“What value does Cintrifuse bring to our region and to its member startups?”
Let’s start with what matters. Startups are our number one customer.
All the work we do with BigCos, the investments we make in funds (VCs), the relationships we develop with angels and micro-VCs, and the talent we identify and connect is ALL intended to deliver measurable value to our startup members.
To make it clear in terms of how we measure success, there are three main drivers we look at:
- Growth of startups in the region
- Increase of risk capital to the region
- Increase of corporate innovation by our BigCo partners
Are we helping startups grow and mature?
In the fall of 2012, Cintrifuse welcomed its first member startup when Rodney Williams walked away from his desk job at Procter & Gamble and across the street to our original offices on the corner of 6th and Sycamore and got down to work on LISNR.
In December of 2017, we welcomed member 300. Today, we have 316 Cintrifuse members that support 1,117 employees in the Greater Cincinnati region (as of Jan. 18).
Our team is always busy tagging, flagging and tracking down every tech-based startup in our soil — even if they’re not quite ready for Cintrifuse membership (tech-based/enabled, scalable, potentially venture-backable). Today, there are 496 StartupCincy (broad ecosystem) startups (that we know of). Our goal is to see this number grow steadily month/month, year/year.
Prior to 2013, no one was responsible for keeping track of ALL of Cincinnati’s startups, connecting them to each other and delivering ongoing support — smarts and based on readiness — access to customers and investors, too.
Membership with Cintrifuse is about getting startups to the next stage of their maturity, their entrepreneurial journey. Some may just be starting off — with basic needs like space, mentoring and first customers. Others come to Cintrifuse further along their path — looking for enterprise connections, maybe a new CFO or reconfiguring after a pivot. Some of are longest-standing members need much less — using our space for offsites or expanding their reach looking for more customers. Regardless, we’re helping startups at every stage.
Every startup we meet is bucketed into one of five stages. Ideally, we’d like to see a funnel of growth from the first stage to the last over time. Statistically speaking, only about one in 10 startups “make it” so the front end of our funnel will always be larger.
Today our members sort out like this:
- 16.6% — Ideation
- 30.4% — Incubation
- 27.9% — Market Entry
- 7.7% — Product/Market Fit
- 7.7% — Growth & Scale
Are we helping attract risk capital to the region?
We took a chance when we created our Syndicate Fund (a fund of funds) as the central part of our strategy. No one else had built an ecosystem around a fund that invested OUTSIDE of the region they were trying to support. But the risk is paying off. Our first fund is already in the top quartile of performance rankings when compared to other fund of funds, which is happening way earlier than even our rosiest projections.
These efforts result in drawing even MORE capital into the region; not just the funds we’ve invested in. People that once didn’t even know where to find Ohio on a map can now pinpoint Cincinnati and are actively looking at our startups. This counterintuitive plan is paying short-term dividends that will multiply exponentially in the future.
We focus on leverage. Our limited partners (LPs) represent a good chunk of the Greater Cincinnati corporate and community landscape, especially ones with a healthy appetite for innovation. We focus their resources and make investments in VCs all across the country. We look for proven, high-quality partners that are 100-percent-focused on finding the founders, teams, and startups pursuing big markets with a differentiating product or service.
Currently, we have 12 unique fund managers who have invested a combined $1.19B worth $1.94B, as of Sept. 30. We also currently have 477 active companies in our portfolio.
Because of this activity, we have developed a broad network of early-stage VCs — over 300 from around the world that are interested in engaging with Cintrifuse and our network. Their intention? Gaining access to interesting startups and relationships with our BigCos even though they can’t all be part of our Syndicate Fund.
Today, we are feeling the effects of this network’s participation. In 2017, we saw $151 million of capital invested into the region. This growth is substantial when compared to 2012 — the year we began tracking — when just $56.2 million was invested.
Do we deliver innovative technology solutions to our BigCos?
Corporate innovation is our “secret sauce.” It’s the glue that holds everything together at Cintrifuse.
Greater Cincinnati is home to eight Fortune 500 companies and over 100 growing corporations ($100 million in revenue and above) — many deeply engaged with Cintrifuse.
Our BigCos understand the role technology plays in their growth and efficiency and how their landscape is constantly being disrupted. To the degree we can engage them, there is potential to connect our Innovation Champions (how we refer to our individual partners) to the passion, smarts and capabilities of our startups. The goal is a mutually beneficial relationship – BigCos win by solving a sticky issue and the startups win by gaining a new customer.
Additionally, working with hometown startups helps BigCos beyond just their innovation challenges. A healthy startup ecosystem means there is a deeper talent pool at home, a vibrant community of startups and an active network of investors.
One way of measuring how successful our efforts are with BigCos, is by tracking pilots – paid contracts between BigCos and startups. How many times did Cintrifuse facilitate a connection that resulted in dollars exchanged between these two important stakeholders?
To date, we’ve facilitated 93 pilots — resulting in $1.4 million returned to startups since the inception of our Customer Connections program. That’s $1.4 million back into the local economy, money that can be spent on attracting and hiring high-quality talent. Back in 2014, when we first began tracking, we saw 10 closed pilots resulting in $100,000 exchanged. In 2017, we closed 34 pilots totalling $791,000. We’ve come a long way.
But that ‘outside-in’ approach is just one component of our corporate innovation portfolio. Spry Labs inverts this process. They’re a venture building studio and start on the inside of BigCos and find solutions to pull out. Spry is a not just a source of inspiration for our corporate partners, it’s also a way to attract top talent who are not intimidated by the biggest challenges. Think of them like storm chasers who run towards the challenge, not away from it.
Cintrifuse has made strides in many areas since our inception, but we’re not losing sight of the value we bring to our region. We’ll continue to serve our number one customer — startups and entrepreneurs, and we look forward to the continuous process of building a sustainable, tech-based economy.