#224: The O.H.I.O. Fund — Origins and Ambitions

Jeffrey Stern [00:00:00]:
On this special episode of the Ohio Fund Report, I am joined for the first time by the two co founders of the Ohio Fund, Mark Kwame and Ray Leach, and the Fund's two founding partners, Jill Meyer and Mike Venerable, to share the inside story of how a bold idea has become reality. In our conversation, we walk through the inspiration and origins behind a first of its kind strategy to generate returns, all while accelerating prosperity and shaping Ohio's future. We cover how in our first year we've closed on over $230 million in capital from investors and deployed over $130 million back into 19 sector diverse investments across the economy of Ohio. We talk about what it's taken to build momentum and begin to forge the most powerful network of investors, of founders and of operators across the state. And we talk about why Ohio's moment is now and the urgency that this opportunity demands. I am Jeffrey Stern, Principal of the Ohio Fund and host of today's Conversation and I hope you enjoy this exclusive behind the scenes look at our first year as the Ohio Fund, our reflections on the journey thus far and where we go from here. Lay of the Land is brought to you and is proudly sponsored by Roundstone Insurance. Headquartered in Rocky River, Ohio.

Jeffrey Stern [00:01:13]:
Roundstone shares Lay of the Land's same passion for bold ideas and lasting impact from our community's entrepreneurs, innovators and leaders. Since 2005, Roundstone has pioneered a self funded captive health insurance model that delivers robust savings for small and medium sized businesses. They are part of the solution to rising healthcare costs, helping employers offer affordable, high quality care while driving job creation and economic growth throughout Northeast Ohio. Like many of the voices featured on Lay of the Land, including Roundstone's founder and CEO Mike Schroeder, Roundstone believes entrepreneurship, innovation and community to be the cornerstones of progress. To learn more about how Roundstone is transforming employee health benefits by empowering employers to save thousands in per employee per year healthcare costs, please visit roundstoneinsurance.com Roundstone Insurance built for entrepreneurs, backed by innovation.

Disclaimer [00:02:08]:
Committed to Cleveland hello everyone and welcome to the Ohio Fund Report, a show dedicated to raising the collective ambition of Ohio. Before we dive in, just a quick note, this podcast is for informational purposes only. Nothing you hear today should be taken as investment advice, a recommendation or an offer to buy or sell any securities. Please note that the Ohio Fund and its affiliates may maintain investments in the companies discussed. Any forward looking statements you hear today are based on current expectations and may change. Please do your own research and consult with your advisors before making any investment decisions for more information on the Ohio fund, please visit theohiofund.com.

Jeffrey Stern [00:03:09]:
I'm always drawn to 1830s. There was an Ohio politician named Caleb Atwater, also a historian of the state, who observed at the time that Ohio is particularly well positioned, structurally advantaged, to be the most prosperous state in the union as to its climate, its soil, its production, the industry. And it would be its own doing if that were not to happen. And I like framing what we'll talk about here today because I feel all of you collectively are here out of a recognition of a similar opportunity, the imperative to build the Ohio Fund, kind of to recognize that, and the sense of urgency with which we're going to approach that exercise. And so the ingredients are all there, and it's going to take this activation energy of the Ohio Fund to realize it. And so with that in mind, I thought, Mark, if you want to just help set the stage for why we're all here today and this recognition of that kind of opportunity that we have, great.

Mark Kvamme [00:04:17]:
Happy to. I think actually just to answer the question of Atwater, in 1830, it did happen. And from 1830 to the 1950s, Ohio was the place to be third most, third biggest state in GDP. In 1949, there were the 15 top metro areas in the United States. One of them, number one, was Detroit, number two was Cleveland. But only one state had more than one city. So it was Cleveland, Akron, Columbus, Youngstown, Toledo and Cincinnati. And no other state had more than one place.

Mark Kvamme [00:04:58]:
And I think something happened that Ohioans weren't prepared for. Basically, in the geopolitical world, people went to where there was cheap labor and it was all about the world economy. And folks had to figure out how to be competitive. And the way they were competitive was by going overseas. In fact, my father's company that he was one of the founding members of, Natural Semiconductor, was the first electronics company to go international. And in 1974, I was. I was actually able to go with him to Japan, to Taiwan, to Hong Kong, to Penang, Malaysia, to all these places that are now where all this stuff is being made, 90, 95% of it. And so I think, you know, the interesting thing from my perspective is Ohio has been there.

Mark Kvamme [00:05:47]:
Ohio still has all the advantages that he mentioned. We just kind of lost our way a little bit. And so when I came here to Ohio in 2011, I knew nothing about Ohio. And, you know, people were pretty depressed. Just lost almost 400,000 jobs. We had a budget deficit. You know, things were in a difficult time right after the financial crisis, and people were kind of holding their heads down. And I started doing some research and I thought to myself, well, you're number one in aerospace.

Mark Kvamme [00:06:17]:
You know, you're number one and close to number one in consumer goods. You're big in steel, you're big in all these different industries. There's about eight industries a state where, you know, we didn't just lead the nation, we led the world in. And so we still had those raw bones of success. And so. But we were still in a difficult time. And so one thing that, you know, I'm a big believer in is capital is the. Is a lubricant for innovation.

Mark Kvamme [00:06:47]:
And since capital had left the state, most of our industries were old industries. Most of the investments were old investments. And so when I started looking at what was going on in Ohio, I had to look at other areas that were similar to that. And when I was putting together Jobs Ohio, I saw that kept coming up over and over again. Temasek in Singapore was in a similar situation in 1974. Third world. I mean, the population, land mass and GDP of Singapore was basically equal to Jamaica. And so it was a third world country.

Mark Kvamme [00:07:18]:
I was there in 1974, it was a third world country. And so they put together this investment pool of $180 million by selling a soap factory, a detergent factory, a shoe company, a bird park that tells you those were their big assets that they were going to bring together and took that and said, no, we're going to take that money and just reinvest in Singapore. And so when I came to Jobs Ohio, I go, man, we should do that. A whole bunch of reasons why we couldn't do it at Jobs Ohio. And so that idea was kind of shelved. And then fast forward Ohio was doing better and better and better and better. I was talking to Ray and I said, hey, Ray, I got this crazy idea. Why don't we build Temasek for Ohio? We think.

