BioCrossroads Inc. has raised an $8.25 million seed fund in its second attempt to help fledgling life sciences companies grow to the point where they can attract venture capital or a corporate funder.

The Indianapolis-based life sciences development group announced the fund Monday—seven years after it raised its first, $6 million seed fund. That fund plowed its money into 11 different companies, helping a few receive venture capital and at least one get regulatory approval for a product.

But the need for early-stage funding has only grown the past seven years, as more investment has shifted to information technology companies, and those still in the life sciences space want to wait later and later before putting their capital at risk.

“It’s important because there just isn’t much of this kind of money out there,” David Johnson, BioCrossroads’ CEO, said in an interview. He added, “If we don’t have an investment fund, we’re missing some of the most important tools to build that opportunity.”

The Indiana Seed Fund II LLC was kicked off in late 2010 when Eli Lilly and Co. agreed to invest. The Indianapolis-based drug giant has funded BioCrossroads since the group’s founding in 2002.

Also chipping in are Indianapolis-based health insurer WellPoint Inc., Indiana University’s Research Technology Corp., Purdue University, the University of Notre Dame, the Richard M. Fairbanks Foundation and BioCrossroads’ own for-profit arm.

All those organizations are on the board of BioCrossroads. Johnson declined to reveal the amounts of any of their investments.

Because the companies the Indiana Seed Fund invests in are waiting longer to attract venture capital, BioCrossroads is increasing the amount of money it can invest in a single company: up to $1 million in Indiana Seed Fund II, compared with a cap of $500,000 for Indiana Seed Fund I.

“In this market, it’s proven that we need to stick around a little longer,” Johnson said. He noted that the idea behind the first seed fund was to be a company’s first institutional investor, but that within a year or two, a bigger investor would come in.

Many of the companies financed by the first seed fund have yet to receive any venture capital, instead remaining viable by attracting a corporate funder or buyer.

The companies in which the Indiana Seed Fund I invested include SonarMed Inc., ImmuneWorks Inc., FlowCo., Fast Diagnostics, Zorion Medical Inc., AgeneBio, Bioscience Vaccines Inc.

Some, like SonarMed, have won FDA approval for products. Others, like CS-Keys Inc., have fizzled.

The first Indiana Seed Fund was funded by only two investors—the state of Indiana and BioCrossroads itself. But by having a track record, Johnson said, it became easier to raise a second fund.

“It is always a little easier to raise money for something called Seed Fund 2 instead of Seed Fund 1,” Johnson said, adding, “I think there is at least more confidence that we could pull it off this time around.”