Rev1 invests from the concept stage to a Series A round. Its portfolio startups have about 50 percent survivability rate after five years, and Walker says that rate would be lower without so much support surrounding the companies.
“We target standard returns for equity investments, but we’re really early, so our risk profile is a little higher. And then we also invest in a certain region, so that increases the risk profile a bit as well,” he says.
About half the deal flow is software IT, which has a core of data analytics. About 30 percent of the deal flow is life science startups that come from Nationwide Children’s Hospital, OhioHealth or The Ohio State University. The remaining 20 percent are food and agricultural science, advanced materials and energy companies.
Rev1 also emphasizes diversity, putting its team and the portfolio teams through inclusion training and doing outreach. About 48 percent of Rev1’s portfolio has a diverse founder or leader, which Walker says is high for the industry.
Today, Rev1 has roughly $90 million of capital under management. The organization syndicates every deal with co-investors, and last year Rev1’s portfolio raised capital from about 14 states.
Because there’s not enough organized capital in Ohio to fund the portfolio companies, Rev1 spends time outside the state working with other investors or acting as a connector for investors who come in to Central Ohio.
“When you’re growing an economy, it’s important to not put too many walls around your own region because it’s a global economy, at the end of the day,” Walker says.
Rev1 also works with community partners and is plugged into a strong referral network.
“If we met a company that is not a technology company, it just doesn’t fit our model, we have somebody to refer them to,” he says. “Those networks meet on a frequent basis, and we’re communicating back and forth. I think there’s always room for improvement, but everybody knows who the players are and is in it to grow this region.”
Board member Pamela Springer, who also is president and CEO of the startup ORIS Intelligence, believes Rev1’s well-executed vision and its team of pros who help startups figure out how to get going are attracting outside attention.
“They’ve played a significant role in the acceleration and visibility that Columbus is now getting,” she says.
Rev1 puts on targeted programs that introduce startups to the community’s corporate base — again tying everything back to the assets in your backyard. But the organization’s relationship with corporations has evolved.
While trying to nurture advisory relationships between startups and corporations, which sometimes result in investment, Walker says Rev1 began advising its corporate partners on innovation strategy. This includes relationships like the one with The J.M. Smucker Co. that began in 2018.
“We believe in the partner mentality,” he says. “We can help corporations launch their innovation programs, and instead of them having to hire their own investment team, they can partner with us to manage those programs for them.
“It’s a terrific strategic relationship for us because it helps secure Rev1’s base here in the region. And at the same time, we’re helping our corporate partnerships grow. The end result is we’re attracting innovations and entrepreneurs to the region. Net net, it’s a big win.”
Three of Rev1’s eight funds are corporate venture funds, including a $25 million venture State Auto Labs Fund founded in 2017. While these funds don’t always invest directly in Central Ohio startups, everything ties back to growing the region.
For example, the Research Institute at Nationwide Children’s Hospital has a fund through Rev1, which invests in companies that are spinning out technologies in which much of the work continues back at the institute. Walker says it’s an example of growing the overall innovation base and attracting other entrepreneurs to the region.