Ohio draws more venture capital: Study shows innovative investors supporting 184,000 Ohio jobs in 2005

BYLINE: Paula Schleis, The Akron Beacon Journal, Ohio

Apr. 17--Once a fly-over region for venture capitalists in search of exciting investments, Ohio is increasingly looking attractive to folks who have money to spend on innovative businesses.

The number of Ohioans employed by venture capital-funded companies grew from 173,000 in 2003 to 184,000 in 2005, earning the state 14th place on a list compiled by the National Venture Capital Association.

And among the top 15 states, Ohio's employment gain over the two years earned the state a sixth-place ranking for job growth related to venture activity.

However, Ohio did not make the top 15 in terms of total revenue and two-year revenue growth for companies supported by venture investments. (The organization cites only the top 15 in each category.)

An unrelated study last month commissioned by the regional economic development group NorTech indicated that Northeast Ohio is getting a fair share of the attention.

From 2004 to 2006, 97 local companies shared $500 million in venture capital -- 60 percent of which came from firms outside Ohio, the NorTech report said.

"These findings from the NVCA reaffirm our belief that venture capital investments in Ohio are having a positive and growing impact on our regional economy," said James Ireland, chairman of NorTech's Venture Capital Advisory Task Force.

Nationally, companies supported by venture funds employed 10 million people and had $2.1 trillion in sales in 2005. That's a 4.1 percent growth in jobs and an 11.3 percent growth in sales from 2003, outperforming their nonventure-backed private counterparts, which saw employment grow 1.3 percent and sales grow 8.5 percent in the same period, according to the NVCA.

California had the most employees at venture-backed companies, its 2.2 million jobs more than twice as many as second-place Texas. Pennsylvania had the most growth in employment, a 14.7 percent gain in two years (also more than twice the rate of second-place Texas.)

The entire report, Venture Impact: The Economic Importance of Venture Capital Backed Companies to the U.S. Economy, is online at www.nvca.org/pdf/NVCA_VentureCapital07.pdf.

Paula Schleis can be reached at 330-996-3741 or pschleis@thebeaconjournal.com.

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