Weekly Impact by Lay of The Land

Hi everybody, I'm Jim Haviland.

This is the second season of Lay the Land Weekly Impact.

And this is a series of shows we're going to do.

We're going to roll them out in a big hurry.

uh Looking at the Smart 50 Award winners, the first conversation I'll be releasing is one
with Ray Leach, someone I've had great admiration for for a very long time.

uh Really kind of like an uber entrepreneur in the area.

You might know him best from his many years at uh

jumpstart, but now he's at the Ohio fund, probably the most innovative new type of fund
that there is out there.

There's a great lay of the land episode that I'll link to below.

You should go listen to the talks of all about what they're doing and how they're thinking
about it.

It's a lot of innovation there.

think that's what makes them smart, but please enjoy my conversation with Ray Leach.

All right, welcome to the Lay of the Land Weekly Impact.

This is the Smart 50 2025 edition where we're talking to the honorees of Smart 50 and
trying to figure out what makes them all smart.

So Ray, obviously you are well known to pretty much everybody in the entrepreneurial
community here in Cleveland.

You have a fabled career.

I know when the Ohio Fund started, it was, oh, good, Ray is in charge of that.

congratulations.

I know you had a great year, your first year out.

From your perspective though, tell me what, let's actually give you a moment to give
yourself the arc.

I know you, gosh, I don't know how long we've, I've known about you, it's like 25 years,
something like that.

So give me the arc of the story of like going back before in the 1990s, what the heck were
you doing then?

Oh yeah.

Yeah.

So my first business I founded in the mid eighties, when the Macintosh first came out and
desktop publishing was invented and you know, that it's impacted the pre press industry

and, of course graphic design and all that.

So it was a really a systems integration business that I owned for nine years.

know, Ray, we never talked about this, but my first business when I started, when I was in
college was teletype setting on a, on a using, uh, uh, on an Apple two.

you know, compiled basic.

Oh, yeah.

Yeah.

Yeah.

I get it.

I remember those days.

Yeah.

So really, you know, the first 15 or so years of my career was all as an entrepreneur and
operator.

And so it's involved in multiple businesses.

You know, one of the businesses, my first my founding business was number four on the
weatherhead 100, you know, back in the early 90s.

I remember going to that dinner not even knowing we were

for just like showing up for the dinner and like, oh my gosh, you're kind of busy running
a business.

I've always been an entrepreneur, even, you know, I started my first business when I was
22.

So but even before that, I was involved in entrepreneurial things.

So to me, what I'm doing now is really just the next level, particularly on the investing
side.

So so this is in some ways has some of the similar challenges and issues of any startup.

But on the other hand, certainly having 35 years of experience and have made a lot of
mistakes and made some progress has certainly uh provided a kind of a roadmap for what

could make sense for the Ohio Fund.

Well, and you know, I'm going to have you me your version, your two minute version of what
makes the Ohio Fund different.

But I want to postulate that part of what I like about the Ohio Fund is that

And I've been saying for a while that we can't do venture creation the same way they do it
on the coast.

Ohio is different.

We got to go with what we know.

got to embrace the culture that's here.

So we needed a different way of building businesses, a different way of funding
businesses.

We're not going to have 20 Googles coming out of Ohio in the next 20 years.

And that's OK.

Because we're going to do really great basic things in a great way if we

You know, like like like like Eagle, you know, right.

It's a great business.

isn't sexy.

It's not going to go 100 X, but it's going to be great.

Yeah, I think, you know, at the end of the day, there was a time where Ohio was a center
for capital.

You know, at the end of the 19th century and the first decade, the first generation of the
20th century.

I the story all the time.

I mean, was very much a center for for it was the San Francisco of its time.

Yeah.

Capital for innovative ideas.

But over the last

you know, 50 to 75 years.

While, you know, Northeast Ohio is a very robust private equity ecosystem for sure.

And I've, you know, focused on maybe toiled in the venture capital side for 20 plus years.

think with the Ohio fund, what I'm what I'm excited about and what I'm seeing happen is
there's a tremendous amount of wealth and capital in the state of Ohio, whether that's

with high net individuals or family offices or corporations or foundations or
institutions.

And that group as a collective, as a group of investors really has not had a logical
integrated network to be able to invest in things all across the state with the number one

objective being return.

And the Ohio fund is not an early stage seed investment fund.

It is focused on investing.

It's not an angel fund.

It is investing a third of its capital in real estate, a third in growth equity and a
third in tech.

Tech companies in Ohio, but those tech companies are well down the path.

are, these projects are typically raising anywhere from 10 to a hundred million dollars.

um So we talk about product market fit.

These are all scale.

Correct.

Correct.

These are, these are dollars that are enabling scale.

So they have a much lower risk.

uh dynamic.