Mark Kvamme [00:08:01]:
I think it's ready for that. Imagine if we were able to raise hundreds of millions of dollars and invest in this economy. We know we have the innovators, we know we have the entrepreneurs. We just don't have the liquidity which is the capital. And so that was kind of the founding idea that Ray and I kind of started with. And then, of course, we called Mike up, and then we called Jill up. And I think one thing that was very beneficial for me is I came into Ohio knowing nothing, knowing nobody in Ohio. And so I was able to kind of be a cheerleader for what was going on and then I met these incredible entrepreneurs and these incredible business leaders like Ray, like Mike, like Jill.

Mark Kvamme [00:08:41]:
And when you put these folks together, we can be world class. And that was kind of the core of what we did. And then we can talk about what we've done since then.

Jeffrey Stern [00:08:52]:
When Mark calls you with a crazy idea, Ray, having worked in and for the betterment of Ohio entrepreneurship, really your whole career, what resonated about it? Why pursue it?

Ray Leach [00:09:05]:
Yeah, well, I think first, it was a huge idea. And for any leader, Mike, Jill, myself, Mark, obviously, we've been involved in a lot of initiatives in Ohio that had ambitious goals or no one had approached me with an idea that could literally transform the future of the state's economy. And Tomasic is such a powerful example. Obviously, very different situation. Ohio's the 25th largest economy in the world today, seventh largest US state versus what was happening in Singapore 51 years ago. But at the same time, this idea that pooling capital to partner with the private sector, and importantly, pooling private capital to partner with the private sector was something that I just found incredibly compelling because in my previous roles, one of the regular and consistent challenges was a lot of the local money that was investing in companies and opportunities was taking a lot of the early risk, some of the greatest risks. And as our companies continued to grow and begin to thrive, most of the capital to fuel the growth of those businesses was coming from outside Ohio. So I clearly saw there was a missing link between the private sector that happened to be domiciled in Ohio to participating in accelerating the growth of the companies, but most importantly, the profitability and the success of those companies, first economically, but then the tertiary and secondary benefits of growing opportunities for all Ohioans.

Ray Leach [00:10:37]:
So Mark's idea, you know, really was a bullseye in my mind, and that this group could serve as a catalyst to make a significant impact in the near term. But our aspirations over the next decades would be for the Ohio Fund to invest hundreds of billions of dollars into the Ohio economy over future generations.

Jeffrey Stern [00:10:59]:
How do we loop the Cincinnati squad into this dynamic team that makes it happen impossible?

Jill Meyer [00:11:06]:
Starts with Mike.

Mike Venerable [00:11:08]:
Well, yeah, so I think the weirdest part about this whole thing is that we were all leaving somewhere we'd been for a significant period of time, poured energy into those roles and all thinking. And I was thinking about, what am I going to do next? And Ray called me one day and told me that he'd been talking to Mark. And I've known these. I'd known these guys forever. And I remember when Mark first came to Ohio. For me, having come here from Virginia, having sold, you know, been exposed to sort of the Valley mindset, I'm like, okay, here's somebody who has, you know, there is no. There are no limits. Lids off.

Mike Venerable [00:11:45]:
Let's just go. Let's go build things. Was here and brought that message. And it's hard to tell that message by yourself, and especially if you're not, you know, a Sequoia partner. So, you know, I was just an entrepreneur. Ray was. We did our best. So I think what really got me interested in it was I needed to do something else.

Mike Venerable [00:12:02]:
I wasn't going to move. And I knew. And Ray and I talked about this, and Jill, who was my board chair, would talk about this like, we have just such a huge capital deficit here. We have a market failure around opportunity relative to what Ohioans are investing in their own state. All up and down. And we're way down at the concept level. The idea of starting with a much broader view, with a much broader vision, and working with people who I knew well, trusted, but also knew that they would pour everything into it, that was like, okay, this sounds great. I mean, it was an interesting time to start, I will say that, to start this journey, but I think we're all kind of genetically designed to do things that just seem maybe ridiculous to other people.

Jill Meyer [00:12:52]:
I'll jump in here to follow. Mike and I had talked about what these guys were doing. As he said, I was his board chair at the time, talking about his succession plan. I was also in the process of leaving my previous role of being the CEO of the Cincinnati Regional Chamber. The reason these dots all connected for me is not only had we been talking about the gap of growth capital and how to solve against it, but I had spent the previous almost decade working to grow southwest Ohio's economy, while at the same time watching and understanding what was happening in other parts of the state and seeing the gaps, seeing the differences, but also seeing the huge misses that were happening because at least the three Cs weren't connected. And then you weigh in with all of the other cities around and towns and different parts of Ohio. If we could learn to operate as a state and take the best of all of us, we can go from being good to being really, truly great. And so the boldness of that opportunity, coupled with what I knew to be challenges for economic growth, but also the importance of private business.

Jill Meyer [00:14:08]:
So when I. I'm an attorney by background, I went to run the Cincinnati Chamber because it was a business organization, and I left there saying, I needed to get back into private business because for that's what drives the conversation everywhere else. Private businesses make the world run and we need to do a better job of making that happen in bigger, bolder ways. Here we are.

Jeffrey Stern [00:14:31]:
One of the perennial startup questions is always, why now? And when you think about the opportunity, meeting the market, we have all these structural advantages. It's not like they went away. Why is it that now is the right time to reactivate them and to build this vehicle, the Ohio Fund, to solve that dearth in the market?

Mark Kvamme [00:14:54]:
Well, I mean, I think it's an interesting. It's a very good question because I mean, the downturn of Ohio really kind of started in the 70s and early 80s and was fully realized, if you will, in the early 2000s. And so I think it would have been very difficult to do this from 2000 to 2010 because just the confidence wasn't there. The financial crisis had just happened, we had these deficits and everyone was going, oh my gosh, the world's pretty ugly right now, pretty dark. And then when we did Jobs Ohio, but that's the only reason why we got Jobs Ohio done. I'm a big believer in something Don Valentine, the founder of Sequoias, used to say is never waste a good crisis. When you have a crisis, you can do things you can't do normally. And so I mean, imagine, I mean, when we formed Jobs Ohio and collateralized the liquor business, we basically took from the, from the Ohio Assembly $250 to $300 million a year.

Mark Kvamme [00:15:48]:
Now we paid $1.8 billion for that and it was solely used for economic deal in the state. So, you know, but it's really hard to do that. And the only reason why you could do that is during a crisis. And then on top of that, Ohio had already done a couple other things. They had done, you know, a couple big bonding measures. They had done the Frontier Fund, Ohio Frontier Fund. And they'd start things like Sensi Tech, like Jumpstart and had funded some entrepreneurship. So people are starting to see a little bit of benefit of that.

