Local program offers substantive help to early-stage entrepreneurs

If you're a southeast Ohio inventor with an idea that could be turned into a successful product, a program headquartered at Ohio University wants to help you learn how to run a business, pay for some of your overhead costs, and maybe even scare up some investment money.

"œThis program is really cool," enthused John Glazer, director of TechGrowth Ohio. "œIt's trying to help the region build an infrastructure for entrepreneurial support, especially for companies with technological innovations."  

The program, with offices at The Ridges, operates under the wing of OU's Voinovich School of Leadership and Public Affairs. It's one of six regional economic development programs funded through the Ohio Third Frontier Entrepreneurial Signature Program (ESP).

The idea is to establish networks in different parts of the state, to find budding entrepreneurs in tech-related fields and help take their potential products and services from the drawing board to the market.

With $10 million in original funding from the state, the Third Frontier ESP program can offer hands-on operational assistance to an early-stage business, cover the cost of some services the business needs, and, in some cases, even invest in the firm or help find private investors.

"There are like, three-and-a-half things that we can do to help companies," Glazer said.

Glazer explained that the model being used in TechGrowth Ohio is tailored to the special needs of the region, because boosting tech companies in a rural area like ours is a different task than it would be in an urban center like Cleveland or Cincinnati.

TechGrowth Ohio's specific "signature" areas of focus, according to its Web site, are interactive digital media, bio-science, bio-agriculture and advanced energy.

Anyone with an existing company, or just the plan for one, can apply online to see if they qualify for help from the program. Since starting in early 2007, according to operations manager Faith Knutsen, close to 1,200 companies have entered the program, and about 125 are currently getting help.

That help, as Glazer said, falls into three (and a half) categories.

First is "very intensive operational assistance" "“ basically helping people who may not know much about running a business learn how to do it. It's not just training and mentoring, either, Glazer said "“ it's "really roll-up-your-sleeves, hands-on deliverables... We try to get it all done."

In providing this, Knutsen noted, TechGrowth Ohio can call on the help of a wide variety of entities throughout the region that have an interest in economic development, from the Voinovich School to the Muskingum County Business Incubator and many more.

"It's brought together the disparate pieces of many, many pre-existing organizations," Knutsen explained. "The entire regional network of entrepreneurial support folks are linked in one way or another."

Everyone who gets into the program gets this benefit; some may also qualify for direct financial help.

"We're able to write checks," Glazer said, to help new businesses pay some types of costs related to bringing a product to market, such as, for example, patent filing fees, or product testing.

"We can buy on their behalf things that they need to get them through their development phases," he said. "We're able to laser-target what are the obstacles in their way."

He noted that covered expenses must be directly related to the product development; TechGrowth Ohio won't, for example, pay for someone to answer the phone and make the coffee.

For selected companies, TechGrowth Ohio may even be able to become an early-stage investor.

"We have a pre-seed fund," Glazer explained. And the way the investment is structured is extremely favorable for the company that gets it.

If the program decides to put investment money into a firm, it goes in as "subordinated debt," with no re-payment requirements for three to five years.

The idea is to help move the company to a point where private-sector investors may be interested in putting in some of their own money. And if at some point the company attracts investors willing to buy shares in it, then TechGrowth Ohio's "loan" turns into an equity investment "“ ownership in a piece of the company.

This means from the company's point of view that it gets an injection of money that combines the better aspects of both loan and investment. It's not a one-size-fits-all, however, and the terms of each investment package are customized for the business that receives it.

Finally "“ that "half-way" the program can help "“ TechGrowth Ohio will in some cases even help the company find those coveted "angel" or early-stage investors willing to take a chance on a new company in the hopes of catching a rising star.

With its network of economic development contacts including the Athens-based Adena Ventures investment firm, Glazer said, "we're able to open doors to investment capital for these entrepreneurs."