This evening, former Kasich senior advisor and InvestOhio founder Mark Kvamme will speak about attracting venture capital to the Midwest at the Northeast Ohio Entrepreneurship Expo. Here’s a look back at Kvamme and Kasich’s attempt at a venture capital model for Ohio – including decreasing the state’s venture capital investments and falling $400 million short of their 2013 goal.
Before Kasich Entered Office, Ohio Saw a Major Jump in Venture Capital: “According to the most recent Ohio Venture Capital Report, venture capital activity in Ohio was up more than 80 percent in 2010, surpassing the national average, which was up only 20 percent.” [Crain’s Cleveland Business, 7/16/2012]
InvestOhio Was Then Created by Kasich and Mark Kvamme, and Was Never Subject to Any Legislative Debate: “When Ohio House and Senate members gathered in June 2011 to iron out differences in their proposed state budgets, Gov. John Kasich introduced a policy that hadn’t been a part of anyone’s budget, including his own. It was called InvestOhio, a program Kasich and Mark Kvamme had been working on for months to offer tax credits to people who invest in small businesses in the state. InvestOhio received no hearings in either chamber as part of the budget, but it found its way to Kasich’s desk as part of the final budget passed out of a House-Senate conference committee. ” [The Columbus Dispatch, 6/10/13]
Venture Capital Investments in Ohio Have Decreased Since InvestOhio Was Created: “There were 85 equity investments by venture capital firms in Ohio companies last year for a total $317 million, according to a quarterly and year-end report from PricewaterhouseCoopers LLP and the National Venture Capital Association. That was up from 61 deals for $304 million in 2012, but down in dollar volume from the 75 deals and $438 million seen two years ago.” [Columbus Business First, 1/6/2014]
Two Years Later, InvestOhio Has Not Even Issued Single Tax Credit: “And whatever happened to InvestOhio, anyway? Troy Patton, program administrator forInvestOhio, said there have been 2,776 applications for a 10 percent tax credit on about $600 million in investments. The credits have not yet been awarded because investors must hold on to their investments for at least two years.” [The Columbus Dispatch, 6/10/13]
Last Year, InvestOhio Fell Four Hundred Million Short of Goal: InvestOhio was “expected to generate at least $1 billion in new private investment in Ohio small businesses by 2013.” [Ohio Development Services Agency]