Mark Kvamme [00:16:18]:
Simultaneously, Jobs Ohio started to get their legs with the intel announcement and with many other announcements. And Drive Capital was the company that I formed with Chris Olson, 2.2 billion under management. And people go, wow, this could actually possibly work. I think it was a. I think it would have been very difficult to do it, at least in my opinion, in the last 25 years. I mean, these guys know much better than I. I think the timing, you know, sometimes it's you know, as I say, you know, building something great and durable. It's part timing and part luck.

Mark Kvamme [00:16:51]:
And we had a little bit of both.

Jill Meyer [00:16:53]:
Well, I would add in Mark, we were talking yesterday, I think, Jeffrey, in response to something that you had said, that people in Ohio over the last 20, 25 years have been almost apologetic about being Ohioans. And that's changed in the last handful of years. People appreciate what we have here, what we are here, the opportunities that are here. There are some who still have to be brought along and we're happy to do that. But weaving those stories together and showing people this is happening right here in Ohio is the difference maker. So timing is Ohioans are owning Ohio in a way they haven't in the past.

Ray Leach [00:17:33]:
Yeah. I think it's so interesting that both the macroeconomic conditions and the micro local community, confidence, ambition, desire to try something new. Whether it's the combination of the pandemic, decoupling from Asia, reshoring of manufacturing, obviously the geographic advantages that Ohio has with reshoring not just around climate change or impact of climate change, but also the proximity to the US economy. So to your comment, many of these things are fundamental and have been in Ohio for a couple hundred years. But the circumstance that we find ourselves in globally and then the combination in many ways of the four of us and our first 108 investors, our first, the confidence that we're going to go do something big, bold and ambitious, and leverage the 80 years of CEO leadership that we've collectively provided across the state. But then finding an incredibly welcoming and excited group of investors who believe in the vision and have partnered with us to really begin something that we're very excited about.

Jeffrey Stern [00:18:47]:
Yeah, it's this marrying of pride of place and taking seriously the opportunity to invest in it as if that were true.

Mike Venerable [00:18:54]:
There's another piece to it which I think is there's a trend. When Mark first showed me, I first saw the deck that they original deck, I processed it. I'd seen a lot of decks and I had to think about it a long time. But I thought, I always said to people things can happen to you or you can, you know, you can, the wave can wash over you. You can get on the wave. There's change happening globally. There's a once in sort of a moment, once in human history moment around AI but if we don't activate around it, if we don't really get, you know, think of it differently as, as an opportunity, it's not going to come again. Right.

Mike Venerable [00:19:32]:
This is our opportunity. This is our comet. Right. So we need to. We need to move with some urgency, and we need to do it for the state, because you can.

Mark Kvamme [00:19:40]:
Yeah. I mean, I think Mike brings up a very good point on two levels. One is this is the state that. Where we make things. And we're, as Ray said, we're decoupling from Asia. But at the same time, we're in an age starting two and a half years ago when OpenAI came out with the first ChatGPT there, people are seeing what AI can do. AI is going to impact everything. It's not just about moving bits around, it's about moving atoms around.

Mark Kvamme [00:20:04]:
You know, humanoid robots. I mean, we can go down the whole list of possibilities. You know, Path Robotics here in Columbus is doing full AI welding. There's a lot of things that are going to be impacted, you know, 3D printing, so on and so forth. And so I think Ohio has the opportunity. Either they're going to grab that and own that, or it's all going to go to the coast again, because that's where the money is. So what we got to do is we got to be the instigators and the infiltrators of what's going on here inside of Ohio and provide that liquidity. And we have the entrepreneurs, we have all that stuff, and we want to.

Mark Kvamme [00:20:40]:
You know, I think a great example in my mind is Michael Waxman at Sundays for Dogs. He had built this great company. You interviewed him on your podcast. I got to meet him as well. And, you know, he. He was in this weird position where he's up in Cleveland, he's building this great company, and he needs just a little bit of money to get over, I mean, 15 million bucks, which in the scheme of things was not that much money. Well, the only way he was going to get money was these guys flying in from, you know, around the world trying to give him a $50 million check for this. And they want first right of Fusil to buy his company.

Mark Kvamme [00:21:14]:
And he couldn't. You know, it was very difficult to put it all together. Well, the Ohio Fund, thankfully, was there. The Ohio Fund then worked with their early investors. We put together the 15 million bucks, and now the company's doubled again since our investment, you know, last year, and it's. It's growing like crazy. And now, you know, the kinds of things people are throwing at them are even bigger. But now he knows I got the Ohio fund behind me.

Mark Kvamme [00:21:39]:
I don't. If I need more capital, I can get it here and get the job Done. And go build that multi billion dollar company that I really want to go build. And I think that's something that Ohio has just missed. I mean it's if you're an entrepreneur and you build this company and you want to grow it, but you need capital to grow it and it's hard to get bank debt, it's hard to get this. And so having that combination of know how and capital and partnership with entrepreneurs, I think is a really unique situation.

Jeffrey Stern [00:22:11]:
To add on to that. I mean, all the capital that they had raised to date was not from Ohio.

Mark Kvamme [00:22:15]:
Exactly.

Jeffrey Stern [00:22:16]:
And they're an Ohio company.

Mark Kvamme [00:22:17]:
Yep.

Jeffrey Stern [00:22:18]:
And proud to be one.

Mark Kvamme [00:22:19]:
Absolutely. Absolutely.

Jeffrey Stern [00:22:21]:
So Ray, you had mentioned the degree to which the story we're trying to tell here is resonating with a broader group of now investors and partners that as this has gone from crazy idea that Mark's had to a broader conversation and I think ultimately towards a moment.

Mark Kvamme [00:22:39]:
Ideas are easy, execution's really hard. I had the easy part. We had to bring a whole team together to go execute on this thing.

Jeffrey Stern [00:22:46]:
So what we're doing here is I think people try and ascribe things to a bucket, some pre existing construct and in a lot of ways what we're doing is very different. It doesn't fit in a box. How has it resonated as you've turned this collectively from an idea into a thing that's made 19 investments over the last year, that's building momentum.

