Video: Sherrod Brown at the 2010 DDC Fly-in in Washington, D.C.

This week, Mike McDorman and I, along with several economic development leaders from the Dayton area and the Dayton Development Coalition, traveled to Washington, D.C. for the 26th Annual Dayton Region Community Leader Fly-in (the DDC Fly-in).  On Wednesday, we heard a lot of great talks during an Ohio Congressional lunch, featuring a particularly inspiring talk by U.S. Senator Sherrod Brown. He discussed several key points, including Airbus, aerospace in the Dayton area, the auto supply industry in Dayton and the Springfield airbase. See video below:

About Sherrod Brown
Since January of 2007, Senator Sherrod Brown has held more than 130 community roundtables across Ohio, visiting each of Ohio’s 88 counties at least once to talk with local leaders and business owners, farmers and veterans, workers and families, and educators and students to find ways to rebuild our nation’s middle class.

Senator Brown worked with his colleagues on the Health, Education, Labor and Pension Committee (H.E.L.P.) to pass an historic health insurance reform bill that is now pending before Congress. This legislation would increase competition to reduce private insurance premiums, provide more insurance options so that every American can gain access to coverage, and prevent insurers from discriminating against consumers based on age or pre-existing health conditions.

In 2008, Senator Brown worked to re-authorize Healthy Start, a program that reduces infant mortality and low birth weight. In 2009, Senator Brown helped to strengthen the Children’s Health Insurance Program, which expands access to health insurance for 11 million children nationwide.

In Ohio and in Washington, Senator Brown has earned a reputation as a public official who looks to the future. His commitment to making Ohio the Silicon Valley of Clean Energy began when he wrote Ohio’s first solar energy law in 1977 as a member of the Ohio General Assembly. As a U.S. Senator, Brown is working with Ohio’s universities, entrepreneurs, labor unions, and community leaders to help utilize Ohio’s natural resources — wind, solar, and biofuels — and to develop a clean energy industry in the state.

As a result of this collaborative work, Senator Brown introduced the Green Energy Production Act of 2009 – which he first introduced in 2008. The Green Energy Production Act would encourage production of clean energy manufacturing technologies and domestic sources of clean energy. Senator Brown recognizes that creating clean energy jobs is both an economic and environmental strategy. Most recently in April 2009, he convened a ground-breaking Clean Energy Summit that connected Ohio clean energy businesses, workers, and municipalities with federal resources available through the American Recovery and Reinvestment Act of 2009.

Senator Brown is also building a coalition to revamp our trade policies. In 2008, he introduced the TRADE Act, forward-looking and pro-trade legislation which would review and renegotiate existing trade agreements while strengthening the role of Congress in trade policy making. By using trade policies to expand economic opportunity for the middle class, Senator Brown is working to expand opportunities for American manufacturing, to protect workers’ rights and the environment, and to strengthen product and food safety.

An early and outspoken opponent of the Iraq war, Senator Brown is fighting for comprehensive benefits for our nation’s veterans. As a member of the Veterans Affairs Committee, Senator Brown takes this privilege seriously and works to ensure our nation’s veterans are guaranteed the benefits they have earned.

As a Congressman representing the 13th District from 1993 – 2006, Senator Brown represented an independent voice for ordinary Ohioans and middle-class families – a man of principle who has made a career of standing up to special interests that have too much influence in Washington.

Senator Brown sits on the Health, Education, Labor, and Pensions Committee; the Banking, Housing, and Urban Affairs Committee and is Chairman of its Subcommittee on Economic Policy; the Veterans Affairs Committee; and the Ethics Committee. He’s the first Ohio Senator in 40 years to sit on the Agriculture and Nutrition Committee and is the Chairman of its Subcommittee on Hunger, Nutrition, and Family Farms.

A native of Mansfield, Ohio, Senator Brown is married to Pulitzer-prize winning columnist Connie Schultz. They reside in Avon, Ohio, and have three daughters, a son, and a grandson all of whom make Ohio their home.

>> Sherrod Brown’s website

>> Dayton Development Coalition website

ESP program has $22.5M to help companies get high-tech products to market

The ESP program

The Dayton Entrepreneurial Signature Program (ESP) is a $22.5M “loan” and “grant” program that was funded by $15M of Ohio Department of Development Third Frontier Funds (in 2006 and 2007) and $7.5M of local funds, provided by “investors” such as Wright State University, Sinclair Community College, Reed Elsevier, NCR, and the Turner Foundation.   It is run by staff at the Dayton Development Coalition (Chris Howard, John Houston, Melissa Aldridge), and companies in the Ohio Department of Development’s Region 4 qualify, including those in Springfield OH MSA / Clark Company.  It is used for loans and grants designed to help high-tech start-ups, spin-offs, and small growing companies get new products to market.  Since 2007, about 250 companies have applied, and the program has given 37 grants to 25 companies totaling $5M. 

