The 270 startups who responded to a survey conducted by JumpStart spent $777 million on labor and other goods and services in Ohio last year — nearly triple the $279 million figure from the 2014 survey.
Those companies, who work with JumpStart and 14 other local organizations that receive state funding, also employed 2,313 Ohioans in 2015, up from 1,490 last year, according to economic impact reports based on those surveys.
So some of those businesses must be growing by massive leaps and bounds, right? True, but least a few larger startups that didn’t respond to last year’s survey submitted data this year.
Even so, some of the businesses that responded are definitely growing. The best evidence is on the last two pages of the 2015 report, which was put together by Cleveland State University.
That section analyzes data submitted by 42 companies who have responded to the survey for five years in a row. Those companies added 218 employees in Northeast Ohio last year and 643 people throughout the state. (The numbers in the tables on those pages are even bigger, because Cleveland State uses common economic formulas to estimate the impact that these companies have on their suppliers and the broader economy.)
So why are local organizations generating economic impact in other parts of the state? For one, the survey was sent to companies that have received investments from North Coast Angel Fund, which occasionally invests in startups outside of Northeast Ohio.
Plus, some companies that work with JumpStart and other organizations have operations in other parts of the state.
For instance, JumpStart is an investor in a company called CoverMyMeds, a fast-growing health technology company that employs more than 400 people, mostly in Columbus (it also has a new office in Highland Hills). And North Coast Angel Fund is an investor in Assurex, near Cincinnati. That gene testing company is fast approaching 500 employees, according to North Coast Angel Fund executive director Todd Federman. Assurex had 220 employees in October 2014, according to media reports.
Did either of those companies have an impact on the survey? JumpStart won’t say.
The growth is occurring because many of the startups are now mature enough to start scaling up, according to JumpStart CEO Ray Leach.
“Now they’ve hit the hockey stick,” he said.
But like we said, some businesses who didn’t respond to the survey last year responded this year. That’s one reason why the overall employment and spending numbers are so much higher than last year’s numbers (the report refers to the spending numbers as “output”).
In a news release that came out today, July 15, Leach said the report confirms “a suspicion we’ve had for some time that [the startups] were generating significantly more impact than we were tracking.”
But “quite a few companies” here and throughout the state did grow significantly last year, said Candi Clouse, a program manager at the Center for Economic Development within Cleveland State’s Levin College of Urban Affairs.
“This is the tipping point that we’ve been hoping to see for years,” she said.
The 270 startups have at some point received assistance from at least one of 15 local organizations affiliated with the Ohio Third Frontier’s Entrepreneurial Signature Program, which funds services for entrepreneurs.
In addition to JumpStart and North Coast Angel Fund, the other organizations are: the Akron Global Business Accelerator, BioEnterprise, BioHio Research Park, Braintree Business Development Center, Flashstarts, Great Lakes Innovation and Development Enterprise (GLIDE), The Incubator at MAGNET, Northeast Ohio Medical University, Ohio Aerospace Institute, Ohio Agricultural Research & Development Center, Tech Belt Energy Innovation Center, University of Akron Research Foundation and Youngstown Business Incubator.