Innovation capital in Central Ohio reached record levels last year, as 117 companies across the region received $307.56 million to grow their businesses, according to TechColumbus.
The 72.6 percent increase in innovation capital between 2009 and 2010 is the biggest jump that’s occurred since TechColumbus began tracking innovation capital in 2003.
Innovation capital includes all sources that fund the growth of innovation-based companies, including angel and venture investments, loans, grants, and mergers and acquisitions, thereby providing the most complete picture of innovation financing, says Will Indest, vice president of venture development for TechColumbus.
The significant jump in innovation capital most likely is tied to an increase in technology startups, Indest says, adding that commercialization will continue to fuel regional innovation capital increases in the years ahead.
Of the 117 companies that received innovation capital in 2010, all but seven were seed-, early-, and growth-stage companies, according to TechColumbus.
Such startups often have difficulty raising capital from traditional sources, such as banks and venture capital firms, because they are considered high-risk investments. However, Indest claims that supporting earliest stage companies is critical in light of data published by the Ewing Marion Kauffman Foundation in 2009 that indicate all net new jobs in the last three decades have come from firms less than five years old.
“The more seed-stage companies we can feed into the pipeline, the greater number of growth enterprises will begin to emerge from Central Ohio,” says Ted Ford, president and CEO of TechColumbus.
These promising, young, innovative companies are what attract venture capital to the region and drive the creation of high-paying jobs in our economy, he adds.
TechColumbus’s data is gathered from companies affiliated with the non-profit (which focuses on tech-based economic development in 15 counties), as well as state and federal grant distribution reports, Indest says.
TechColumbus will publish a full report on the state of innovation capital in the region within the next two weeks.
For more information about TechColumbus, visit TechColumbus.org.
Photo by Adam Slane Photography.