You have reached your limit of free articles this month.

Enjoy unlimited access to SpringfieldNewsSun.com

Starting at just 99¢ for 8 weeks.

GREAT REASONS TO SUBSCRIBE TODAY!

  • IN-DEPTH REPORTING
  • INTERACTIVE STORYTELLING
  • NEW TOPICS & COVERAGE
  • ePAPER
X

You have read of premium articles.

Get unlimited access to all of our breaking news, in-depth coverage and interactive features. Starting at just 99c for 8 weeks.

X

Welcome to SpringfieldNewsSun.com

Your source for Clark and Champaign counties’ hometown news. All readers have free access to a limited number of stories every month.

If you are a News-Sun subscriber, please take a moment to login for unlimited access.

Former JobsOhio head seeks investors for venture fund

Ohio State put $50M toward high-risk, high-reward investment.


Former JobsOhio president Mark Kvamme pitched his risky new venture capital fund to two of the state’s five public pension systems and convinced Ohio State University to invest $50 million.

The Ohio Public Employees Retirement System met with Kvamme in January to hear his sales pitch on Drive Capital Fund I but took a pass, a pension system spokeswoman said. OPERS has about $1 billion of its $80 billion portfolio invested in venture capital.

The Ohio Police & Fire Pension Fund met with Kvamme and his business partner Chris Olsen in July, said OP&F spokesman Dave Graham. “Investment staff has not completed any due diligence research on Drive Capital so it would be premature to comment on the possibility of a future commitment to this fund,” Graham said.

According to filings with the Securities and Exchange Commission, Kvamme and Olsen have raised $181 million of $300 million for the new fund. The minimum investment is $1 million.

Venture capitalists pool cash from investors, put the money into a stable of start-up companies and then help guide the new businesses. If the businesses succeed, the profits for the venture capitalists can be fabulous. If the businesses fail, the investors lose their money.

“The winners are great and you hope the winners are better than the ones who don’t come through,” said John Taylor, head of research for the National Venture Capital Association. Historically, 14 percent of companies backed by venture capitalists go public and 10 percent are acquired, he said.

Taylor said it is a big plus for Ohio to have Kvamme starting a regional venture capital fund.

“He is an experienced investor and he sees opportunity there,” Taylor said. “And he is willing to put down roots and roll up his sleeves and get to work there.”

Kwamme is also close to Ohio Gov. John Kasich and former Ohio State University President E. Gordon Gee. Ohio State has not responded to a public records request or questions about the Drive Capital investment decision, which came after Gee retired as president on July 1.

Kvamme could not be reached for comment.

OSU Senior Vice President for Business and Finance Geoff Chatas told the Columbus Dispatch that the Drive Capital investment was part of a broader strategy to increase jobs and improve Ohio’s financial future.

The investment will more than double the $22 million OSU had previously invested in venture capital funds, according to university investment reports. Ohio State’s overall investment portfolio is $3.1 billion.

Kvamme, a native of California, was a venture capitalist at Sequoia Capital in Silicon Valley where he helped launch Linkedin, MarkLogic and FunnyOrDie.com. He arrived in Ohio less than three years ago to serve as Kasich’s development director for $1 a year in pay. He later shifted to run JobsOhio, Kasich’s new private economic development agency, but resigned in November 2012 to start Drive Capital.

In his short time in Ohio, Kvamme has connected with powerful business and community leaders, bought property north of Columbus and spent $97,500 on three grand champion farm animals at the 2013 Ohio State Fair.

When Kvamme suffered serious injuries in a motocross accident, Gee and Kasich visited him in the hospital. When Gee was under fire for spending millions on travel, parties and housing, OSU asked Kvamme to defend him.

Taylor said successful venture capitalists are well connected to investors and have a strong pipeline of businesses seeking backing.

The Ohio Democratic Party, though, says Kvamme is cashing in on his relationship with Kasich to raise millions from public pension funds for “risky, untested investments.”

“The state entities that have entrusted tens of millions of dollars to the governor’s close friend Mark Kvamme should stop stonewalling questions and finally disclose all details about these deals to prove public dollars won’t be lost,” party spokesman Jerid Kurtz said. “Ohioans deserve better.”


Reader Comments ...


Next Up in Politics

Lake events at Clark County Fairgrounds could bring in millions
Lake events at Clark County Fairgrounds could bring in millions

The Clark County Fairgrounds will begin hosting water and cross country events at its lake this summer, which tourism officials say could pump millions into the Springfield economy in the future. Later this year, the fairgrounds will host the 24th annual Solar Splash on June 7 to 11, a five-day solar boat regatta previously held in Dayton and known...
Another round of base closures is likely in 2020, Turner says
Another round of base closures is likely in 2020, Turner says

Rep. Mike Turner Wednesday told a crowd of Dayton civic and business leaders that they should be prepared for the possibility of a round of base closures in 2020 – a move that could have a sweeping impact on Wright-Patterson Air Force Base. Speaking at the Dayton Development Coalition’s annual fly-in in Washington, D.C., Turner, a Dayton...
Ohio Budget: House targets opiate addiction crisis
Ohio Budget: House targets opiate addiction crisis

Ohio House Republicans on Tuesday announced they’re pouring an extra $170.6 million into fighting the opiate addiction crisis. As Ohio leads the nation in accidental drug overdoses, state leaders are reaching for multiple fixes. The House budget plan carves out $170.6 million, including $12.2 million for prevention and education, $130 million...
Dayton leaders in D.C. to push local issues
Dayton leaders in D.C. to push local issues

Two former Ohio congressmen Tuesday expressed grave concern about President Donald Trump’s handling of North Korea, saying they worry that a diplomatic misstep could provoke North Korea to attack South Korea. Speaking before the Dayton Development Coalition Tuesday, former Reps. David Hobson, a Springfield Republican and Tony Hall, a Dayton Democrat...
Ohio House budget proposal would eliminate Municipal Clerk’s office
Ohio House budget proposal would eliminate Municipal Clerk’s office

An item in the Ohio House of Representatives biennial budget proposal could consolidate the clerk of courts offices in Clark County, if approved. The proposal would eliminate the office of the Municipal Clerk of Courts in Clark County and roll its duties into the Clark County Clerk of Courts Office, according to House Bill 49, which was released Tuesday...
More Stories