Ohio’s Experiment: The O.H.I.O. Fund Bets on Itself

In 1949, Ohio sat at the center of American prosperity. 

Cleveland was the nation’s second most affluent metro area. Toledo, Dayton, Akron and Youngstown all ranked among the country’s top twelve most prosperous cities. 

In other words, a large concentration of localized prosperity in the most prosperous nation on earth… was in Ohio.

Through the middle of the 20th century, the state’s industrial might may have seemed permanent. Steel, rubber, oil, aerospace, consumer goods… much of the world seemingly depended on the things Ohio made, and made well. Then came a well publicized period of increased globalization and de-industrialization… and with it job losses and capital flight. 

The state, like many of its Midwest neighbors, almost hollowed out.

Today, a group of Ohio leaders wants to reclaim that mantle of prosperity. 

They call it the O.H.I.O. Fund and their model borrows from Singapore’s sovereign wealth fund, Temasek: invest and reinvest in Ohio itself, creating a permanent pool of capital that can compound over successive generations.

“We are in earnest trying to build the first private state sovereign wealth fund,” Jeffrey Stern, Principal at the Fund, told us in an interview. “Private in that we’re raising private dollars,” he explains “sovereign in that we are investing exclusively in Ohio.” The idea, he says is a “permanent pool of capital” with the ultimate goal of “fundamentally altering the trajectory of the economy of the state”

The Idea That Wouldn’t Go Away

The notion first took root when Mark Kvamme moved to Ohio in 2011. Kvamme is a Silicon Valley veteran, a former partner at Sequoia, was a Board member at Linkedin and Co-founded Drive Capital. The Columbus, Ohio, VC firm even says on their own site that “the greatest emerging market for VC is America.” Kvamme told a recent podcast hosted by Stern and featuring the other founding members of the O.H.I.O. Fund, that he was struck by the state’s latent advantages: top-ranked aerospace, global consumer goods brands, world-class steel and manufacturing capacity. What he saw was missing? Capital.

“I’m a big believer that capital is the lubricant for innovation,” Kvamme said in the recording. “And since capital had left the state, most of our industries were old industries. Most of the investments were old investments.”

He thought about what Singapore had done. In 1974, it was then effectively a third-world economy with a GDP equal to that of Jamaica. The island state then pooled $180 million by selling state assets: a detergent factory, a shoemaker, even a bird park. They reinvested those proceeds at home and today, Temasek manages over $400 billion.

While noodling on the subject, he went to Ray Leach, the longtime head of JumpStart in Cleveland and asked him whether they could build the “Temasek for Ohio”. Leach had himself spent two decades wrestling with the capital gap in the state.

“Most of the local money taking the early risks was from Ohio, but as our companies began to thrive, most of the capital fueling their growth came from outside the state,” Leach said in the same interview. “Mark’s idea was a bullseye. Our aspiration over the next decades would be for the O.H.I.O. fund to invest hundreds of billions of dollars into the Ohio economy over future generations.”

They recruited two more partners: Mike Venerable, who led Cincinnati’s CincyTech, and Jill Meyer, then CEO of the Cincinnati Chamber. Together, the four founding partners brought eighty years of executive leadership across the state, and a shared conviction that Ohio had to stop waiting for outside capital to notice and therefore fund the great businesses in the state.

And the stakes aren’t just financial. For the founders, it’s personal. 

Venerable describes In the podcast walking along the river in his hometown of Hamilton, Ohio, remembering the paper mills and foundries that once provided middle-class jobs when he was growing up there. “I guess I’m a little pissed off,” he admitted. “This is the moment. What else am I going to do that’s this compelling, this impactful anywhere else?”

Meyer framed it in generational terms. “To think I could have an impact on the state that I hope my son stays in and continues to build in… this is a once-in-a-lifetime opportunity to really leave a thumbprint.”

Raising the Pool

Skepticism came early. According to Kvamme, the first year and a half of explaining the concept and gaining buyin was “really hard”. Some investors wanted to invest only in specific areas, others asked whether Ohio was big enough for a $500 million fund and still more questioned if a multi-asset evergreen vehicle - spanning tech, real estate and private equity amongst others - could work in a single state.

It took those eighteen months and around 400 meetings, but they closed their first $100 million. Anchors included Huntington Bank CEO Steve Steinour, the Castellini family, the Edwards family, Western & Southern, and the Cleveland Foundation.

Momentum followed. By its one-year anniversary this summer, the Fund had raised $238 million and had already deployed $134 million into 19 investments across Ohio’s economy.

Portfolio investments range from venture studio Vessel, to online dog food store Sundays for Dogs and financial services player Splash Financial. In some cases, the Fund stepped in where outside money may have tried to dictate less favorable terms.