Qualifying companies

(1) Type of company activity – The DDC has identified specific “signature areas”, which are the most favored types of company activity to fund.  Signature projects/companies are those involved in the following industries: advanced materials, composites, nanoapplications, and sensors.  They can, however, fund projects by companies in the information technology, aerospace, and human sciences, especially in the Springfield OH MSA (Clark County).

(2) Size – They have to have less than 30 employees and $5 million in annual revenue.  New spin-off companies are allowed, but there has to be sufficient evidence that they will indeed be operating separately from the parent. 

(3) Commercialization Stage & Viability – these points are usually addressed in the proposals that companies put together when applying for funding.

ESP Investments – the “loans” of the ESP program

The word “loan” is in parentheses because they function like a hybrid between venture capital and bank.  They are more expensive than fixed-asset bank financing, because they are looking to double their money, but they are like a bank in that there is usually a principle and interest payment on the money.  It is similar to venture in that often the terms will include things like royalties, percentage of profits and/or equity (for five to ten years, especially on bigger deals) in addition to principle and interest .  The amount of the financing is typically in the range of $100,000 to $200,000 (although there have been on occasion larger loans such as $600,000+ and even $1M in one instance), and this money can be used for operating capital as well as anything else the company needs to accelerate commercialization.  Within the program, there is also a quicker and smaller investment program called the “First Fifty,” which is the first $50,000 investment by ESP into a company (yes, they may qualify for multiple rounds), and this really represents the minimum financing through the ESPCould be a loan, license royalties or part of revenue, part of profits % – related to success of business.  Looking for interest,   $100-200,000.  $6-700,000.  Even one at $1M.  Investments can be quite large.  Some would take a position in the company for a period of time, 5-10 years.  Or an extra reimbursement based on profits or products sold. 

Development Services – the “grants” of the ESP program

The word “grant” is in parentheses because this is not money given directly to companies but to service providers that will help the company move its product farther along the commercialization pipeline.  For example, development service grants can be approved for prototype design and manufacture, market research/studies, key personnel recruitment, IP protection, incubation space/services, consulting, and market plan development.  Typically, the money goes to outside consultants (e.g., in the case of market studies) which the DDC generally prefers.  A good market research study, for example, can be $9,000 to $10,000.  The amount of the grants typically range between $10-20,000, but can be larger if, for example, ESP is providing financing as well, especially if it helps minimize risk.  For example, if the ESP program was doing a “loan” of $1 million, the program might be willing to spend up to 5 to 10% on development services to help ensure the product goes to market and is successful.   

Process

The initial process is relatively simple: (1) Contact an ESP staff person or local contact, (2) have meetings to get a pre-assessment of eligibility and evaluation of product/technology viability, (3) draft and submit a proposal, and (4) move through the rest approval process with an assigned ESP staff person.

Your initial point of contact should be Nancy Bridgman, Director of the NETI Incubator in Springfield, OH.  Nancy is on the TechNet Committee (which makes recommendations on development service grants) and can be contacted by email at nbridgman@centralstate.edu or by phone at (937) 376-6192. 

You can also feel free to call John Houston, who manages the financial part of the program, and who is in the interview at jhouston@daytonregion.com or by phone at 937.229.9076. And, of course, you’re also free to contact me as well at dzak@greaterspringfield.com or 937.631.5315.

>> Interview with John Houston on ESP – http://bit.ly/seespi 

>> DDC Homepage for ESP – http://bit.ly/CJHaY
>> ESP brochure + proposal outline (application) – http://bit.ly/KroZU
>> 5/15/2009 DBJ article on $5M given out through ESP – http://bit.ly/koQ0D
>> OTF Press release on funding to DDC for ESP – http://bit.ly/teX2X

>> Renegade Materials – one of companies funded – http://bit.ly/18bCpD
>> DDN Photos of Renegade – http://bit.ly/18IMuR
>> Renegade homepage – www.renegadematerials.com
>> RFiD – article on another company funded – http://bit.ly/161as7

>> DDC Staff Contact page – everyone involved w/ESP – http://bit.ly/R3Euf
>> Chris Howard who managed program, WSU alum of year – http://bit.ly/ccEel
>> DDC on LinkedIn, Chris Howard & Melissa Aldridge – http://bit.ly/xgKtX
>> Nancy Bridgman of the NET Incubator hosts conference – http://bit.ly/77D8O

Video – John Houston about $22.5M ESP high-tech loan + grant program

Part 1 of interview

This is the first part (about 9 minutes) of an interview with John Houston, the financial manager of the Entrpreneurial Signature Program, who is housed at the Dayton Development Coalition.  John talks about the $22.5M ESP program which is available for Springfield OH MSA / Clark County (and the entire Dayton/Springfield region).  The second video insert is the continuation of the interview (a little over 4 more minutes).

Part 2 of interview