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Rocket Ventures new fund manager eyes broader borders of region’s business ecosystem


Bob Savage, Jr., fund manager of Rocket Ventures, can see for miles from his office on the 15th floor of Edison Plaza. He says he wants to better serve the 18 counties that make up northwest Ohio.

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From his 15th floor office in the Edison Plaza office tower in downtown Toledo, Bob Savage, Jr., can see the Maumee River, East Toledo, and Oregon.

But as the man recently tapped to oversee all of the Regional Growth Partnership’s Rocket Ventures operations, Mr. Savage has a vision that extends much farther than just a few miles.

As part of a mandate by the state of Ohio, Rocket Ventures — a venture capital operation with the task of fostering and nurturing entrepreneurs and early-stage start-up companies — is trying harder to look farther out in the region to better serve the 18 northwest Ohio counties that make up its service area.

“What we need to do in northwest Ohio is not any different than some other region is doing, and we don’t need to reinvent the wheel here,” Mr. Savage said. “We just need to go look at the best practices and start doing more of them.”

Mr. Savage, 46, said he believes what would best serve the region and aid would-be entrepreneurs is a better venture capital “ecosystem” — a network of chief executive officers, researchers, professors, lawyers, financiers, accountants, businessmen, and other experts who can step in at any critical point and help an entrepreneur trying to get a company beyond the idea stage.

“Certainly, we do not have the ecosystem that a Cleveland and Columbus and Cincinnati have. But we have more of it than we had six or seven years ago, and we’re continuing to build that. I really view that as sort of the main charge of Rocket Ventures, to build that ecosystem,” he said.

Rocket Ventures, which started in 2007, is two components.

Rocket Ventures LLC provides free help and services to companies as they form. It provides them with facilities and site searches, training and staffing, commercialization, business assistance and planning, training and staffing, public relations, patent application, and technology-innovation expertise.

The second component is the Rocket Ventures Fund — a $22.5 million venture capital fund, owned by the RGP, that can invest between $250,000 and $750,000 in “preseed” or “early start-up” companies. The fund, which has been managed by Mr. Savage since it was set up, was capitalized by $7.5 million contributed by private investors and $15 million from Ohio’s Entrepreneurial Signature Program, a seed fund controlled by Ohio’s Third Frontier program.

Through last year, Rocket Ventures LLC, the services firm, was headed by Dan Slifko, a former businessman and entrepreneur. Mr. Slifko remains the firm’s chief operating officer.

But as of Jan. 1, Mr. Savage became president of Rocket Ventures LLC, tasked with providing the operation with a broader, more regional perspective.

The move came after a shakeup in which the University of Toledo, which had owned part of Rocket Ventures, severed its ties, giving the RGP sole ownership.

The shakeup came after a 2012 state report that criticized Rocket Ventures for being too focused on the Toledo area. The state Third Frontier Commission temporarily held up $1 million earmarked for the Rocket Ventures fund until it could demonstrate improvement.

Harlan Reichle, chairman of the RGP board of directors, said Mr. Slifko did a fine job running Rocket Ventures LLC. “But as part of our evolution, and how this was all working, and what the state wanted, and how to make them happy, we recognized that we needed someone with a different set of skills to run the thing. Bob is better in that role,” Mr. Reichle said.

What Mr. Savage brings to his dual role of president of Rocket Ventures LLC and manager of the Rocket Ventures fund is a wealth of experience in venture capital.

The Toledo native’s path began in the early 1990s at the University of Pennsylvania’s Wharton School of Economics, where he majored in finance and entrepreneurial management.

“When going through school, I had several internships and one was at a venture capital company,” Mr. Savage said, referring to SeaGate Venture Management, a subsidiary of the former Trustcorp.

“That was where I got my introduction to venture capital,” he said.

After graduation, Mr. Savage returned to Toledo and joined a start-up firm, New Ways Concepts. After five years there he spent a year and a half at a consulting firm, Monoky & Associates, before starting his own firm.

Mr. Savage isn’t the first entrepreneur in his family.

His father, Bob Savage, Sr., and uncle John Savage started Savage and Associates in Toledo in 1957, and it has grown into a large financial services company.

Bob Savage, Sr., is now chairman emeritus of the company and a prominent civic leader and philanthropist. John Savage died in 1993.

While the younger Bob Savage is extremely proud of the family business, he said he didn’t go to work there because he wanted to make it on his own.

Solid background

John Monoky, a former University of Michigan professor and marketing expert, said that when he hired Mr. Savage, “he was young but very good. … He’s got great people skills, and he went to Wharton, which gave him good financial skills.

“But I guess the best piece of that puzzle is he’s done everything on his own. He understands the struggle and dealing with the angels [investors] and the start-ups,” Mr. Monoky said.

When Mr. Savage left Monoky & Associates in 1997 to start Savage Consulting, he envisioned it as a consulting firm for small and medium-size companies.

He began with a couple of clients but said, “I starved for a couple of years,” he said. “I was trying to build a client base and convince people that they should hire some kid who was 30 years old to give them strategy and advice on their company,” he said.

Mr. Savage said the experience gave him some good insights into building and running a company. “The truth is, running any company is not easy, and starting one is even harder most of the time,” he said.

