Ohio Safe. Ohio Working. LEARN MORE

Innovation Fund Frequently Asked Questions

Why is Jobs Ohio creating an Innovation Fund?

Prior to recent Covid-19 developments, JobsOhio was in the process of developing a co-investment program to partner with Ohio’s most innovative businesses and entrepreneurs. In response to the Covid-19 crisis, JobsOhio has modified the program to address near term needs as well as anticipated longer-term requirements. This program is complementary to our portfolio of programs that are addressing Covid-19 challenges and opportunities for Ohio businesses from small to large and across industries.

 

What types of companies is this fund targeting?  

Venture-backed firms are some of the highest growth firms in the economy. Ohio’s world-class research institutions and universities have accelerated commercialization efforts, creating game-changing technologies. These companies span software, digital services, healthcare, financial technology and other domains. The targeted companies represent innovative businesses with strong market positions, high potential, and private investors ready to step-up at this challenging time.

 

What is the need JobsOhio is addressing?

As with many small businesses, growth capital is essential to scale employment - typically directed at product development, selling, back office and management functions.  JobsOhio sees an opportunity to partner with traditional venture capital sources (venture firms, institutional investors, strategic investors, and entrepreneurial services providers).

The JobsOhio Innovation Fund will provide bridge-loan financing for Ohio’s most promising start-up companies to retain their workforce, ensuring they can continue to grow as they approach their next funding round.

 

Isn’t the federal government CARES Act programs responsive to the near term need?

No.  The program’s requirements are not suited for many venture-capital backed businesses. For those that do qualify, these loans provide partial support for 3-4 months of expenses. Venture-backed businesses operate at a loss until they reach scale. So even those who receive CARES Act loans will need to raise additional capital quickly. For this reason, JobsOhio is partnering with private investors to ensure many promising businesses in these important sectors are able to continue to grow and thrive.

 

How is this program different and complementary to the recently launched JobsOhio Workforce Retention Loan program (WRL)?

The JobsOhio Innovation Fund is different in a couple ways.  First, this program is directed at a different company type than JobsOhio’s other programs. It’s aimed at venture-backed, earlier stage companies where JobsOhio doesn’t have a current active project or investment.  Second, the form of funds offered to these companies will be a convertible loan, whereas the WRL program is a loan with a forgiveness element.

 

Why wouldn’t JobsOhio just expand the Workforce Retention Loan program to these companies?

The JobsOhio Innovation Fund is directed to venture-backed companies where JobsOhio is providing a loan alongside a match by the company’s lead investor to inject capital that will provide cash to sustain momentum. Important elements of the Innovation Fund program are that JobsOhio is not ‘going it alone’.  Rather, we are matching with private funds and mirroring terms from the lead investor, that will be acceptable to both the company and future investor base.

 

Is JobsOhio limiting eligibility to this program? If so, in what ways?

Eligibility is initially being limited to Ohio venture-backed companies that have already raised Series A financing or later financing round prior to Covid-19, and expect that financing to be delayed, resulting in a material impact on growth or other critical milestones. Companies should have matching investment capital ready for commitment to the program of at least 1:1 within 30 days of submitting an application. We are asking Ohio’s venture investment community partners to nominate those companies who have a current cash need (given delays in fundraising), where they are willing to match investment dollars into the companies, and where the future rounds are targeted to achieve at least a 4:1 ratio of new dollars in to the company for every one dollar JobsOhio invested. Additionally, companies will be required to maintain their existing employment base and payroll.

 

For more information and to inquire about program eligibility please email innovationfund@jobsohio.com.