August 18, 2013
Recently, Cintrifuse, the Cincinnati-based, startup-focused, nonprofit organization, held a discussion with members from the local startup community. The meeting’s purpose was for Cintrifuse to hear directly how it can help on the local front. Instead, the discussion became an effort to try to answer the question: “What the heck is Cintrifuse?”
This is a frequent question in Cincinnati, and one that the organization itself has struggled to answer. Since it was founded, there has been some confusion in the community about what Cintrifuse does and where they fit into the Cincinnati startup scene. To be fair, Cintrifuse itself is a startup. Not only is it a startup, but it is also a completely new model for building a startup community. It should be forgiven for not having all the answers from day one – what startup does?
Coming onto the scene more than a year ago, Cintrifuse is the creation of the top corporations in the Cincinnati region such as P&G, Western & Southern, PNC Bank, and Duke Energy. Its mission is to create a sustainable innovation ecosystem in the region by increasing both the number of venture-worthy companies and the amount of risk capital available. That is the high-minded answer to the question. From a local startup perspective, the answer is not so easy to come by. Initially all the major press and sound bites regarding Cintrifuse during its first months concerned the “fund of funds.” The actual startup makers and founders were unclear as to what this organization would specifically offer them. As fund of funds manager (and ShareThis founder) Tim Schigel stated at the meeting, “Cintrifuse was built by the community for the community, but until recently, the maker community and other stakeholders had not really been involved.”
Cintrifuse has three components: the fund of funds, a physical working space, and providing access to its network. The $51 million-plus (and growing) fund of funds is to be used to invest in other venture funds around the nation in an effort to get more of those funds interested in funding startups in the Cincinnati region. There is no quid pro quo arrangement, but Cintrifuse does ask the funds it invests in to create an investment plan for the Cincinnati region. This can mean actual financial investment or bringing other resources that further engage with the region. This is modeled heavily after the successful Michigan Renaissance Fund that has roughly yielded a 15-to-1 return on investment and is one of the many reasons for the growing success of the Michigan startup scene – Detroit bankruptcy aside.
Where there is reporting on big companies and big money, it is easy for the impression to emerge that there is no grassroots focus or hyper-local initiatives. This is where the second and third components of Cintrifuse come in – and surprise. Not only does Cintrifuse want to enable startups, but it is also investing serious time and money to make it happen. It has taken on the effort to create a vibrant coworking space, increase visibility of startups by openly promoting them within the Cintrifuse corporate network, as well as lead and host startup- and tech-related educational and social events.
Currently Cintrifuse is located in a non-descript downtown office building. It recently gained approval from the city for a $4.5 million grant to build a new campus in a redevelopment area of downtown. The vision for this campus is to make it the epicenter of startup energy within the city, where founders, accelerators, investors, and service providers can work collaboratively. The final price tag for the campus is around $14 million and could ultimately house (though independent from Cintrifuse) the likes of The Brandery and CincyTech.
Because of its corporate roots and its leaders, Cintrifuse offers startups something no other organization or city can – access to some of the market leaders in consumer research, branding, and design. “Cintrifuse has helped my company by connecting us to two powerful relationships. In one case it lead to our first beta client; in the other case it lead to a strategic relationship with a leader in our marketplace that has helped us gain an advantage over our competition,” explains Jeffrey Shepard, founder and CEO of Medacheck, a Cintrifuse-based startup. “Without those relationships, our business would have taken longer to develop and prosper.”
By using the fund of funds to garner investment interest in the region along with its local presence and focus, Cintrifuse hopes to bring serious energy and catalysts for growth to the region. As CEO Jeff Weedman explains it, “Cintrifuse is about aligning and strengthening the local financial capital, intellectual capital, and innovation capital.” Innovation capital is best described as the combination of new forms of human capital such as idea generation, creativity, entrepreneurship, and relationships. Its network and relationships is a key asset that Cintrifuse offers startups.
But like any startup, the devil lies in the execution and one year is simply not enough time to learn if Cintrifuse can be called a success. The vision is grand and its talent is unquestionable, but executing on its mission will take more time. And it will not be able to succeed on its own. In fact, much of its success will be directly linked to the involvement of the key stakeholders in the community. After all, as has been demonstrated elsewhere, a startup community is most successful when led by its startup founders. Cintrifuse is building the engine, but the fuel is the startup community itself.
As Ry Walker, a successful veteran entrepreneur and now cofounder of Differential, another Cintrifuse-based company, explains, “We all just need to ask for help more. The community members aren’t asking Cintrifuse for help, and Cintrifuse isn’t asking the community to help as much as it should. So if we can instill a culture where everyone feels free to ask everyone else for help more often, and if Cintrifuse can help facilitate that exchange, that would add a lot of value to the community.”
As Cintrifuse matures, it gains in its capacity to execute on its goals and expand its outreach locally. When it began, there were only three people on staff. Today there are eight. It is a startup unlike any other and has had to choose where it focuses its resources. All community stakeholders have a lot to gain by helping to make Cintrifuse a true success story. If it happens, it will be the region’s success story, too.
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