Bob Coy, president and CEO of CincyTech, discusses the structures of the for-profit seed stage investment funds under management by CincyTech. They have $30 million under management across three seed funds – half of which comes from the state-funded Third Frontier program. Bob shares that once a company is funded by CincyTech, the organization takes a seat on the board of directors and has access to services provide CincyTech and its partner organizations.
Bob continues the conversation by discussing the types of companies they target and the investment process that includes pre-investment services and that allows them to due diligence on the company while helping them reach a stage that could make the company viable for CincyTech funding and follow-on investments. Bob shares his insight on how the organization has built a network of investors that invests alongside CincyTech and provides their expertise to startups.
Bob concludes the conversation by providing his insight on how to build a strong investment team that includes successful entrepreneurs from a diverse number of industries and why this is vital for the success of venture development organizations and its client companies. Bob also provides some great advice to organizations looking into launching a seed stage fund:
- The organization must have the right team in place;
- Have an investment thesis that makes sense for your funds;
- Work with companies during the pre-investment stage to get them ready for an investment;
- Bring in outside experts to not only invest capital, but validate your judgement; and,
- Don’t just write a check and walk away; the organization has to continue to work with them toward a liquidity event.
CincyTech is a venture development organization whose mission is to drive talent and capital into promising startup companies in Southwest Ohio. Supported by grants from the Ohio Third Frontier, with matching grants from corporations, foundations, and local governments, CincyTech has $30 million under management across three for-profit seed funds and one follow-on fund. Since investment began in 2007, CincyTech has analyzed more than 3,000 inquiries, assisted 319 companies and invested in 52 companies, helping portfolio companies raise another $405 million in follow-on funding. The companies have generated $99 million in revenues and currently employ 609 people. Learn more…
About the Excellence in TBED awards
The SSTI Excellence in TBED awards recognize exceptional achievement in addressing elements that have been found in successful tech-based economies. These include a research base that generates new knowledge, mechanisms for transferring knowledge into the marketplace, an entrepreneurial culture, sources of risk capital, and a technically skilled workforce. For more information visit: http://www.sstiawards.org.