Ray Leach [00:23:11]:
Absolutely. So I think one of the things that was fascinating, Mark and I spent a little bit of time certainly before we officially went out to launch the idea, kind of in a listening tour construct. And you know, that was helpful because we were able to share the idea and kind of and get great feedback. But we could sense confidence from all across the state that despite this idea being very different, meaning it's multi asset, we're investing across the whole economy. We're really in impact Opportunity Fund that's totally focused on returns that will then generate economic benefit above and beyond cash on cash returns to investors. And so those early signals were encouraging enough for us to, you know, leave port and go make this happen. And over the course of really 16, 17 months, we were able to raise a little over $100 million. And then now we've, we've added another 150 million to that process.

Ray Leach [00:24:08]:
So I think from the perspective of investors out there who are excited about the construct that we've built, it has very much been manifested. And then of late, the 19 investments that we've made across Funds, real estate, private equity or growth equity. And scaling tech investment has just added to the excitement from our partners and investors.

Jeffrey Stern [00:24:35]:
Can you speak a little bit more to the network who is involved in what we're doing?

Ray Leach [00:24:40]:
Yeah. So I think one of the things that we've really honed in on from the very beginning is that we can't do this alone, certainly, but that there is the knowledge, the capital, of course, but then the knowledge, the operational knowledge, the industry knowledge that we can find across Ohio and leverage that to not only identify great investments, but but to maximize the returns from those investments. And it's really in many ways about the who. Who are the individuals, the investors, the subject matter experts and partners across Ohio who can understand and appreciate our vision and join our team as partners and collaborators to accomplish our goals.

Mark Kvamme [00:25:24]:
Yeah, I mean, I think the amazing thing to me is I learned this when I came to Ohio. It's kind of like the Medicis of Italy a long time ago. There's the Clevelanders, there's the central Ohio ers, and there's the Cincinnatians, and neither of the three shall meet. I mean, you know, it's amazing to me how people didn't work together across those three cities. And so what we're doing is, you know, we are very purposeful. When we went out to fundraise, actually at our first close, about a third came from the Cincinnati region, about a third came from Columbus, and about a third came from Cleveland because we wanted to show people that we were about the state. And if we bring everyone together, we can be so competitive. I mean, I remember when I first started jobs Ohio and I saw Cleveland competing with Columbus for a job and Dayton completing with Akron and all this, I go, guys, you're not going to win.

Mark Kvamme [00:26:13]:
You know, a world class company. But if you're just coming in as Cleveland or just coming in as Columbus, you got to come in as the state of Ohio. So one of the first things we did is we put all the inbound leads on one salesforce instance. And everyone's well, you know, they're gonna steal my leads. I said, no. I mean, companies know where they want to go. They know where their labor pool is. They know if Dayton's the right place for them, they know if Cincinnati is the right place for them or Cleveland or wherever else.

Mark Kvamme [00:26:37]:
And so, and that's really, really worked, you know, very, very well. And it's allowed us, from an economic development point of view, move very quickly. Now with the Ohio fund, if you're a company coming in here let's say we're recruiting a company coming in. They need to build a 200,000 square foot facility and they need to hire 500 people. Well, our investors are builders, are developers. One of our investments is a contract hiring company that hires all these people. If you put now our 108 investors all together, we can pretty much. I'd like to say we're one phone call away from anything.

Mark Kvamme [00:27:14]:
I don't care if you want a small nuclear reactor. We probably could help you out. I mean, it's that kind of craziness. Now step forward, you know, five, 10 years. You know, imagine it's 500 people of the best and brightest. Maybe it's 1,000 eventually. And we're, you know, we're all working together. We're all working for the greater good of Ohio.

Mark Kvamme [00:27:33]:
And you know, I always have in this mind's eye, we were talking, we were looking at a company recently and I said, well, imagine if someone drove in here and said, I'm an investor in this or I'm an investor in that and I help this guy out, I help that guy out. We bring everybody together. I think that's the real power of what we're doing at the Ohio Fund.

Jill Meyer [00:27:50]:
Yeah. Let me pile on a little bit on the power of the network. The conversation starts with us saying that there historically hasn't been enough growth capital in Ohio, but there is enough wealth in Ohio for there to be enough growth capital in Ohio. And so looking around the state and seeing the brilliant business people from top to bottom, side to side, who've built businesses, have built a tremendous amount of wealth who are investing actively in lots of places, but not in Ohio. And if we can bring those folks together, show them each other, but also let them see the things that they can get excited about for their own investments, that is unleashing something that has not existed in Ohio, period. The people have, their investing has, but bringing it all together creates an entirely different energy. And it's one that just begets more and more as you get that world going.

Mark Kvamme [00:28:45]:
Yeah. I mean, just to add on top of that, just imagine, you know, all these folks, there's a lot of, you know, billionaires and 100 centimillionaires who've done amazing things in Ohio. And imagine now that they can get world class returns and then invest back in Ohio. It's a win win because then their businesses grow, their kids stay in Ohio. There's all these other ancillary benefits that I think a lot, at least our.

Ray Leach [00:29:10]:
Initial investors really realize you know, there might have been. Well, I guess we can all, you know, from, from reading history, we can get a sense of who are the activators, who were the players that helped create, whether it was New York as a capital center or Silicon Valley as a capital center. That's really what we're trying to do, is create Ohio as a globally recognized center of capital and 135,140 million in year one. Our goal is to be investing hundreds of millions of dollars each and every year over the next handful of years. And billions, ultimately tens of billions in Ohio each and every year. So that when one contemplates, of course, everyone knows the centers of capital in the United States five, ten years from now. Ohio's on that list. That is what this is about.

Mark Kvamme [00:29:58]:
Yeah, I mean, think about it. We're double the economy of Singapore and Temasek's $400 billion 51 years later. So just imagine, actually, now they think about it, their GDP is about 400 billion and they got $400 billion. Our GDP is about 925, growing to a trillion. Maybe in 50 years, we should have a trillion dollars in the Ohio plan all working together. Okay, let's go.

Mike Venerable [00:30:25]:
Well, let's do it.

Jeffrey Stern [00:30:27]:
Yeah. I kind of introduced this whole topic and the opportunity for us to potentially alter the trajectory of the state and accelerate, increase the slope of that. All of you could have worked on anything at this point in your careers, respectively, and yet you've chosen to do this very difficult thing at this point. And I just kind of want to ask why?

