As published in the March 1, 2010 Toledo Business Journal
Greg Knudson
Regional Growth Partnership
and
Rocket Ventures
Funds available for new product ventures
Toledo Business Journal recently interviewed Greg Knudson, vice president of technology, Regional Growth Partnership (RGP) and director of Rocket Ventures. He shared the following thoughts.
Toledo Business Journal: Can you discuss equity capital funding that established area manufacturers and others might obtain from Rocket Ventures for new product / venture financing?
Greg Knudson: Rocket Ventures is an early-stage venture capital fund focused on accelerating the commercialization of technology-based companies in northwest Ohio. These tech-based companies come to us as individual entrepreneurs and inventors as well as spin-off companies from existing manufacturing companies and university research programs.
Rocket Ventures provides three critical resources in helping our companies succeed:
- Business management resources with a team of business professionals
- Capital resources in the form of investment capital
- Networking resources, including local area professional service professionals and manufacturing partners and collaborators
TBJ: Can an existing manufacturer receive funding from Rocket Ventures for a new product venture? How is this structured?
GK: A technology spin-off opportunity from an existing manufacturing company is an important element in our strategy. Rocket Ventures is currently involved with several opportunities, which involve tech-based spin-offs from small, mid-sized, and even large corporations. Each of these spin-off opportunities must first meet our selection criteria, including location in northwest Ohio, scalability, technology, intellectual property ownership, and early-stage technology.
The process is simple: each spin-off must then establish a separate entity in the form of an LLC or S corp. Once this is established, Rocket Ventures then assesses the needs of the spin-off. This assessment focuses on technology and business validation, the management team (including apparent gaps), financial requirements to take to the next level (Ignite! Development Grants and potential investments), and analysis of possible collaborators.
In effect, we develop a work plan with a set of milestones to accelerate the commercialization process. Again, we look to work with spin-off opportunities as they often have a higher potential for success due to the amount of work performed on the technology within the corporation.
TBJ: Explain how this would be structured and any requirements involving business spinoff.
GK: Rocket Ventures is always interested in identifying and working with tech-based startup companies that offer promising technology and business potential. However, Rocket Ventures has developed a set of criteria for establishing a working client relationship. Our criteria to work with companies are: location in northwest Ohio, early-stage company, scalability – with sales potential reaching $30 million to $50 million, technology focus (advanced manufacturing and materials, biosciences, and alternative energy), and intellectual property (patents / copyrights).
TBJ: Lockrey Manufacturing, Inc. has worked with your organization involving a business development initiative. Can you share information about this effort?
GK: Rocket Ventures has formed collaborative relationships with many local area manufacturing companies and service providers. Lockrey Manufacturing is an excellent example of such a relationship. Lockrey works with Rocket Ventures clients in providing engineered prototype parts as well as initial, low-volume manufacturing services. This type of partnership provides high quality and affordable support of early stage products.
Another great example of regional collaboration is a company called Pinnacle Technology Group, Inc., managed by Rick Wasserman. Pinnacle provides electronic design, engineering, and manufacturing to several of our startup companies – most notably in the medical device arena.
And we are also collaborating with existing companies, which offer mature distribution networks so vital to our start-up client go-to-market strategies.
TBJ: Can you explain the Ignite! Development Grant fund and how this might assist area manufacturers and others with new product / venture development?
GK: Rocket Ventures has a very unique and important element in its program called the Ignite! Development Grant. This special grant is awarded to very promising client companies and helps kick-start the commercialization process of these selected companies. These awards are up to $50,000 and focus on activities such as in-depth marketing analysis, prototype development, beta site testing, and business or technical validation. Rocket Ventures has already awarded 26 Ignite! Development Grants valued at over $1.3 million.
TBJ: Can you discuss the management services support that Rocket Ventures provides to clients?
GK: While access to capital is a critical component of company growth and development, having available high-level business management expertise is equally important. Rocket Ventures has a team of business professionals who provide hands-on, localized support, mentoring, and coaching. In fact, many of our companies are managed on an interim basis by members of the Rocket Ventures team. Additionally, our team helps prepare companies for success by offering business planning development, financial modeling, marketing and sales expertise, and grant writing and fundraising support.
TBJ: Can you provide an update on the number of client companies, new investment, and jobs created by Rocket Ventures to date?
GK: Rocket Ventures has started up 63 tech-based companies since January 2008. These companies have benefitted from our business management support, Ignite! Development Grants, and large-scale capital investments. Rocket Ventures has already made nine investments and plans to make 15 to 20 additional investments over the next several years. Our investments range from $250,000 to $1 million per company.
Moreover, Rocket Ventures clients have already shown significant successes – with over $36 million in financial return to northwest Ohio – as measured in: co-investment dollars (other than Rocket Ventures), sales revenue dollars, licensing fee dollars, and Federal and State grant dollars.
TBJ: Are there any other issues you would like to address?
GK: Rocket Ventures is off to a very strong start and plans to continue growing tech-based companies and creating wealth and knowledge-based jobs in northwest Ohio. If a company has an interesting technology, which needs dedicated management and development, please contact me at gknudson@rgp.org or 419-704-2255.