Cincinnati Ecosystem

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Blog Post:

When you think of an emerging entrepreneurial ecosystem, you probably think of Austin or Boulder, not a moderately sized city deep in the heart of the midwest. However, Cincinnati is positioning itself as an entrepreneurial ecosystem.

The Fortunate 500 companies that call Cincinnati home, such as Kroger, P&G and Macy's, are investing in local resources through Cintrifuse, which encourages ecosystem development. The increase in resources and capital in Cincinnati's ecosystem points to the positive trajectory of the system, but many areas of the ecosystem lack sufficient resources.

History of Entrepreneurship

Local and state governments have historically helped ignite the Cincinnati ecosystem. Individual grant programs provide the Cincinnati Children's Hospital Medical Center, University of Cincinnati and the Cincinnati Regional Chamber with funding for high-tech projects. Until recently, the Fortune 500 companies have been largely nonexistent in the ecosystem.

Accelerators in Cincinnati

The past few years have seen an emergence in entrepreneurial resources available for Cincinnati. Accelerators now span the tristate area of Ohio, Kentucky and Indiana. Less than ten years ago, you would have been pressed to find one accelerator in the region.

The Brandery, located in Cincinnati and founded in 2010, was inspired by successful accelerators such as Austin's Capital Factory and Boulder's TechStars. The Brandery offers a three-month program for seed-stage companies that utilizes the already existing strengths of Cincinnati: branding, marketing and design. Companies receive $50,000 in seed funding, office space, branding identity, legal support and more in return for 6% equity stake in the startup.

The Brandery has a portfolio of twenty-nine startups. Notably, the Brandery accelerated FlightCar, "a marketplace that allows owners flying out of an airport to rent out their cars to arriving travelers" that was acquired by Mercedes Benz and Skip, "a mobile checkout solution that allows you to scan items as you go through the store and skip the checkout line." The Brandery has been ranked a top-ten U.S. accelerator.

Launched in 2012, UpTech is a Greater Cincinnati tech accelerator program for data-driven startups. Located across the river from Cincinnati in Covington, Kentucky, UpTech was established as an effort by Northern Kentucky University College of Informatics and the Greater Cincinnati community. Up to ten startups go through a six-month accelerator program and receive up to $50,000 during the program. UpTech differs from traditional accelerators since it has hundreds of support staff in the form of community volunteers and interns from Northern Kentucky University. Successful UpTech startups include online walking-tourism planning platform, Touritz, and software and data management company, Liquid.

The third and newest accelerator in Cincinnati is three-year old faith-based Ocean Accelerator. Ocean runs a five-month program that provides mentorship, monetary support in the form of a $50,000 note, branding and legal advice. As the only faith-based accelerator in the nation, Ocean's curriculum features weekly bible studies. Alumni of Ocean include Casamatic, a real estate technology company that increases buyer engagement, and Cerkl, a startup that increases engagement.

University Resources

The University of Cincinnati and Xavier University provide student and researcher accelerator programs. The University of Cincinnati’s Technology Accelerator for Commercialization provides full-time faculty and staff with the opportunity to develop intellectual property at the University of Cincinnati. In order to be considered eligible for the TAC program, the technology must be developed at the University of Cincinnati and have a focus on commercialization. Start-up companies are not eligible for the TAC program.

Xavier University offers a business program aimed to boost the Greater Cincinnati economy. Called X-LAB (short for Xavier Launch a Business), the seven-year old competition provides entrepreneurs (including students) opportunities to launch a business. The Williams College of Business supports the winners by providing the business expertise of its professors, executive mentors and MBA students.

Cincinnati’s Venture Capital Woes

Despite these resources, the ecosystem is not prCincinnatiFirstRoundoducing enough successful start-ups to be considered a stable ecosystem. It’s generally held that a solid ecosystem closes around thirty to thirty-five deals a year. Cincinnati falls far below this. While the number of Cincinnati first rounds has been increasing, it appears that ecosystem is leveling out only an average of five first rounds per year.