Mike Venerable [00:30:52]:
Because I'll tell you why. You're right. You do anything or next to nothing. I did that once for about three years. It wasn't that bad. But I would say this. My mom lives in Hamilton, Ohio, where I grew up. And a lot of times I go to visit her.

Mike Venerable [00:31:07]:
She's 92 now. And I walk along the river a lot. And I grew up there in a classic Midwest river town. Paper mills, foundries, Mosler and Diebold were there. And I moved away. And, you know, I remember growing up and most of my friends, their parents worked blue collar jobs. My dad was a railroader, mom was a white collar job. But man, when I came back, it was not what it was.

Mike Venerable [00:31:34]:
I came back in 2004. Now they've made progress, but all that left. And I stand there sometimes as I'm walking down the river and just think about, you know, what's the big project? Spooky Nook. Spooky Nook's great for Hamilton It's a sports park for kids. But how many people are going to work there and really pay for a house or have the kind of jobs that my friend's parents had when I grew up and that my parents had? And I guess I'm a little pissed off. Are we allowed to say that? Are we allowed to cuss on our own? It's like, man, if this is the moment and what else am I going to do that would be this interesting, this compelling, this impactful anywhere else? I mean, I don't think there is anything. And it's. Candidly, it's a lot of.

Mike Venerable [00:32:19]:
You know this because we run around together now. I call it commercial anthropology. I mean, it's just so fascinating. You meet these incredible people who take risks that most people don't understand. To go do these things and succeeding against the odds, there's no better feeling than watching them find success and setting back, by the way. And I think this is another important piece. When I built Sensatech, I hired senior people who had made their bones already. And I said, you cannot be the focus.

Mike Venerable [00:32:48]:
If you're here to make your bones, you're in the wrong place. You're here to see other people succeed and recognize their sacrifice. And that is. That gets me up every day, gets me to drive to Cleveland more times in the last six months than I ever would have imagined.

Jill Meyer [00:33:04]:
I'll jump in. You said in your question, for me, a driver, which is there are lots of things you can do, lots of things that would be interesting, lots of things that would scratch an itch. But there are, I can't tell you, another career choice, something to spend your time doing that is truly changing history. So to change the trajectory of the state, you can think of it that way. As a mother of a 12 year old who spends plenty of time at Spooky Nook, I can tell you it's doing very well for Hamilton's economy. There's so much going on here. So to think about the fact that I could have an impact on the state, that I hope my son stays in and continues to build in, and his buddies want to come to here to be with him. That's that kind of stuff, right? Like you get to do it.

Jill Meyer [00:34:00]:
It's the right time. The momentum is there, the assets are there, the four of us are here. This is a once in a lifetime opportunity to really leave a thumbprint.

Ray Leach [00:34:11]:
I think what I would add is it just so happens the four of us are huge readers and passionate about the history of the state. And I Know, Jeffrey, you are as well. And you know, Ohio has such an incredible economic history, and yet as a kid from Akron, you know, I was really raised in Akron, University of Akron graduate. I've had such big aspirations and hopes for my hometown, but also the state. And so the ability to leverage the circumstances, the energy, but also, you know, in many ways, the experience and knowledge. I mean, the, the reality of working in the kinds of roles the four of us have worked in, you gain a tremendous amount of hard lessons and insight. And so the timing, I think, is just remarkable. So that was my big motivation to go for it.

Ray Leach [00:35:09]:
And super encouraged by the progress so far.

Mark Kvamme [00:35:13]:
I think for me, I'll never forget when I was in my early 20s, I always said to myself, I don't want to be sitting in a rocking chair at 85 and saying, I wish I did this and I wish I did that. And I hoped I did that and I didn't do that. And so when this opportunity comes around, I begin to think, I'm 85, I'm having a bourbon and a cigar and rocking back and forth and thinking about it. And I think the Ohio fund could be $50 billion, $100 billion, and have a dramatic impact on the state and where hundreds of thousands of people work and the population grows because there's the investment capital here. And again, that's a. You know, we're a long ways away from that. I mean, we've raised $250 million. We've had a lot of success, but it's possible.

Mark Kvamme [00:36:00]:
I mean, it's really, really, really possible. And actually, just talking here, I hadn't really thought about that. The Temasek's assets under management is the same as the GDP of the country. Imagine if we will have, I mean, we'll double the population of this place. We will be the innovation hub of America if we have this sort of thing. So anyway, that's what drives me. And, you know, all four of us here don't really have to work. We've been very fortunate in our careers, but what a great thing to do to have impact and really help everyone.

Mark Kvamme [00:36:35]:
In all 11/million people in the state of Ohio.

Jeffrey Stern [00:36:39]:
What has surprised you most about the first year of building the Ohio Fund? Obviously set a very ambitious goal. And when you reflect on 19 investments in the first year, the traction we've made in building the Ohio Fund Network. Did you anticipate that we would get to this kind of velocity as quickly as we have? Just what sticks out to you as surprising about this journey?

Mark Kvamme [00:37:02]:
So Far, I'd say there's kind of two bookends. And again, we're still in the middle, just starting. I mean, we're barely walking. I have a grandson who's starting to walk and I kind of feel like he turns 1 in three weeks. So I kind of feel like him right now. But the first 18, 24 months was really hard. Okay, you have a whole new concept. You're saying we're going to be multi asset class.

Mark Kvamme [00:37:28]:
How could you be multi asset class? I remember when we were down in Cincinnati, well, you're only going to invest in Ohio. Can we invest in Lexington? And I said, no, it's across the river. This is the Ohio fund, not the Lexington Ohio fund. It's just a lot of those kinds of questions. I remember other questions like, is Ohio big enough for a $500 billion fund? Wait a second, it's almost a trillion dollar economy in housing. I mean, it's all these kind of. Basically, this is not going to work. It's not going to work.

Mike Venerable [00:37:55]:
It's not going to work.

Mark Kvamme [00:37:55]:
And luckily, quite frankly, we got to thank Steve Steinhauer at the Huntington Bank. And many of our early investors believed in us. The Edwards family, the Castellinis, Western Southern, the Cleveland foundation, just a ton of folks believed in us to get to that 100 million. And then we were able to do our first deal. And thankfully, through our connections with the New Albany company, we were able to get our first land deal done. And everyone goes, oh my gosh, it's beginning to work. And I think my biggest surprise, I knew it was going to be hard to sell because I had gone through Drive capital. I said, hey, we're going to build a technology first venture capital firm in Columbus, Ohio, that's going to service the Midwest.

