A Cleveland nonprofit has pledged half a million dollars to 20 different tech startups run by women or minorities through a public-private source called The Focus Fund.
The partnership is led by Cleveland-based non-profit JumpStart alongside the Ohio Third Frontier, The Case Foundation and Cuyahoga County.
Eligible tech businesses must be headed by women or minorities of African American or Latino descent, a group that currently receives only 3 percent of all venture capital dollars, according to JumpStart CEO Ray Leach.
“But now the whole entire industry has recognized to that maximize profitably, you need diversity.” Leach told newsnet5.com.
Leach said that JumpStart’s investments have historically included about 30 percent women and minority-owned businesses. He said they decided to raise a fund that is 100 percent dedicated to support that group because it’s an innovation opportunity and a model for other funds across the U.S.
Leach said Charu Ramanathan, a local tech medtech company founder, set a perfect example for the goals of the fund.
Ramanathan founded CardioInsight, which created a non-invasive heart mapping technology.
Ramanathan told newsnet5.com the project started while she was a graduate student at Case Western Reserve University and grew into a full-fledged startup with the help of an early stage investment from JumpStart in 2005.
“I’ve dreamed of this moment since the day we started this company,” Ramanathan said of CardioInsight’s success.
But she said that her gender presented some challenges in early stages of the company.
“There is definitely more confidence in males leading business enterprises,” Ramanathan said.
She’s glad JumpStart took a chance on her and told newsnet5.com she’s thrilled to learn about the goals of the Focus Fund.
“Funds like the Focus Fund, especially for women that are newer to this environment, can really be the spark plug that gets this going,” she said.
Ohio-based businesses like CardioInsight will be favored by the fund, but other companies will also be given consideration if they agree to relocate to the state.
“We’re using this as an attraction tool to bring great entrepreneurs to Ohio who maybe aren’t necessarily here today,” Leach explained.
Leach said a move to Ohio would need to “make sense” for the company in order for it to be considered.