Innovation is nothing new in the place where William Procter and James Gamble teamed up 176 years ago.

But there is a lot more buzz around innovation and entrepreneurs in Greater Cincinnati lately.

Venture capital investment grew 34 percent to $70.2 million in southwest Ohio in 2011, despite a 22 percent decline statewide, according to the Center for Entrepreneurship at the Ohio State University Fisher College of Business, which conducts an annual analysis of startup activity in the state.

Cintrifuse, the regional innovation effort launched by the powerful Cincinnati Business Committee last year, is up and running with about a dozen tenants in temporary space at Sixth and Sycamore streets downtown.

Late last year, CNNMoney included Cincinnati among places in the United States where startups are thriving.

More than a year ago, the region's largest employers began putting their weight behind innovation efforts amid concerns Cincinnati wasn't attracting enough venture capital. On March 13 the region's entrepreneurial spirit will be the focus of the annual Power 100 Leadership Forum sponsored by Cincy magazine in partnership with the University of Cincinnati's Carl H. Lindner College of Business. Panelists include Jeff Weedman, Cintrifuse CEO, and Maribeth Rahe, president and CEO of Fort Washington Investment Advisors. David M. Szymanski, dean of the Lindner College, will moderate the breakfast forum at the Hilton Cincinnati Netherland Plaza downtown.

"There's much more awareness and appreciation for the role business startups play in the economy," says David Main, president of the Hamilton County Development Co., which operates Hamilton County Business Center, one of the largest and oldest business incubators in Ohio in a renovated paint factory in Norwood.

Bob Coy, president of CincyTech, the public-private partnership that invests in high-technology startups in the region, says a lot has changed in the seven years since CincyTech was formed.

"There are many, many more programs and organizations that are working in the area of entrepreneurship than 2006," he says. Besides entrepreneurial programs at area universities, several new business accelerators such as The Brandery, Innov8 for Health and Northern Kentucky's UpTech have launched and done well.

More Money

And funding organizations such as CincyTech and the Queen City Angels are able to assemble larger amounts of capital for startups, Coy says.

"Back in 2006 when we launched CincyTech, the region had a difficult time aggregating much more than $750,000 for a startup," he says.

Early stage projects in the life sciences and information technology needed more than twice that amount, he says. That led a lot of promising companies to either stall for lack of capital or move elsewhere to find it.

Coy believes a big factor has been Ohio's Third Frontier program to spur high-technology pursuits. The $2.3 billion in Third Frontier money is essentially a challenge grant, matching dollar-for-dollar locally raised funds for investment and entrepreneurial programs.

"Since we launched CincyTech in 2007, we've raised three seed funds with about $24 million of state money," Coy says.

Some of that money has been used to support other local entrepreneurial efforts such as the Queen City Angels and The Brandery accelerator.

Community-wide Support

Weedman, the Procter & Gamble executive brought in to lead Cintrifuse, thinks innovation activity in the region has reached a tipping point.

"There's enough raw material in terms of business opportunities and attractiveness. What's different is that it's been community-wide support doing this," he says.

That support has come in the form of big financial commitments from some of the region's largest employers such as P&G, Kroger, the University of Cincinnati and others.

Cintrifuse has raised more than $40 million from local companies for an early-stage venture capital fund.

This fund won't invest directly in startups. Rather it is what is known as a "fund of funds," investing with a network of venture capital funds, which, it is hoped, will invest in startups here.

The Cintrifuse fund is modeled after the approach used by the highly successful Michigan-based Renaissance Venture Capital Fund.

While the venture funds won't be required to invest in Cincinnati-area companies, they will be expected to participate in Cintrifuse events and activities.

This "carrot" rather than "stick" approach is important, Weedman says.

"If you require them to invest in a region, without knowing whether there's anything of value to invest in there, the best funds don't necessarily come."

By requiring the funds be involved in the local entrepreneurial community, Cintrifuse is betting those funds will find projects they want to support.

Successful Model

It's worked for Renaissance. Weedman says for every dollar Renaissance sent out of state in venture fund investments, those funds invested $3 in Michigan. And those funds, in turn, brought five more dollars from other funds to co-invest with them.

"That's a 15 to 1 multiple without contractually requiring them to invest," Weedman says.

Entrepreneur and venture capitalist Tim Schigel, who will manage Cintrifuse's "fund of funds," says the initial $50 million to $100 million won't go far in today's venture world, but investing it in 8 to 10 other funds will have a ripple effect.

"They'll want us as an investor, because we'll be helpful and provide access to some of the strategic companies in town," he says.

Each of Centrifuse's venture fund investments might have as many as 20 portfolio investors. "That's potentially 200 funds," he says with capital to invest.

"For a healthy innovation community to work, you need a lot of different startups and lots of different sources of capital," say Schigel, who spent nearly a decade at Blue Chip Venture Co. and launched his own startup, ShareThis, a sharing platform on the web now based in Palo Alto, Calif.

"When you go to raise money you're going to get turned down nine times out of 10. If you only have two or three sources of capital, the odds are against you."

Stepping Up Investment

It was concern that the region was falling behind in attracting venture capital and entrepreneurs that led to the creation of Cintrifuse more than a year ago.

CBC chairman Tom Williams put together a task force led by P&G's Bob McDonald and Jim Anderson, former CEO of Cincinnati Children's Hospital Medical Center, which hired McKinsey & Co. to look at the region's strengths and weaknesses.

The CBC effort was in response to a Cincinnati USA Regional Chamber study that found the region was significantly under-invested in job and business-creating venture capital compared to 11 peer cities.

The McKinsey study identified several entrepreneurial strengths the region could build on.

For example, Weedman says, although the level of venture capital was found wanting, the amount of early stage or seed capital "” money before projects reach the venture capital stage "” was quite high. And innovation wasn't found wanting.

Children's Hospital is the second-largest pediatric research institution in the country and the number of patents per capita in Cincinnati is high, thanks to research going on at places like the University of Cincinnati.

Cintrifuse isn't designed to compete with the entrepreneurial efforts that exist in the region, but complement them and fill in the gaps. It is intended, Weedman says, to be "the connective tissue" for the region's entrepreneurial eco-system.

"There's lots of good stuff going on but it's disconnected," he says. "If you're interested in finding out what's going on in the entrepreneurial community next weekend, what web site would you go to? Who would you call? It doesn't exist. There's no common calendar."

Additionally, he says, "The McKinsey report indicated that we don't have enough places, or a place, where startups, mentors, investors can go and be together."

By late next year, Cintrifuse expects to have that place in a permanent location in Over-the-Rhine, offering space and services to high-growth startups.

Providing Access

Because Cintrifuse has the support of the region's biggest employers, Weedman is asking them to provide not just money but access for entrepreneurs.

What that means in practice is that if a startup has a product that would benefit from an in-store test at Kroger, for example, "at the appropriate time, we'll get you to the front of the line for consideration," he says. "We won't guarantee distribution but you won't spend months and months getting to the right person."

For a venture fund backing a new medical device, it might mean getting access to the right doctor at Children's Hospital for due diligence.

Another idea that could prove valuable for venture funds are sessions where key area companies talk about new ideas or products they are seeking.

"There is no other region we've been able to identify that has the range of support from strategic institutions that we have," says Weedman. "This systematic connectedness is how we're going to distinguish ourselves."