Mark Kvamme [00:38:31]:
And you know, all the investors from around the country, because most of the money comes from, you know, on the coast, they said, hey, Mark, you and Chris have experience at Sequoia. If you kept in Silicon Valley, you could raise us in six weeks. Well, it took us 420 meetings and forever long to get it done. And the same thing is here. The thing that totally surprised me is how fast people began to understand what we're doing and the ability to not only attract more investment, but the ability to attract people that are seeing the opportunity in Ohio. And I have this whole phrase, what if it works? And it's sort of working right now. We have a lot of, we have a long way to go, but it's getting really exciting. As Ray said, 19 investments, they're all doing very well.

Mark Kvamme [00:39:18]:
Thankfully we've invested 134 million of which, you know, 30 plus million of that is actually sidecar money. So what we do is all our investors can Invest in our SPVs directly say, Hey, I really like that company and I really like that company. We allow them to come in on the side of ours. And so the confidence levels have been, you know, off the charts. So it's an exciting time but execution's everything and you know, we have the ball is now dribbling, now we just can't lose it.

Ray Leach [00:39:48]:
Yeah, I think what surprised me the most was that the capital gaps were even larger than I understood them to be. You know, in the last 20 years I've been really focused in early stage tech and those capital gaps are well known and you know, all sorts of seed and series A companies across Ohio have struggled with those forever. But the opportunities in growth equity and in real estate are mind blowing. And the fact that there's incredibly experienced leaders, lead investors, sponsors of transactions in Ohio that can generate very, very impressive returns need partners. So the fact that the Ohio fund has been able to show up as being a partner that fits the need of the capital gaps in their, you know, with, for their projects and you know, we, the demand for capital has been exponentially greater. I would not have anticipated that we would have done 19 transactions in the first 12 months and we probably could have doubled that in terms of just the deal flow that's out there that is proximate and of course that's going to be a big part of the next year.

Mike Venerable [00:40:58]:
What's surprising, 19 is surprising that we actually did that. I can remember some of them.

Mark Kvamme [00:41:05]:
I mean, I think I agree with you guys. I think it's surprising we were able to do it all. But also remember Too it was 18 months to raise the fund so we were simultaneously talking. So we did have a backlog. We did have a backlog.

Mike Venerable [00:41:18]:
I think the other thing is just how much a new, you know, how the world is opening up. Like 82 startups I've invested in have been around 20 others easily maybe 30. I always used to say, you're going to push and push and push and then there'll be a breach and you have to pour through the breach. And I feel like we're pushing and the wall is giving and the world is right on the other side. And now we need to just continue. I mean we spent the last two days trying to think about what should we do to really manifest what we think we can do and the impact we can have, that's pretty cool.

Jill Meyer [00:41:53]:
So here's my surprise is I knew how excited we all on the team are about the Ohio fund, but when we talk to investors, partners, others, how quickly people go from 0 to 10 excited about it themselves, and then they start telling the story for us in a way that comes back to the old, how come we've not done this before? And when people start asking or stating that, it's almost so obvious that we should be doing this. How have we not done it before? You know, you've hit something in people', sys, their brains, because they have to be willing to put economics on the line in some one fashion or another. But for people to digest it to the extent that they're out telling other people about it because they're excited, that's really cool. And I knew, like I said, we were, that's why we're doing it. But it's catchy and quickly it catches and it's spreading. And you know Mark's line, what if this thing actually works? Well, there are a lot of people who are pretty energized about helping us.

Jeffrey Stern [00:43:05]:
So I think one of the amazing things about what we get to do is work with all these companies who are building at the frontier throughout the whole economy of Ohio and understanding where.

Jeffrey Stern [00:43:17]:
It might be going.

Jeffrey Stern [00:43:18]:
You mentioned how it's really a place that is building things and kind of this generational movement that we have with AI and the urgency with which the opportunity is upon us. We don't have to go through all the portfolio. But when you reflect on the kinds of companies that we're working with, what sticks out to you as emblematic of the thesis that we have?

Mark Kvamme [00:43:46]:
I guess the thing to me is just how impressive the entrepreneurs, the founders, the CEOs of these companies are. And in many cases, I'm learning just as much from them as they may be learning from us. And as Ray said, it's truly these diverse economies. I mean, it's folks that understand how to do land development. It's folks who understand how to do build $100 million customer care companies or $350 million logistics, logistics companies, or build a dog food company from scratch now doing, you know, I can't say how much, but a lot of money. And so I think there's a lot of really special people. And you know, when you actually see them and you, they, they look at you with your enthusiasm and your, you know, excitement, if you will, for what's going on in the state, and they have that same excitement. To Jill's point, it's kind of like free atoms accelerating, accelerating, accelerating.

Mark Kvamme [00:44:46]:
And everyone is just really excited about it. So the way I look at this thing is these companies that are now helping each other, they're now telling the message about what's going on. They're proud to be where they're at. And more importantly, we're letting them do what they want to do. We are not heavy handed. We're not a PE firm. PE firm flies in, takes majority control, says, oh, you need to fire that guy. You need to fire that guy.

Mark Kvamme [00:45:09]:
You need this. No, we're your partner and that's what we want to be. We want to help you. I mean, the good news is most of us have been, you know, founding members of companies or, you know, very early on in larger companies, but in specific cities. And so I think that's. We want to be, we want to be the best decision they ever made. And if we can do that across every investment we've done, then everybody wins.

Mike Venerable [00:45:38]:
You're not allowed to really. People always used to say, especially in LPs, would always say, what's your favorite company right now? And I would, first I would say, well, I can't pick favorites. And later I would say, I don't know, but they won't be my favorite in a month. Something will happen, you know, there'll be someone will move into first position. But I think, you know, just, just echoing that like there is a, I think going back to Sundays, you know, Catherine and Justin who are doing juca, like these are people who have big visions and you need big vision believers. You need people to show up and say, you know, that's not. That sounds great. How do we figure that out? How do we help you do that? How do we move that along so you can realize that vision? And there are, those are, I mean, I'm talking about world class people who are true, truly active, you know, building globally relevant things.

Mike Venerable [00:46:31]:
Have built globally relevant things already. That's, I think, the coolest part, like just finding more of that. And I think we're just getting started, but the people really get you fired up. And the other thing is like I always like when I, when we talk about LPs, like our people, the people that get this right away are people who have built things in Ohio already.

