Why Central Ohio Has Sparked Startup Success In The Midwest
Originally posted on Crunchbase.
As venture investors and support systems push into the heartland from concentrations on the coasts, some regions are seeing more of a surge. One of the cities putting startups on the map is Columbus, Ohio. This isn’t accidental; at Rev1 Ventures, as an investor startup studio, we have a specific recipe. It’s the culmination of a decade of work.
Collaboration and regional resources accelerate success
Our formula leverages our region’s unique assets to meet our region’s specific needs. Advisory services paired with early investment capital shorten time to market and a startup’s path to profitability.
- Investing more at an earlier, riskier stage builds deal flow. We review more than 1,000 inquirers each year, advance more than 500 pre-clients, and actively engage more than 130 as clients through our Investor Startup Studio model. Without an intense focus on pre-seed- and seed-stage companies, there couldn’t be enough startups to drive a pipeline of scalable companies here.
- Rigorous market validation derisks the pipeline. A suite of interconnected education and advisory services mitigate business risk based on each individual startup’s needs, fostering a client survival rate of 60%. This is significantly higher than the 50.3% five-year rate for companies founded in 2016 as provided by US Bureau of Labor Statistics.
- We were recognized as one of the most active seed investors in the Midwest by PitchBook. Our funds are top-tier performers in their categories. With a network of over 200 co-investors from 32 states and eight countries, we’ve attracted approximately $2.9 billion of investment capital and grants since 2013. Last year, 30 companies had rounds of $1 million or more.
- 60-plus intensive and structured partnerships connect startup companies to central Ohio’s corporate base and research institutions. Partners provide critical market feedback, access to first customers, strategic relationships and infrastructure to innovate. Close work with research institutions has produced 145 distinct spinoffs since 2013.
- Rev1 Labs Innovation Center provides 68,000 square feet of much-needed infrastructure. The facility houses up to 50 startups that raise more than twice the funding of nonresidents, proving that density and proximity matter to young companies.
Inclusive entrepreneurship is the cornerstone of our culture
Gartner predicts that businesses with diverse and inclusive cultures are 75%more likely to exceed financial targets. Our diversity rate of active clients is 60%; the diversity of our portfolio is 56%. In the midst of 2022’s intensively competitive talent environment, our methods are delivering extra dividends.
The challenges that underserved founders face when building their businesses are many: lack of friends and family funding; lack of pipeline and connectivity to hire diverse talent; and lack of awareness and access to networks and support. Our Diversity Equity and Inclusion Grant Fund provides salary and benefits for six underserved founders for up to one year so they are able to dedicate their time and focus on building their businesses.
Amidst the pandemic, we launched (virtually) the Innovation Internship Program to build a more diverse talent pipeline. In just two years, 52 startups have filled more than 330 roles with 66% diversity.
Midwest’s framework of collaboration continues to work
When the turbulence of 2022 hit, we rapidly pivoted, providing leadership and flexibility that helped our client companies to also pivot and survive. We are providing the same guidance and agility with inflation running virulent and business contraction a threat.
Companies are responding with the same market validation rigor that they mastered derisking their businesses in the first place. Whatever economic headwinds blow, we have learned how to build scalable, sustainable companies connected to our corporate and innovation base.