He’s no longer head of JobsOhio, but Mark Kvamme is still at work trying to keep companies and jobs in the region. His early-stage venture firm, Drive Capital, said Tuesday it’s equipped with a $250 million first fund to deploy to Midwest startups.
The Columbus-based fund will dish out that money to some 30 companies in the healthcare, technology, tech-enabled services and consumer industries. It’s already invested in four companies, including CrossChx, a health IT startup that developed a fingerprint identification system to prevent medical identity theft and prescription drug abuse.
The firm’s partners, Kvamme and Chris Olsen, say the Midwest is a great place to start a business because it’s affordable and close to a huge pool of customers and talent. But – and this is a big but – it’s dramatically under-served by venture funding. So they started putting together the fund in 2012 in a bid to keep great companies from having to move to Silicon Valley or the East Coast to find funding.
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Kvamme and Olsen met while working for Silicon Valley venture firm Sequoia Capital in the mid-2000s. Kvamme came to Ohio in 2011 when Gov. John Kasich tapped him to lead the nonprofit economic development group JobsOhio. He resigned from his post in the fall of 2012.
In the short time that it’s been around, the firm has been under scrutiny by local media outlets because of Kvamme’s public-sector ties. Former Ohio State University President E. Gordon Gee, also a friend of Kvamme, came under criticism when the university reportedly made a $50 million investment in the fund despite concerns from other top officials.
Olsen told the Columbus Dispatch that the fund’s investors include charitable foundations, university endowments, pension funds and other sources, in addition to some of the partners’ own money. “Big chunks” of the fund also came from outside the Midwest, he said.
The firm says it will also leverage its network to help portfolio companies secure customers and talent.