Mark Kvamme [00:46:49]:
Exactly.

Mike Venerable [00:46:49]:
And made money. And they're like, yeah, I know, I know Ohio works. This is a great place for me. I'm in.

Jill Meyer [00:46:56]:
Here's what's cool about it though. Looking at our first 19 investments, how many of them are companies that the average person on the street might think are companies of the future? And they're building in Ohio on this soil. They're growing in Ohio on the soil now with some Ohio capital. You know, we can't not say a company like Eagle Electronics doesn't happen without the Ohio Fund to put the support behind the big vision. Yes, it can happen, and it can happen right here. And that's building the future in a very real way.

Mike Venerable [00:47:31]:
Yeah.

Jeffrey Stern [00:47:32]:
What I love about the Big Vision concept is something I know we collectively care a lot about is raising the collective ambition. And it is this virtuous cycle where because of all these companies interacting now with each other, aware of each other, the network coming together, it feeds the vision. And I think people realize it's possible.

Ray Leach [00:47:57]:
Yeah, it is a little bit of a conundrum. We've talked about it a couple times that all the raw ingredients of this opportunity have been here. And it's really the circumstance and the focus and the energy and the partnerships, obviously, that are making this happen. So on one hand, this isn't that hard. On the other hand, it's never happened before. Not just in Ohio, but in any state. In the way that we're going about was really interesting.

Mark Kvamme [00:48:23]:
I was up in Detroit two weeks ago, and, you know, you see what Dan Gilbert's done with Detroit. I mean, it's unbelievable. And his whole team. And I was meeting with some of his team members, and they go, we'd really like to do in Michigan what you're doing in Ohio. And I said, well, it's not easy because you have to find people that are experts in multiple different areas. You have to find people that are trusted in, you know, you gotta have someone in Grand Rapids. You gotta have someone in, you know, I don't know, all the big cities in Michigan, in Michigan, in each one of your key, key areas, they all gotta be comfortable working together. And then just like you had a, you know, you know, a partnership with the mayor in Detroit, you need to partner with all the best entrepreneurs and all the biggest companies.

Mark Kvamme [00:49:07]:
So you're gonna have to get your automobile companies working with your fabricating companies, working with your. This company and that company. And it ain't easy. And I think one of. And again, not to pat these three and us on the back, but I don't think it could have been done without Ray being 20 years, 25 years in Cleveland with Jumpstart or Mike being nearly 20 years in Cincy Tech, and then Jill being head of the Cincinnati chamber for eight years before that, the head of law office and quite frankly, me being part of the state economic development and understanding where all the bodies were buried across the state. And it's a very, you know, it's team, it's partners, but it's. It's. Everything's kind of come together in this kind of unique way.

Mark Kvamme [00:49:51]:
And I think that will be kind of interesting because what's going to happen is absolutely, if we have any modicum. Modicum of success, it's going. People are going to try to copy it. Which we're, by the way, we're open by, you know, you listeners from Indiana or Illinois or Pennsylvania. We're here to help and give you the playbook. But it's really hard. And I think we're in a very unique situation during the place.

Mike Venerable [00:50:14]:
I want to circle back to what company you said company that exemplifies it. I go. I go back to Eagle because I think Eagle does a lot of things. I will tell you, it was hard. Like the last five or six years in the world that Ray and I came from, especially was really hard. You know, startup, you know, startup to Surrey is a tough, tough place to live. Go through Covid, go through all the craziness, you can start to think, man, this is almost impossible to figure out. But I think I go back to when I first met Mark and I thought, finally there's somebody here who can go out and evangelize.

Mike Venerable [00:50:47]:
Like, hey, think differently. This is not what you think it is. There's more here. Eagle kind of cracked a again. It's like it made me think, well, wait a minute. I need to think more creatively here. Like, we're not just going to sit around and passively do. We're going to be catalytic in a different way, which might be more work, but it'll be a hell of a lot more fun.

Jeffrey Stern [00:51:07]:
What are you most excited about looking ahead?

Ray Leach [00:51:12]:
Well, I guess a great beginning is super helpful to the next chapter. So I think how do we leverage the momentum that we've in the early days have been able to generate? And we have some incredible news that I think is going to happen. Stories of companies, but also returns, you know. So I'm super excited about how the Ohio market reacts to what we've done, but most importantly, kind of what's coming. So I expect in another couple years, we'll be clipping along at 80 miles an hour. We're at 10 to 15 miles an hour now, and I'm anticipating that the acceleration is going to continue. And I'm excited to, to interact with Ohioans and see their confidence increase because I think we made a ton of progress over the last generation and a lot of progress in the last five years. But, you know, the best is yet to come.

Mark Kvamme [00:52:11]:
I mean, the way I look at it, hate to use a baseball analogy, but we're literally in the first inning. We got our first two guys on base and it's looking pretty good, but it's very, very early, number one. Number two is the opportunities that are being brought to us. I never thought would have been bought to us. I literally. And having told these guys about an opportunity which I can't be specific about is massive that they may give us an opportunity to be involved in. I mean, it's in the power space. I never thought we'd own a power plant.

Mark Kvamme [00:52:47]:
So I mean it's all kinds of stuff out there. And what's nice is I think this state and this time is so unique and we're so fortunate to be placed in between all of that. And if we continued as we just had an off site here and execution is everything, as I like to say, idea is easy execution, everything. We continue to execute and do what we say we're going to do and demonstrate the power of the state of Ohio. This could be massive. I mean, I've now got my mind on a trillion dollars. So I got to think about that. It could be huge.

Mark Kvamme [00:53:26]:
It could be huge.

Jill Meyer [00:53:27]:
It could be huge. I think about, I go out into the future and there are a couple of things that resonate with me that get me most excited. One is thinking about the companies that will succeed and grow because of us.

Mark Kvamme [00:53:46]:
Who.

Jill Meyer [00:53:47]:
And these are the two connected points. The population that either will stay here or come here because they know it's where their business can grow. That hasn't been the story of Ohio. It will be the story of Ohio. And the resulting impact on population growth is incredibly important. But it's population growth that raises the expectations for everybody year in and year out. That this is just how things happen in Ohio.

