For Northeast Ohio, JumpStart's participation means national attention and an opportunity to attract investments from national foundations. The nonprofit group is launching JumpStart America, another nonprofit -- with a separate board of directors -- that will help other communities attract funding and create jobs at high-growth companies.
View full sizeScreen shot of Startup America PartnershipJumpStart Inc. is an early participant in a public-private endeavor that includes Intel, IBM and Facebook.
On Monday, the Obama Administration announced Startup America, an effort to create high-growth companies and new jobs faster. In tandem with that announcement, a collection of private-sector partners, including JumpStart, banded together with plans to support early-stage businesses.
JumpStart will launch a new nonprofit, called JumpStart America, to raise $2 billion during the next decade for investments in start-up companies and communities across the country.
This effort could bring Northeast Ohio more recognition and the chance to attract investments in local companies from national foundations.
"Our hope is that three to five years from now, everybody in the country would know that Cleveland is a national center for this kind of work," said Ray Leach, JumpStart's chief executive officer.
JumpStart America will be based in Cleveland, run by Leach - at least initially - and governed by a separate board of directors. The nonprofit will build on work that JumpStart already has started with the federal government.
Since 2004, JumpStart has relied on a blend of public and private money to provide support and initial investments to early-stage businesses in Northeast Ohio. The local nonprofit will continue to do that.
But last year, JumpStart received a $2 million grant from the Commerce Department to help other Midwestern communities design their own programs for supporting entrepreneurs and early-stage companies. The John S. and James L. Knight Foundation and the Surdna Foundation, which are supporting a $40 million effort to create entreprenurial hubs in the Midwest, contributed matching funds.
JumpStart is providing consulting services in Minneapolis-St. Paul, Minn.; and Gary and Fort Wayne, Ind. Within the next two months, JumpStart plans to launch similar efforts in Duluth, Minn.; Detroit; and Akron, Leach said.
It is unclear whether JumpStart America will take on these efforts, or whether the new nonprofit simply will focus on connecting national funding sources to entrepreneurial organizations - including JumpStart - that are seeking money.
"While the specifics of the program are not altogether clear at this point, what is clear is that there's a recognition that there's something good going on in Northeast Ohio," said Brad Whitehead, president of the Fund for Our Economic Future in Cleveland. "It's an exciting moment for us to be a beacon to the rest of the nation on the issue of entrepreneurship. ... It's just good marketing for the region."
JumpStart is one of roughly a dozen participants in the Startup America Partnership, a private-sector effort to link entrepreneurs, corporations, universities and foundations. The partnership, a new, national nonprofit, is being funded by the Case Foundation and the Ewing Marion Kauffman Foundation. Steve Case, the co-founder of AOL, is the partnership's chairman.
Other early members of the Startup America Partnership include Intel, which will invest $200 million in start-ups this year; IBM, which will invest $150 million; Hewlett-Packard, which will invest more than $4 million; and Facebook, which plans to debut Startup Days, a series of 12 to 15 events for entrepreneurs around the country.
The partners are focused on supporting firms that average double-digit growth for several years, regardless of what industry they are in or what region they hail from.
The Obama Administration's effort, the newest chapter in a push to be more business-friendly, blends cheerleading for start-ups with efforts to help young companies find money and grow. Monday, the White House announced plans for small-business assistance programs and tax incentives meant to loosen access to cash for companies.
Several ideas, including permanent elimination of the capital gains tax on certain small business stock, will be included in the administration's federal budget proposal in mid-February. The Small Business Administration said Monday that it will commit $2 billion during the next five years as a match to private-sector investment in high-growth companies.