Archive for the ‘Fund For Economic Future’ tag
This post began as a comment to one of Roldo’s posts over on RealNEO. Roldo always makes me think and I thank him for that and for bringing Jump Start to mind. And may I say that I am quite proud of Ronn Richard and The Cleveland Foundation’s Board of Trustees willing to question how thinks are shaping up over there at The Fund For Economic Future. When will the powers that be see that asking questions is not a threat, it is “the Socratic Method”.
First, It is interesting to note that The Cleveland Foundation is taking heat because they are no longer in lock step with how the Fund for our Economic Future is headed. It appears that FFEF straying from its mission helped Cleveland Foundation revisit its own and find that they themselves were straying. I found it amusing that The Plain Dealer jumped on The Foundation just as it has bloggers, public officials, businesspeople and others who are not in lock step with the GCP.
Let’s follow the money– the Third Frontier Funds are fronted by Ohio taxpayers. Fund for Economic Future receives funds and distributes said funds to Jump Start, Nortech, MAGNET, TEAMNEO ETC. Jump Start for example chooses a start up to fund after friends, family, credit cards and savings of entrepreneur are exhausted and the future of the dream and local employees are at risk. Here is where Norm’s point of equity shares come into play. Jump Start funds company to get it over the hump. When start up moves to Early Stage. At this point, Jump Start steps back because company should be sustainable. If not, company dies or if the company is sustainable but needs an influx of capital to expand and grow venture capitalists agree to fund for equity shares. Company soon is no longer the entrepreneur’s. Many say that not all entrepreneurs are meant to be CEOs, and this is true butventure capitalists do not always have a community in mind. To them, a company that served a community can move elsewhere because human capital is everywhere. not so, with an entrepreneur who built a company in a specific geographic area.
I have three questions: Why are taxpayer’s now fronting funds that venture capitalists once provided? With the FFEF now branching out into Effective Government Now are we tying government and economic development together, and should we? Are Ohio texpayers facing undue risk by underwriting eonomic ventures?
I know that this is a rather simplified version of how I perceive the taxpayers in our state again taking the risk for the private sector. I am a believer in balance, and when I see and read about these issues I see something that is very off kilter.