Kvamme pointed to Sundays for Dogs founder Michael Waxman, who needed ‘just’ $15 million, “which in the scheme of things was not that much money… the only way he was going to get money was these guys flying in from… around the world trying to give him a $50 million check for this and they want first refusal to buy his company… well, the O.H.I.O. fund thankfully was there… we put together the 15 million bucks and now the company's doubled again since our investment”

Why Ohio, Why Now

The founders believe the timing is different from past efforts to improve the state of investment capital in Ohio. “I think it would have been very difficult to do this from 2000 to 2010, because … the confidence wasn't there. The financial crisis had just happened.” Kvamme said. 

The founders of the fund agree that conditions have changed. Those conditions include the decoupling from Asia, reshoring of manufacturing, exponential demand for energy, AI-driven automation of industry, and the influx of data centers.

Ohio has advantages in each. Advanced manufacturing remains deep. Aerospace has deep historical roots, all the way back from the Wright Brothers to GE Aviation and NASA’s Glenn Research Center. Healthcare is anchored by the Cleveland Clinic and Nationwide Children’s Hospital. Logistics thrives on geography, with Stern pointing out that 60% of the North American population is within a day’s drive of Ohio.

And then there’s digital infrastructure. In the past year alone, Microsoft, Google, and OpenAI have all announced massive data centers in the state. “Availability of land, availability of power… those are the limiting reagents for data center development,” Stern said. “We have those two assets… here in Ohio”

“If you take a realistic assessment of where the epicenter for re-industrialization can be, you could make the case it’s Ohio,” Stern argues. When pressed on this topic, particularly when comparing Ohio with its Midwest neighbors, he references a quote that he likes to cite from time to time by Caleb Atwater, an Ohio politician and historian, who wrote of the Buckeye state in 1838, ‘‘Our position in the Nation, is peculiarly felicitous, as to soil, climate, and productions, and it will be our own fault if we are not the happiest people in the Union.”

Stern uses this as the chance to further emphasize his point, to the extent that by the end of this conversation, he had us convinced as well: “we're (a) top seven state in the country (and) we're a top 25 country in the world… but we just don't invest in ourselves as if that were true. What if we did?”

Building a Network, Not Just a Fund

Beyond capital, the Fund is deliberately trying to weave Ohio’s business elite into a single network. Over 108 investors were involved in the first fund, and roughly a third came from Cleveland, a third from Columbus, a third from Cincinnati.

The balance was intentional. Kvamme recalled about his time at Jobs Ohio that “I saw Cleveland competing with Columbus for a job and Dayton competing with Akron. I go, ‘Guys, you're not going to win a, you know, a world class company, if you're just coming in as Cleveland or just coming in as Columbus… you got to come in as the state of Ohio.’" 

Investors include those in traditional industries: real-estate developers, logistics firms, and service providers. The pitch? Together, they can offer portfolio companies nearly everything they need. “I like to say we’re one phone call away from anything,” Kvamme said. “I don’t care if you want a small nuclear reactor, we probably can help you out.”

That network multiplies the impact. Sidecar vehicles let investors co-invest in specific deals. Portfolio CEOs connect with each other. Founders who once raised entirely from out-of-state now know Ohio capital has their back.

A Permanent Pool

Unlike most funds that invest in innovation or entrepreneurship, the O.H.I.O. Fund is evergreen. Returns are reinvested, compounding the pool instead of being distributed back to investors. That structural choice is what makes the Temasek analogy more than just a branding or positioning choice.

“We are trying to build something that is novel here. There isn't an approximate word that exists for (it) because it genuinely is new” Stern said. He uses the Temasek example again, in order to clarify “the model of Temasek that stood out was… place-based reinvestment, permanent pool of capital.”

The long term ambition is impressive. Singapore’s GDP is about $400 billion, and just over 50 years from that initial 140 million, Temasek currently manages total assets close to that same amount. 

Ohio’s current GDP? 

Kvamme provided the answer - and the ambition it fuels - in the podcast recording. “Our GDP is about 925 (billion) growing to a trillion. Maybe in 50 years we should have a trillion dollars. There you go. The O.H.I.O. Fund all working together. Okay, let's go!”

Already, other states have been asking about the model, with Stern admitting the team has received inquiries from leaders in other Midwest states and beyond. “We’d love to see this take root elsewhere,” he said. “But it requires the right group of founders who can corral private capital, build the network, and stay long-term. That’s the hard part.”

A year in, the O.H.I.O. Fund has momentum. Nineteen investments. Hundreds of millions raised. A growing chorus of investors and entrepreneurs spreading the story for them.

But the question that animates the founders is the same one Kvamme posed to himself when they launched Drive Capital in Columbus a decade ago: What if it works?

As of now, that question is no longer a hypothetical.

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