When it comes to turning bright ideas into successful new businesses, is Cincinnati still lagging in the competition for high-tech investment money?

The question persists because Cleveland and Columbus have captured so much of the cash from Ohio's Third Frontier, a $1.6-billion state development program designed to seed and nurture technology enterprises"”and create jobs. From 2002 to 2005, Cleveland and Columbus combined got 70% of the $321 million in grants awarded. Cincinnati reaped $44.6 million"”just under 14 percent.

Bob Coy took over as president of CincyTech USA last November. The organization, initiated by the Cincinnati USA Regional Chamber, is collaborating with the Chamber's USA Partnership, Children's Hospital Medical Center and the University of Cincinnati. He came from St. Louis with impressive credentials, including helping form the St. Louis Arch Angels, a group of 44 "angel" investors.

His strategies for CincyTech's new phase look sound. First, help regional tech companies succeed, but focus on the ones with high growth potential: able to hit $20 million or more in revenue within five years. Second, find support for the most promising of the true startup businesses. Third, exert a leadership role in bringing together more of the players: universities, industry partners, venture capitalists, small business incubators, minority accelerator programs and so on.

 

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One experienced observer believes we're doing better than people presume. "Fifteen years ago, there was no venture activity in Cincinnati," says David Willbrand, an attorney at Thompson Hine who concentrates on emerging businesses and venture capital. Today, the amount of business under venture capital management "far exceeds what it should, per capita" for a city this size. "In 10 years we've closed the gap tremendously."

People tend to think Silicon Valley was invented in the 1990s, Willbrand adds, but it goes back to the 1930s. "You have third- and fourth-generation venture capitalists there. It's part of the culture."

Cincinnati differs from other Ohio cities in its business culture, Willbrand says. Historically, we've had more of a laissez-faire, free market attitude, so institutions and organizations might be a bit slower to exert the authority to bring parties together and create winning Third Frontier proposals"”and that's what has happened in Cleveland and Columbus, even Dayton. In addition, Willbrand says, the blessing of having large, solid corporations as major employers"”Kroger, Procter & Gamble, Federated, Fifth Third Bank"”gives us stability that other cities envy. But entrepreneurial energy and risk often arise from crisis, not contentment.

Willbrand advocates seeking near-term, measurable goals such as Coy's revenue targets. "But the real test will be 2050. What will we look like then?"

Coy and Willbrand agree on another point: The Tristate has to attract, keep and develop more talent"”and not just the classic "American Inventor" entrepreneurs. Coy is especially keen on connecting startups with experienced executives who have proven track records, an "executives in residence" program. Willbrand says we need more of the creative, hard-driving managers and professionals who can build and market new ideas into sustainable, adaptable high-growth businesses.

"Inventions often come from universities and research institutions," he explains. "Companies are run by trained professionals, and frequently those don't include your classic entrepreneurs. We still need to supplement that class of professional in Cincinnati."

Willbrand sees positive signs for a resurgence in tech business growth. "We have good leaders and the bases are covered. Northern Kentucky University, UC and Xavier"”the effort is there. They're taking the right steps," he says. So is CincyTech. "It's helpful having a guy like him (Coy) driving the charge."