Some Third Frontier job funds going to those on short list

COLUMBUS (AP) — A panel controlled by the governor has hand-picked contenders in the latest round of bidding for a pair of high-tech Third Frontier venture funds, breaking with past practice that based awards solely on merit.

The nine-member Ohio Third Frontier Commission opted for the first time to limit eligibility for its two entrepreneurial funds in response to tough economic conditions, said executive director Norm Chagnon. Grants for those funds will go only to business entities that have a track record with the venture-capital program, including several tied to generous political donors.

Chagnon said investment experts and commission advisers were unanimous is recommending the step. He said business startups that might have taken off quickly in a better economy are taking longer to stabilize and finding continuing, or “later-stage,” funding is difficult.

“The need was to create a longer runway for the later-stage companies as we’re waiting for the economic market to open up,” he said.

So the commission handed an exclusive shot at the funds to 24 entities, mostly venture funds and a handful of others, with a proven track record running venture funds. The decision meant just two hospitals and four higher- education institutions, including one community college, were allowed to bid.

Other entities included Bio- Enterprise, Early Stage Partners and JumpStart Inc. in Northeast Ohio, TechColumbus and its subsidiaries in central Ohio, and the Blue Chip Ventures and Entrepreneurs Fund LLC in Cincinnati.

A review by The Associated Press found lobbyists, executives and directors for the chosen entities and their spouses have given at least $220,000 to Ohio political campaigns in recent years. They have supported both Democratic and Republican state leaders who control the future of the program.

A joint committee of the state House and Senate is scheduled today to decide how much voters should be asked to pump into the successful initiative, one of the few bright lights on Ohio’s job-creation horizon.

Gov. Ted Strickland initially proposed $1 billion. That figure was pared back to $950 million by the Ohio House and to $500 million by the Ohio Senate, and the two chambers now must compromise.

Campaign filings show that House Speaker Armond Budish collected more than $13,000 from high-tech representatives as the debate raged last month.

JumpStart executives, for example, have contributed nearly $23,000 to Strickland and other Democrats. JumpStart director Ken Semelsberger, a senior Eaton Corp. vice president, has given almost $26,000 to Republicans.

Jamie Ireland, a managing director at Early Stage Partners, has given at least $23,000 to Ohio political campaigns, including $9,200 to Strickland, $8,600 to state Sen. and former House Speaker Jon Husted, $3,000 to Budish, and $2,500 to Senate President Bill Harris.

The Mercurio family affiliated with the Entrepreneurs Fund has given $78,000 mostly to Republicans, including $10,000 to Husted.

Harris and then-Speaker Husted raised a stink last year over the Strickland administration’s handling of the Third Frontier program.

The two made a dramatic appearance before the commission to complain about efforts to take grant awards in-house at the Ohio Department of Development.