1Mby1M Virtual Accelerator Investor Forum: With Bill Baumel, Managing Director of Ohio Innovation Fund (Part 2)

Sramana Mitra: You said earlier that your preferred funding round is Series A where you put in a million or so in that round. In some cases, you do some seed investment. Could you talk about how Ohio entrepreneurs are getting to Series A? Is there a seed ecosystem that is supporting or is there more of a bootstrapping tendency or bootstrapping culture that is going straight to Series A?

Bill Baumel: There is a little bit of both. There is a legacy government partnership model. We don’t have any government fund ourselves. For example, one of our companies exited for $400 million after raising just $10 million. That’s in the Appalachian portion of Ohio. As we have more and more exits, there are more angels around. There is a lot of bootstrapping as well. We do go back to the seed round as well and provide the initial capital.

For example, we’ve spun a cybersecurity company out of Ohio State. The founder is actually a Ph.D. from MIT. With a few hundred thousand dollars, they got the product done. With the next seed money, they landed the next 25 customers. On basically a million or so total, we now have a company with 25 people and 30 customers. We do that seed-stage selectively. There is a decent and robust angel network starting to develop.

Sramana Mitra: The MedTech company that has had a solid exit, what path did that travel?

Bill Baumel: It was bootstrapped for a number of years. It was bootstrapped with some local angel investment. Then we came in as the first institutional investor and did the bulk of that. We brought a few of our partners into that and took that to about a hundred million dollar run rate.

Sramana Mitra: What is their business?

Bill Baumel: It’s in cold-chain logistics.

Sramana Mitra: Geographically, where is the bulk of the entrepreneurial work happening in Ohio?

Bill Baumel: There is a decent amount of advanced manufacturing in Athens particularly applied to MedTech. Within Columbus, there is a bit of enterprise software, data science, cyber security, and SaaS. There is DAtAnchor in the cyber security area. Aware is here where we had a single-digit pre-money valuation on about three years ago. Goldman Sachs just led a round about 10 to 15 times our initial valuation and put in about $40 million in Series C.

The Mason area of Cincinnati has quite a bit of MedTech activity. We have a company called Enable Injections there that does on-board drug delivery. We have another company that does scanning for diagnosing heart diseases. There’s SaaS there as well. With P&G in Cincinnati, there is a little bit more consumer type of tech there. What I forgot to mention about Columbus as well is there is a robust biotech community here.

Cleveland has the Cleveland Clinic and is very strong in MedTech. One of the companies we exited was an HR tech company in Cleveland providing SaaS-type onboarding. That was a nice exit. We also have a fintech company up in Cleveland that is in the embedded finance area.

When I mention some of these companies, we have a lot of our partners get involved closely. We have strategic partners get involved closely because they like what we’re doing. Also, invest in companies. Sanofi led Series B in Enable Injections. We have a great relationship here in Columbus with Microsoft and Slack. Immuta has great relationships with Snowflake and Databricks.

When you combine all the three – Cleveland, Columbus, Athens – there are some good activities. There’s also Dayton with the Air Force Research Labs there. There is a pretty robust environment developing here. It’s a lot different from when I started five years ago. It has turned out to be a great experience.

This segment is part 2 in the series : 1Mby1M Virtual Accelerator Investor Forum: With Bill Baumel, Managing Director of Ohio Innovation Fund
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