parent company JumpStart, Inc., received nearly half of the $86 million for four Cleveland-area-based programs.
It received $5 million for its Focus Fund II, which invests in software applications for business and health care created by businesses led by or serving communities of color.
It also received $10 million for its NEXT Fund III, which will invest exclusively in Ohio headquartered companies, and another $10 million for its Evergreen Fund IV, which also focuses on software for business, health care and medical technology.
JumpStart Inc. received $10 million for its Ohio Life Sciences Fund with a focus on life science companies.
Two $5 million awards went to Columbus-area groups, while two Cincinnati groups received $10 million and two other Cleveland-area groups received $10 million.