Sramana Mitra: Do you have preference between B2B or B2C?
Bill Baumel: Twitter and Facebook have shown that you can make a lot of money on B2C. My background is on the B2B side. We do have one B2C technology company that’s in the financial payments area. Most of the other companies are B2B SaaS, cybersecurity, and data science.
Sramana Mitra: Let’s double-click down into your ecosystem. What are the numbers in Ohio? How many startups are operating in Ohio? You can include venture-fundable as well as bootstrapped startups. We are a huge supporter of bootstrapped startups as well.
Bill Baumel: Absolutely. Ohio has a number of very strong angel organizations including the Ohio Tech Angels Fund. The state has also funded entrepreneurial programs such as Jumpstart in Cleveland and Rev1 in Columbus. They do seed-stage financing. There’s robust seed-stage investing and there are a lot of bootstrapped companies as well. There are lots of companies – probably 300 to 500. There’re also quite a few bootstrapped companies.
We have an office in Columbus called The Short North which is a booming area. Columbus was rated as one of the top 10 cities for startup investing and startups. One of our startups was bootstrapped that got themselves to $1 million. They came to us at that point in time. For every one company backed by angel investors, there are, at least, one or two that are being bootstrapped. It’s a very vibrant entrepreneurial startup community that we find ourselves in.
Sramana Mitra: That’s great to know. One of these days, we’re going to put a spotlight on Ohio.
Bill Baumel: We have five of those in our portfolio. I’ll be glad to pass it along.
Sramana Mitra: Going back to the portfolio, tell us about the highlights. Maybe talk about some of these $5 million plus companies that are finding their stride so they can look at what’s happening out there.
Bill Baumel: It’s very exciting. We have two companies that are on the FDA approval side. They’re pre-revenue. For other companies, they have grown over 100% year over year. A majority of those are growing 100% year-over-year and others are growing at 30% to 50%. We’re finding strong growth and finding recognition out there via partnerships.
For example, I’ll pick an example called Wiretap. Wiretap is a cybersecurity company providing their solution for platforms such as Slack, Yammer, and Facebook Workplace. They actually have strong partnerships with Facebook and Microsoft. They have GlaxoSmithKline and AIG. We’re having a lot of success with our companies.
We have another company that did a Series B financing. They were at about a million in revenue when we started with them. Over the last couple of years, they’ve gone to $35 million. A couple of companies are at $10 million to $12 million in revenue. The other thing about Ohio is it’s much more capital-efficient. To grow to $20 million in revenue, we are not raising $50 million. We are doing it all in $3 million to $5 million Series A and $8 million to $10 million Series B. It’s capital efficient. We’re finding a very strong workforce. We’re finding a very strong work ethic.
We do partner somewhat with Silicon Valley and use our network there. For example, Mike Hughes who’s the former Senior Vice President of Worldwide Sales at Barracuda is an advisor to Wiretap as is one of the founders of Box. The partnerships with Facebook, Microsoft, and the Dell help in bringing some of the venture capital from the coast along with it. They are recognizing our companies for the strength of the solution offered in the marketplace.