Mike Venerable [00:54:15]:
What am I looking forward to? I think, I think when I. All those things. But the other thing that I think we talked about some today is we have an opportunity to build a different machine. We don't really have any bad habits. We don't really have any good habits. We just have excellent things we've done. But I think we are in a position because of technology and because of this moment to say we're going to build a different machine, a different culture. That is, you know, really taking advantage of all the technology advantages to leverage this in a different way.

Mike Venerable [00:54:43]:
And I always say, you know, Louisiana, New York are really great transactional venues. I'd say Houston, Texas is a pretty good transactional venue. If we can turn Ohio into a high velocity place where capital gets deployed, recycled, imported, used to grow the state, we should we take that seriously, like how are we going to do that and be world class?

Jeffrey Stern [00:55:04]:
Yeah. It always brings me back to the serendipitous confluence of factors that Atwater laid out as where we are and the opportunity ahead. I think we'll work to bookend the conversation here and I'll ask kind of a tabula rasa question of what do you wish that we had talked about here that you feel kind of an instinct to bring up when you reflect on this first year?

Mark Kvamme [00:55:34]:
I would just say be open for surprises because I don't know what's going to happen and make sure that we have the flexibility and the, as we like to call it, the tolerance for ambiguity to kind of move around all this stuff. We have not got this figured out, but we got to really focus ourselves, obviously for our investors, for our companies, but we got to be open because the world is changing so rapidly that we have to be open to embrace whatever comes at us.

Ray Leach [00:56:15]:
I think it's a great comment. I think the other element that we spend a lot of time talking about but maybe haven't mentioned as much here, and it really reflects to the network to some degree and that is the insights from our investors but also from others in Ohio are incredibly important and can shape not only how to deal with opportunities and surprises, but to bring the collective knowledge, intuition of the state of important institutions, leaders in the state to optimally address those opportunities and surprises. And that in many cases, maybe not all, but in many cases the answers are here. And this catalytic opportunity on capital, obviously we've spent a lot of time about, but it's those insights that have been under leveraged or realized that we're really interested over time to be able to optimize and catalyze in addition to the capital, because those ideas and opportunities will be accelerated by the capital that we bring.

Jill Meyer [00:57:26]:
I would say this, we touched on this, but you could do a whole separate conversation on the diversity of the economics and the opportunities across Ohio. Every part of Ohio is an economy, unique economy unto itself. And then you put those pieces together. There are limitless opportunities here. And that is a big conversation. That would be a very interesting one.

Mike Venerable [00:57:52]:
I think you could do A whole thing on just tamasic and how, like, every time we return to it, how anchoring it is, like, how important it is to think about taking that framework and bringing it here and adapting it to our world. I get you. You talked. You went back to it. You're more than. More than I have recently. But when I read it was working on the deck is where I went back to, like, where's the genetics of what we're doing? Because they have really strong, powerful knowledge that I'm surprised more places haven't thought to steal or borrow or adapt. And candidly, we are competitively a country.

Mike Venerable [00:58:31]:
You know, we're competing with other states and thinking that way, and I think we've got an advantage and we can stay ahead.

Ray Leach [00:58:40]:
Maybe one thing to add, just because we haven't, is in that is the Ohio Fund very much wants to show up in all 88 counties. This is about the entire state leaders all across the state figuring out how to enable those leaders and investors to optimize the opportunities that they have at the community level, at the city level, the county and regional level. So. So we're very, very. We're desirous and talk about it all the time. How can we show up across the entire state?

Mike Venerable [00:59:17]:
Are we allowed to ask Jeffrey a question? Turn the table? Why are you here?

Jeffrey Stern [00:59:21]:
Why am I here? Well, I am not an Ohioan, born and raised, but one in spirit. I feel and really, I think, recognize and appreciate everything that all you have outlined here today, the opportunity, the formidable nature of the entrepreneurs here, the kindness and warmth of the people, and really feel that we have an opportunity to make this place, to realize the potential of it. When I think about, how do you affect that kind of change, I haven't been able to figure out a better vehicle to do it than what we're doing here. I feel it is the lever that can get us to this vision that you guys have outlined.

Mark Kvamme [01:00:16]:
Cool. Well, thank you very much for doing this.

Mike Venerable [01:00:18]:
We're glad you're here.

Jeffrey Stern [01:00:19]:
Absolutely.

Mark Kvamme [01:00:19]:
We're glad you're here, and we're glad we're here. We're all glad. We're all glad and we're here.

Jill Meyer [01:00:27]:
Thanks, Jeffrey.

Mark Kvamme [01:00:28]:
Thank you.

Jeffrey Stern [01:00:29]:
If, if, if there was a place that you would direct people to follow up, to learn more, to get involved, where would you direct them?

Mark Kvamme [01:00:36]:
Come to Ohio. Theohiofund.com is our website. A lot of information there. We will be holding events across the state as well. Our whole idea is to bring business builders together with other business builders so that everyone realizes that the capacity and the opportunity in this state is the greatest it's ever been and will ever be, and we want to make sure that everyone participates in that. As Ray recently said, whether you're in Nelsonville or Ashtabula or Cincinnati or Toledo or wherever you are, we want to connect everyone in the state together. Because when we're together, we're hard to beat.

Jeffrey Stern [01:01:16]:
Thank you for tuning in to the Ohio Fund Report. If you enjoyed this podcast, we'd love for you to leave a review on your favorite platform and support. Subscribe to stay updated on all future episodes. You can subscribe via Apple Podcasts, Spotify, YouTube, or directly on our website at TheOhioFund.com the information shared on this podcast is for informational purposes only and does not constitute investment advice, an offer to sell, or a solicitation of an offer to buy any security. Past performance is not indicative of future results. The views and opinions of expressed by our guests are solely their own and do not necessarily represent those of the Ohio Fund. A guest's participation in this podcast does not imply an endorsement or an investment recommendation by the Ohio Fund. This podcast may include conversations with leadership of a company in which the Ohio Fund or its affiliated funds have an investment and as such, financial interest in the success of this company and there may be a conflict conflict of interest in presenting information about the company and its performance.

Jeffrey Stern [01:02:20]:
Any forward looking statements or projections discussed during this episode are based on current expectations, assumptions and estimates. Actual outcomes may differ materially due to a variety of risks, uncertainties and other factors. Listeners should consult their own legal, tax and financial advisors before making any investment decisions. For more information about the overall Ohio Fund, including our form, adv, other regulatory filings and additional conversations, please visit theohiofund.

Mark Kvamme [01:02:50]:
Com.