The other thing too that I think we're really interested and excited about and we're
seeing progress in that is while we have a tremendous amount of wealth in Ohio, most of

our fund managers do not have large, uh significant established relationships with that
capital.

So with the Ohio fund, we're going to create a mechanism where we can demonstrate we can
be 100 % focused on Ohio, which by the way is almost a trillion dollar economy when you

look at the whole thing.

It's like a small economy.

We can aggregate capital, uh invest in deals that our investors are bringing us, but also
obviously invest in deals that we're aware of across the state, generate great returns,

and basically make it cool to invest in Ohio again.

Investing companies in Ohio and our investors who are all across the state are super
excited and motivated to invest in the entire state.

of course we have investors from all across Ohio.

their money isn't going only to the region they live in, it's going all across the state.

they've got a portfolio approach like everybody should.

But I think that's for me, when I was excited when you announced the Ohio fund, I was
excited to see Jeffrey end up there because it's a good place for him.

Absolutely.

But because I think that the two things that the unlocks from my perspective are a very
mature and Ohio, culturally Ohio approach, right?

with land resources and your mature companies.

And then the right people.

mean, was really, there's nobody out there selling some big dream.

You're all apparatus.

The dream is to make reasonable returns at a reasonable time.

That's something that even the most conservative second, third generation money can say,
okay.

Right, right.

Yeah, I do think, you know,

timing is everything.

And certainly post COVID and everything that's going on in the world, let alone in the
country, we felt like now is the perfect time as there is so much disruption in terms of

the global economy, Ohio, the best location in the nation, the neutral to less onerous
challenges brought to us from climate change.

There's huge parts of the world that are really challenged by that.

We're less so.

Obviously we have this huge workforce here.

So, you know,

It's interesting as somebody who was kind of born and raised in Akron, grew up, spent most
of my career in Northeast Ohio.

There's some things inside the community, inside the state that really haven't changed all
that much.

It just so happens that now it's in favor.

But then when you add on the increasingly positive business climate in Ohio, lowering of
taxes, you know, I think we've had a real pro-growth approach for the last decade.

Just the timing.

of all this we think is really fortuitous and certainly from the investments we've been
able to make in the first 16 months, we're really, really bullish.

Well, you know, it's not just low taxes.

It's infrastructure positive.

that's, you know, I spent a good 10 years in Washington state, which is, very different
political environment.

But they had this this notion of like no taxes for early stage business.

Yes, go start one.

You know, if you lose your job, don't go get another one.

Get a good job.

Right.

And this whole notion that like our whole point is to build entrepreneurship as a
structural reality.

um Well, so so tell me a little bit about obviously a super long career and really
building things, Ray.

So I can imagine you've got some great nuggets when it comes to leadership as you as a
leader.

You know, what do you go to are the core things that you think?

Well, you know, the first thing out of the box is, you know, and it's maybe tried or
repeated often, but it's the people, you know, that at the end of the day, particularly if

you're trying to take on something that hasn't been done before or something that's going
to be really hard, try to surround yourself with people that are smarter, have the same,

if not more energy and can share in the vision.

So the first the first piece of it, I think, is people.

One of the other areas that

I think I've spent more time on in the last certainly handful of years is, you know, I've
been involved in a lot of things that are really hard.

Uh, and sometimes you get kind of addicted to the really, really hard thing.

So I think as I've gotten older, I've been able to like, uh

Circle back to say well, is there something I could do a little bit differently right that
could make this a little less hard I can have one hard thing at a time.

me write everything else in the right So, you know, so I think and I think that is
reflective by the the mission and the purpose of the Ohio Fund Yeah, I could spend the

next 10 to 20 years really focused on super early stage high-risk things But at the end of
the day in order for that ecosystem in any place including Ohio to change we need a lot

more private capital

in that segment of the economy.

And I, unfortunately, was not able to do all that much to dramatically increase the amount
of private capital in Northeast Ohio or Ohio really interested in early stage things.

So a big part of what the Ohio fund is about is how can we build trusting relationships
with investors so that they, because, the Ohio fund is starting with the current thesis

that we have now.

That doesn't mean it won't evolve.

We're also investing in other funds.

So this, the end of the day, this is how much capital can you aggregate?

And certainly one would think conceptually, it's going to be easier to convince Ohioans to
invest in projects in Ohio than it might be others.

So, so I think a lot of it is just really like the, know, keep asking the question why,
you know, if something's hard, you know, you have a first answer why, well, why is that

high?

Why is it that hard?

And, and, you know, keep asking those questions.

And to me, some of the stuff is really simple and we overcomplicate it.

Yeah, I agree completely.

I've been quoted recently on LinkedIn a couple of times, telling my story when I lived in
Seattle about how part of the entrepreneurial journey there, because in the 90s, it was a

special time.

It was a very odd time because no one knew where the next thing was coming from.