The largest barrier to Cincinnati’s emergence as an entrepreneurial ecosystem is the absence of venture capital entering the system. Despite an increase in first rounds,CincinnatiVC current VC levels are not indicative of a successful ecosystem. Cincinnati VC peaked in 2002 at $343 million. The closest the ecosystem came to meeting 2002 VC levels was $235 million in 2014. The average VC entering the system is $139 million per year. Compared to VC levels of emerging ecosystems like Austin or Denver, Cincinnati’s VC is weak and not supportive of an ecosystem.

Seed-Stage Funding

Cincinnati does have stable seed-stage investors, which bodes well for the future of the ecosystem. CincyTech, a public-private seed-stage investor, was the first effort by the local Cincinnati government to establish an entrepreneurial ecosystem. Established in 2001, CincyTech’s mission has been to strengthen the regional economy through the creation and expansion of technology companies in Southwest Ohio. CincyTech is investing out of its fourth and largest fund, a $30.75 million seed-stage fund bigger than its first three funds combined. Queen City Angels is the region’s longest running angel group and is currently investing out of its largest fund of $10 million.

StartupCincy is self described as "the driving force behind [Cincinnati's] new economy...a rallying cry." In addition to maintaining an exhaustive list of upcoming network, education, accelerator and developer events in the city, Startup Cincy connects venture capitalists and angel investors to startups. StartupCincy is credited by the Cincinnati Business Courier as "one of the most influential groups leading the renaissance of Cincinnati's startup community."


One of Cincinnati’s most unique elements of its ecosystem is Cintrifuse. Established in 2011 with the goal of creating a sustainable technology driven economy for the Cincinnati metropolitan area, Centrifuse manages a fund of funds. This fund of funds gives corporate investors access to over four hundred startups and creates a network of venture capital funds that invest in Cincinnati startups. Centrifuse works with both investors and startups to make lasting connections, pairing startups with potential customers and corporations with startups that need mentorship. In addition, Centrifuse offers co-working space in Over-the-Rhine and entrepreneur focused educational programs.

Big companies like Kroger, USBank, the Greater Cincinnati Foundation and Duke Energy invest in Centrifuse because they depend on Cintrifuse’s help to source innovation for their businesses and grow the region’s startup ecosystem. In turn, Cintrifuse invests in VC firms such as Allos Ventures, Mercury Fund and Sigma Prime Ventures. Cintrifuse also provides co-working space and entrepreneur education.

Over-the-Rhine, a neighborhood of Cincinnati, is now home to Centrifuse, CincyTech and the Brandery. The companies going through the Brandery are only feet away from CincyTech’s capital, which provides unique collaboration opportunities.

Success in Cincinnati

CincyTech garnered considerable national attention after providing Lisnr, a company that has invented an ultrasonic technology for transmitting data through sound, with Stage A capital. Lisnr came to fruition aboard the 2012 StartupBus, a competition where participants launch a company in 72 hours on a bus headed to Austin for the South by Southwest Festival. Since Lisnr's establishment, they have received $10 million in Series B funding from Intel Capital and garnered accolades from CNBC’s Disruptor 50 list, Cannes Lions International Festival for Creativity and Fast Company’s Innovation by Design Awards.

Not to be overlooked, Queen City Angels provided the initial stage funding for Assurex Health. Now ten years old, Assurex grew out of research at Cincinnati Children’s Hospital Medical Center and the Mayo Clinic. Its singular product is the GeneSight Test, which analyzes twelve genes that influence mental health and psychoactive drugs that treat a spectrum of mental-health disorders. Myriad Genetics purchased Assurex Health in April 2016 for $225 million with another $185 million to come when performance-met stipulations are met.

Untapped Potential

For an ecosystem that really only started in 2010 with the establishment of the Brandery, Cincinnati is beginning to establish some of the resources it will need in order to emerge as an entrepreneurial ecosystem. However, VC and the number of first rounds need to increase in order to make Cincinnati an attractive ecosystem for startups and investors.