Rocket Ventures fund changes outreach, ownershipWritten by Duane Ramsey | | firstname.lastname@example.org
Rocket Ventures LLC, a local venture capital fund, has committed to expand its outreach and opportunities across the entire 18-county Northwest Ohio region with a change in ownership and leadership in 2014.
The Regional Growth Partnership (RGP) and University of Toledo Innovation Enterprises (UTIE) have agreed to end their joint venture with Rocket Ventures. RGP now serves as the sole owner of Rocket Ventures LLC.
In another development, Bob Savage has agreed to serve as president of Rocket Ventures. Savage will continue to manage the Rocket Ventures fund with his associate Ben Trumbull as they have in the past.
Rocket Ventures will draw greater participation and investment from throughout the region by removing the perception of the entity being tied too closely with Toledo and UT, according to Harlan Reichle, chairman of the RGP board of directors.
“Our mandate from the State of Ohio is for Rocket Ventures to service the entire region. Some feedback we received indicated Rocket Ventures as being Toledo centric,” Reichle stated in the joint press release from RGP and UT announcing the change.
“It made sense for it to come back to RGP. We see it as a positive move to enhance the regional perception and collaborative partnerships. We’re very excited about it,” said Dan Slifko, chief operating officer of Rocket Ventures, who has been involved in the fund since its inception.
Rocket Ventures was established in 2007 as a $22.5 million pre-seed, early-stage venture capital firm operating under RGP. Funding for Rocket Ventures came from $7 million in private investments and $15 million in grant money from the Ohio Department of Development’s Third Frontier Program.
Of that original $15 million, $9 million was earmarked for operation of the fund which expired in 2012 after five years and $6 million that went directly into the venture capital fund.
The $7 million in private investments met the matching funds required by the State of Ohio. It came from 46 collaborative investment partners, both individuals and mid-size corporations, representing all 18 counties in the NW Ohio region, reported Slifko.
The intent of the joint venture in 2011 was to combine the talent and business expertise of RGP’s Rocket Venture program with UTIE’s physical incubation space and tech transfer division. The joint venture operated as Rocket Ventures LLC until the recent divestiture of UTIE’s investment in the fund.
“UTIE will continue to work closely with the Regional Growth Partnership as an important community partner dedicated to the economic development of the region,” Rick Stansley, chair UTIE’s board of directors, stated in the announcement.
Both Savage and Slifko indicated that they expect to continue working with UT when it is appropriate. Savage said that several UT officials have expressed a desire to continue a relationship with Rocket Ventures.
The firm received a $2 million grant as the operating budget for the fund in 2013 and 2014 as one of the six regions in Ohio funded by the Third Frontier Program. All six regions are expected to apply for grant money to continue funding operations in 2015 and 2016, said Slifko.
The final results for 2013 are incomplete but Slifko reported that 45 companies were supported by Rocket Ventures with grants, loans, dollar investments and/or services from its staff of five individuals. Of those 45 firms, 19 are portfolio companies in which Rocket Ventures has invested directly from the $13 million fund.
In 2013, those 45 companies generated $45 million in sales, $18 million in payroll, and received $18 million in non-state investments from other sources. Maumee Assembly & Stamping in Maumee is a Rocket Ventures services client that has 100 employees.
Venture Med, a local medical device firm developing a vascular prep instrument, is one of the 19 portfolio companies operating with investments from Rocket Ventures, Slifko reported.
Since the first investment was made by Rocket Ventures in 2008, the program-to-date results include $133 million in sales, $74 million in payroll, $102 million in investments and $34 million in grants. During that period, those companies paid $9 million in sales tax and payroll income tax, according to Slifko.
“That’s a total of nearly $350 million in economic impact in the NW Ohio region with 335 fulltime jobs created by those 45 companies. It really was a tremendous program funded by state and private investments,” Slifko said.
“We’re coming to the end of the first Rocket Ventures fund,” said Slifko, who expects all funds to be committed or invested by the end of 2014.
The question remains…Will there be a Rocket Ventures II fund?
“We would like to raise more private money to fund Rocket Ventures II,” Slifko said.
Tags: arlan Reichle, chairman of the RGP board of directors, Dan Slifko chief operating officer of Rocket Ventures, Maumee Assembly & Stamping, northwest ohio, Ohio Department of Development’s Third Frontier Program, Regional Growth Partnership (RGP), Rocket Ventures LLC, University of Toledo Innovation Enterprises (UTIE)