So you can get a meeting with anybody, literally anybody, because you couldn't get a
second meeting, but you get a first meeting with almost anybody.

um But also, everyone knew that if I built something, there's some

I can go sell it somewhere.

Everyone at Microsoft knows they can split out, go do something and come back.

And the same thing has gone for uh Amazon.

mean, everyone in the ecosystem there knows that, I'm going go try to build something.

That's a much better way to build new things.

Absolutely.

And I don't know that we haven't still conquered the notion that falling short of our
goals isn't failing.

Yeah, I would agree.

We haven't got all the way there, but we have made progress.

Yeah, yeah, yeah.

Certainly in the last 20 years, I've seen a lot of progress.

You know, lot of things have changed here.

A lot of things have changed around us.

But we're headed in the right direction.

Another kind of premise of the Ohio fund is that the next 25 to 50 years are going to be
the most prosperous years in the state of the in the history of the state of Ohio.

And we believe that premise just because not only of what's happened here culturally in
the state.

but also what's happened around us, not just in the Midwest, not just in the United
States, but across the country.

We have huge advantages here, which maybe haven't been fully appreciated or realized, but
I think we're coming back into favor and we're really, really excited to see how

investors, our partners are concurring with us, that they do believe.

There's a belief in opportunities in Ohio today that I haven't seen in my last 20 years.

We've got evidences there.

It really plays into the Jim Collins notion of return on luck.

Right.

Yeah.

Right place, right time is pretty good.

Sure.

Sure.

You can be smart all day long.

Yeah.

Yeah.

Luck is, you know, that's the best thing to have for sure.

If you can get a lot of luck, then, you know, it can it can move yourself along that much
further, that much faster.

So Ray, I've been asking everybody that's come in, uh by the way, the people thing,
everyone, everyone seems to agree with that.

It's like it may be.

I I love the fact that everyone talks about people in ways that, uh, you're finding the
right talent, know, talent density, Netflix concept.

love that.

Um, but it's been a universal across the people that have been part of, of, this series.

uh, but tell me about, I mean, part of it is like internal mentorship.

Who have been your mentors?

Who are the people you go to and say, yeah, that, person really changed my perspective and
gave me the lift.

I wouldn't have gotten any other way.

Yeah.

Well, if I, if I had to call a single person out, um, over the last 20 years, it would
have been David Morgan Thaler.

yeah.

Sure.

So David, um, you know, who's been gone now almost 10 years, but was a pioneer in the
venture capital industry.

And was, and was impactful up until the end.

Yeah, absolutely.

I was with him weeks before he left us and he was teaching me, training me, challenging
me.

in the in the last few weeks of his life.

And he was in his mid to late 90s at the time.

So David, think not only was he incredibly insightful and experienced and knowledgeable
and was a great investor, but also an operator.

But he also cared so much for Cleveland, for Ohio, for Northeast Ohio, for our community.

So I've had many mentors over the years.

could name drop another half dozen or more.

But David probably has made the biggest impact.

in terms of how I've spent the last couple decades.

Yeah, mean, his impact will be felt for a long time.

uh for sure.

uh Yeah, I remember being broken up when he when he when he he passed because I had I'd
only barely met him.

I hadn't really spent time with him, but I could see what he was doing and greatly
appreciated it.

um Well, good.

So any other um earned wisdom?

What would you what would you say to the Roy Leach, you know, 20, 30 years ago that you
that would

get you here faster.

Or we just would keep you from making some of the, uh what our friend Jeffrey likes to
call it earned wisdom.

Yeah.

Well, you know, the younger version of myself was probably wanting to maybe thought I had
a better idea or that I had the unique insight or that it was something that was unique or

special about my point of view and perspective that was the secret sauce.

that's in my experience now that's

Rarely the case so so I would say what I would say to my younger self would be focus more
on people and relationships and and also a big one um is don't don't hesitate to reach out

to people that um You feel are you might feel like an imposter in front of?

um

so I've had many occasions over the course of my career where I had an opportunity to
reach out to, know, an iconic business leader and I chose to do it, but I've had probably

more where I didn't choose to do it.

And I very much regret that I didn't reach out to folks because you know, people are
people, know, even if, they're five, 10, 20 years older or, you know,

5 million, 10 billion or a billion dollars richer than you, it doesn't mean that they're
not interested in maybe what you're working on.

So a big part of my advice is to still to myself today, but to others is, know, don't
hesitate to reach out to folks that you think can deliver a unique and valuable

perspective, either toward the problem you're trying to solve or to your career.

Right.

I the great leaders all have a level of humility that makes it, you

I appreciate the question.

absolutely.

Oh, I learned something.

I hadn't framed it that way.

absolutely.

Great.

Well, Ray, thank you so much for spending the time.

I know you're a busy guy, and thanks for the work you're doing.

I appreciate it.

Thanks, Jim.

It's an honor to be part of this group.

Thank you.