Eventually, he gained some smaller, privately backed firms as clients and others seeking venture capital — an area he understood well. “I started getting a little bit of a reputation in that space,” Mr. Savage said.

Angel investors

By 2003, he had developed relationships with a number of private investors or “angels” in northwest Ohio and southeast Michigan and decided to organize them into a venture capital fund — CoreNetwork. Core stands for Creating Opportunities for Regional Excellence.

The fund still exists and has a 60 percent track record of funding successful businesses in an industry where 30 percent is considered successful. Mr. Savage still manages CoreNetwork, which has about 35 private investors who provide about $25,000 to $35,000 each to fund start-ups.

Mr. Savage also was a partner from 2011 through 2012 in Plymouth Management Co., the management firm that oversees Plymouth Venture Partners, a $40 million venture capital fund in Ann Arbor.

But he gave that up to focus on managing the Rocket Ventures fund and CoreNetwork. “I was being stretched too thin,” he said.

Now as the man charged with expanding Rocket Ventures’ scope and visibility, Mr. Savage recognizes that all his experience will be needed and his abilities tested.

“The truth of the matter is, building the ecosystem takes as much time as anything. It can take 80 hours a week, if I had that time. I will still stay involved on the investment side,” he said. “But fortunately, it’s not just me running the fund here. I have a full team on services side,” he added.

The right person

Many feel Mr. Savage is up to the task and the right person for what is needed.

“We needed to go out and expand the number of people involved in this, the number of investors, the number of companies we’re serving,” Mr. Reichle said. “We felt Bob had a lot of credibility and a lot of contacts in that realm. He’s got the big-picture perspective.”

Mark Horne, chief executive officer and managing partner of Plymouth Venture Partners, said Mr. Savage is “great at developing companies in their early stages of development, in terms of building a business up, and going through those first stages of commercialization and helping a company think through their strategic plan.

“Those are easily his best skills and it’s really why he returned to [CoreNetwork] and Rocket [Ventures]. … Helping companies early, that’s really his first love,” Mr. Horne said.

Since it began in 2007, the Rocket Ventures organization has supported 45 companies with grants, loans, investments, ​or services. Nineteen of those 45 firms have become portfolio companies, that is, firms receiving money from the Rocket Ventures fund. The 45 firms had $45 million in sales and $18 million in payroll.

Mr. Savage is the first to admit that, like any fund manager, he has guessed right and wrong when picking start-ups to invest in.

At CoreNetwork, he supervised an investment in 2005 in American Broadband & Telecommunications, a Sylvania firm that provided Internet and phone service to rural and suburban areas of northwest Ohio and southeast Michigan. It is now a $20 million company with more than 40 employees.

More recently, Rocket Ventures took a flier on Nextronex, a company that makes devices to help power solar panel arrays. Nextronex got a $675,000 investment from Rocket Ventures in 2008 and has grown to more than 10 people and about $5 million in sales a year.

At Rocket Ventures, Mr. Savage OK’d an investment in Mithridon, an Alzheimer’s disease drug development firm that came out of the pharmacy school at the University of Toledo.

“They actually had great science, and it’s one of the ones that bothered me the most because it did well, but the amount of money that needs to go into a drug development company — you will spend literally probably at least $50 million to get a company on the market,” Mr. Savage said.

Mithridion raised $10 million overall in venture capital funds, but it needed $50 million. In the last downturn, those kinds of funds for high-risk health-care firms dried up. “Even though it was doing well from a technical standpoint, it had to close its doors,” he said.

Happy ending

Jeff Beamsley isn’t one to question Mr. Savage’s track record.

In 2004 Mr. Beamsley, then-CEO of Hilgraeve Inc., a software firm in Monroe, asked Mr. Savage to join the firm’s board and advise it on how to grow its business. “He had a plan to see some or all of the company grow to a specific size after four years,” Mr. Beamsley said.

In 2008, Hilgraeve reached its goal. Most of the firm and some key assets — software that connects medical labs and prescription databases — were acquired by Detroit’s Compuware and added to its Covisint information technology unit.

Last year, Compuware spun off Covisint into a $98 million public company.

Mr. Savage “has a very good business mind and a passion for venture capital. He also has deep [venture capital] connections,” said Mr. Beamsley, Covisint’s director of partner programs.

“I also think he has a lot of patience, which is part of what you need in dealing with businesses that are just kind of figuring out how to get going,” Mr. Beamsley said.

Mr. Savage said that as he builds his “ecosystem,” the key is to get the private sector more involved.

“Truthfully, the ecosystem in northwest Ohio now is, you’ve got Rocket Ventures, you’ve got the University of Toledo, ProMedica, which is starting to do more commercialization and innovation, and after that there's a fairly significant drop,” Mr. Savage said.

“Some people look at the Third Frontier and say, ‘That’s the public part.’ But there really shouldn’t be a separation between the public and the private part of the ecosystem because all need to operate together,” Mr. Savage said.

“One of our main jobs right now is to build more and more partnerships into the private sectors and the base of assets we have here. Because we really do have a good base of assets in northwest Ohio. They just haven’t been connected before.”

Contact Jon Chavez at: or 419-724-6128.

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