A Plan to Grow Cleveland's Tech Industry - Part III
During my time as “Tech Czar,” I had the privilege of meeting hundreds of entrepreneurs blessed with many, many great ideas. I quickly found that Cleveland and Northeast do not have a dearth of commercial, and yes, financeable ideas. Recently, I started to detail a development plan for the technology sector in Cleveland. The five proposed policies of this plan were:
I. The Cleveland Technology Center (“CTC”) – A collaborative hub of thought and development that becomes the centerpiece of Cleveland’s investment in the tech industry. This is a physical space, a state-of-the-art tech-based facility.
II. The Cleveland Ventures Fund (“CVF”) – A technology-centric fund that will invest in promising technologies, partnerships within the City of Cleveland. Goal was to secure $100.0 million to be invested in Cleveland-based tech-companies.
III. The “Information Technology” Cradle – Creation of special zones along Euclid, Superior and Carnegie that allow for heavy concentration of tech companies and new real estate development.
IV. Cleveland Municipal Schools Tech Vision – The Mayor’s Office and the CEO of the Cleveland Schools creating a special tech-based curriculum for top students.
V. “Tiger Teams” – A specialized group formed to target middle-market tech and biotech firms and assist them with the relocation of their corporate headquarters or R&D facilities to the City of Cleveland.
The key part of this plan was, in my mind, the Cleveland Ventures Fund (“CVF”) which would be a $100.0 fund that would invest in technology-centric opportunities including partnerships and alliances. The CVF would have at its disposal various investment interests meaning the fund could invest as an equity participant, debt-holder, grants and tax credits. Obviously, a complex fund like this would merit professional management with a mandate to invest in Cleveland-based opportunities. The funding, of course, is problematic but with money being provided by the local foundations, regional financial institutions, the City of Cleveland and perhaps the County. By the by, this is not an unprecedented strategy to be taking by the City. Primus was started as a City supported venture fund in the Mayor White Administration. And recently the City of Ann Arbor created an investment strategy by the same amount. See link at http://blog.mlive.com/ann_arbor_business_review/2007/12/ann_arbor_firms_invest_100m_in.html. Clearly, if the City of Ann Arbor can muster the courage to invest in their own tech sector then why not Cleveland?
Other components of the fund include the necessity of the fund to be evergreen in origin – meaning all proceeds of any investment (post liquidity event) would be returned to the CVF. I have always thought that this could have been such a dramatic tool especially with the creation of the CTC as described in my previous post. Imagine, a constant flow of entrepreneurial companies being accelerated in the CTC, financed by the CVF and finding new residence along the major corridors in Cleveland (i.e. – Euclid Avenue, Superior Avenue, St. Clair Avenue). An amazing synergy for development.
The original idea for the CVF was developed prior to Jumpstart, as defined by its current structure. I am a strong proponent of Jumpstart – its current financing opportunity of say $30.0 to $35.0 million is fantastic , but when spread out over 12 to 16 counties it offers just a beginning not the ultimate finality that many are looking for. Cleveland, as a city, merits this type of investment alone. Just think of the number of companies and brilliant talent that would flock to here just to have the opportunity to merit investment. Cleveland is experiencing a dynamic change of pace to have venture capital companies moving into the City to participate in the burgeoning deal flow in the regional biotech arena. I believe this is fantastic news. But, I would offer the caveat that our technology companies should not be overlooked either and, hence, the reason for the CVF.
I. The Cleveland Technology Center (“CTC”) – A collaborative hub of thought and development that becomes the centerpiece of Cleveland’s investment in the tech industry. This is a physical space, a state-of-the-art tech-based facility.
II. The Cleveland Ventures Fund (“CVF”) – A technology-centric fund that will invest in promising technologies, partnerships within the City of Cleveland. Goal was to secure $100.0 million to be invested in Cleveland-based tech-companies.
III. The “Information Technology” Cradle – Creation of special zones along Euclid, Superior and Carnegie that allow for heavy concentration of tech companies and new real estate development.
IV. Cleveland Municipal Schools Tech Vision – The Mayor’s Office and the CEO of the Cleveland Schools creating a special tech-based curriculum for top students.
V. “Tiger Teams” – A specialized group formed to target middle-market tech and biotech firms and assist them with the relocation of their corporate headquarters or R&D facilities to the City of Cleveland.
The key part of this plan was, in my mind, the Cleveland Ventures Fund (“CVF”) which would be a $100.0 fund that would invest in technology-centric opportunities including partnerships and alliances. The CVF would have at its disposal various investment interests meaning the fund could invest as an equity participant, debt-holder, grants and tax credits. Obviously, a complex fund like this would merit professional management with a mandate to invest in Cleveland-based opportunities. The funding, of course, is problematic but with money being provided by the local foundations, regional financial institutions, the City of Cleveland and perhaps the County. By the by, this is not an unprecedented strategy to be taking by the City. Primus was started as a City supported venture fund in the Mayor White Administration. And recently the City of Ann Arbor created an investment strategy by the same amount. See link at http://blog.mlive.com/ann_arbor_business_review/2007/12/ann_arbor_firms_invest_100m_in.html. Clearly, if the City of Ann Arbor can muster the courage to invest in their own tech sector then why not Cleveland?
Other components of the fund include the necessity of the fund to be evergreen in origin – meaning all proceeds of any investment (post liquidity event) would be returned to the CVF. I have always thought that this could have been such a dramatic tool especially with the creation of the CTC as described in my previous post. Imagine, a constant flow of entrepreneurial companies being accelerated in the CTC, financed by the CVF and finding new residence along the major corridors in Cleveland (i.e. – Euclid Avenue, Superior Avenue, St. Clair Avenue). An amazing synergy for development.
The original idea for the CVF was developed prior to Jumpstart, as defined by its current structure. I am a strong proponent of Jumpstart – its current financing opportunity of say $30.0 to $35.0 million is fantastic , but when spread out over 12 to 16 counties it offers just a beginning not the ultimate finality that many are looking for. Cleveland, as a city, merits this type of investment alone. Just think of the number of companies and brilliant talent that would flock to here just to have the opportunity to merit investment. Cleveland is experiencing a dynamic change of pace to have venture capital companies moving into the City to participate in the burgeoning deal flow in the regional biotech arena. I believe this is fantastic news. But, I would offer the caveat that our technology companies should not be overlooked either and, hence, the reason for the CVF.
http://www.theregister.co.uk/2008/01/08/malicious_website_redirectors/ (Comment this)