Originally published in Columbus Business First.

It’s a familiar narrative for Ohio’s entrepreneurial economy: Despite a few victories worth celebrating, there’s still a long way to go for the state to become a nationally renowned hub of innovation.

Seed- and early-stage companies based in Ohio received total investment last year of $321 million, but promising startups continue to face a lack of available investment capital, VentureOhio reported Tuesday evening at its second-annual awards dinner. That means Ohio will continue losing businesses to more-fertile venture capital grounds such as Silicon Valley and Boston.

In its 2014 survey of investors and entrepreneurs, VentureOhio found 210 companies were funded at the seed and early stages last year. But companies at those two stages of development will need to raise more than $633 million by the end of 2016 to support continued growth. Only $241 million is available, VentureOhio estimated, leaving a $392 million capital gap.

Last year’s gap was $263 million.

“(Our report) concludes that the shortage of capital for early-stage companies … is our most-pressing challenge,” VentureOhio Chairman John McIlwraith, managing director of Allos Ventures, told the sold-out crowd of 280 at the Hilton Columbus Downtown.

Addressing the challenge is a key objective of Falon Donohue, in May named executive director of the trade group, which was founded in early 2014 to advance entrepreneurship in the state by ensuring an abundance of capital and publicizing successes and needs.

All things considered, Ohio’s entrepreneurial economy is moving in the right direction, VentureOhio executives said. More than $1 billion was provided back to investors as companies were bought out or went public, putting Ohio “clearly on the map from an exit standpoint,” McIlwraith said.

“The future is very bright for the ecosystem,” he said. “We very much look forward to working with all of you in the coming year to make this the best place to build and grow companies in the entire country and beyond.”

More highlights from the VentureOhio’s awards event, which included a recognition of the passing of founding president Frank Samuel:

  • Exit of the year: TOA Technologies (Beachwood)
  • Financing of the year, growth stage: Assurex Health (Mason)
  • Financing of the year, early stage: Ahalogy (Cincinnati)
  • Financing of the year, seed stage: Airway Therapeutics (Cincinnati)
  • David T. Morgenthaler Lifetime Achievement Award: James Ireland III