June 20, 2010

Ray Leach, serial entrepreneur and CEO of JumpStart, and Divya Gugnani, former venture capitalist and CEO of the website Behind the Burner, answer viewer questions about managing debt, and buying or lease.

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• Burton Dorion 1 year 6 months and 23 days ago

  

  You should do a fact check on Ray's claims that he is a serial entreprenuer. Once you do, you will see that he has never founded any private startup of any magnitude (job creation, wealth creation for investors/employees, or revenue).
  
  He is the head of Jumpstart in Cleveland Ohio. This is a government funded "non profit" that was set up to invest and help early stage/startup companies.
  
  Jumpstart is a great example of failures in government trying to create startups. Jumpstart has burned through $60m since it's founding and has very little to show for it. Out of the $60m only $16m has actually been invested in companies. The rest has gone to pay their high salaries and overhead. ($8m out of their $11m budget goes to fund overhead and salaries).
  
  Ray just gave himself a $30k raise to bring his total comp to $428k and the top ten people bring in over $2.3m.
  
  Despite these high salaries and enormous head count and overhead, there isn't hardly anyone on the staff with any startup success.
  
  After investing $16m in close to 50 companies and burning through $60m, there are very few positive results and the ROI isn't close to being considered a success.
  
  There are groups like Jumsptart all over the country. Many have produces results 10x greater than Jumpstart and almost all of them operate on 10% of their budget. The reason you don't hear about them is they use their budgets wisely and don't have a 5 person marketing staff like Jumpstart has.
  
  No private fund in the world would accept no returns after 6 years and $60 burned though and they would never tolerate that 75% of the fund went to fund overhead vs. 25% of the funds invested in companies.
  
  If you do your research, you will realize that Jumpstart is a huge failure for the tax payers of Ohio. One of the main reason's is the leadership at this group has had almost zero success as founders of startups and early stage companies.