IBJNews

Ex-Hoosier funnels millions back home to local tech firms

Back to TopCommentsE-mailPrintBookmark and Share

Don’t doubt West Coast investor Parker Hinshaw’s dedication to his home state of Indiana.

He and his wife, Jean Balgrosky, in 2012 founded San Diego investment firm Bootstrap Incubation LLC and in 2013 the Bootstrap Venture Fund, which have funded three Indiana companies in less than a year. A fourth deal is about to close.

“I have lots of good reasons to want to come to Indiana,” said Hinshaw, a Hamilton County native. “And, well, it’s just home. You want to give back.”

Hinshaw did well for himself in Indiana. He founded Westfield-based MaxIT Healthcare Holdings Inc. before selling his stake in 2012 as part of a $473 million sale.

Some of the payout he and Balgrosky walked away with went into Bootstrap, alongside funding from other MaxIT executives.

venture-capital-factbox.gifBootstrap has since led three tech investments that, when combined with cash from other funders, totaled $14.3 million for central Indiana businesses.

Perceivant, a data analytics startup, secured $2.1 million in September 2013. CloudOne, which manages private cloud networks providing IBM software, locked in $2.8 million in venture capital in February. And Indigo BioSystems, a developer of software for laboratories, announced an $8.5 million investment in early June.

A fourth Bootstrap deal in Indiana is about to wrap up, Hinshaw said, but he would not disclose details.

Not set on Silicon

The firm, with a $5 million seed fund and $10 million venture fund, is by no means on a level with the billion-dollar investors that rain money on Silicon Valley. And Bootstrap directs plenty of its interest to its own area, with half of the deals going to California companies.

But Hinshaw plans to keep pursuing investments in Indiana.

“What I wanted to do was share the success that I’ve had with doing startup companies with other people who had that desire but may need a little help,” Hinshaw, 64, said in a phone interview from his home in the San Diego suburb of Del Mar.

Bootstrap pursues companies that can collaborate with others in a portfolio based on life sciences, preventive health care, big data, and software as a service.

Perceivant, for instance, has integrated its analytics software with several other Bootstrap firms’ products. And Indigo BioSystems, less than a month after closing its investment, is discussing how its lab software could sync with Bootstrap’s life sciences businesses, founder and CEO Randy Julian said.

Having a Hoosier on the West Coast, meanwhile, gives the companies an inroad to an investment landscape that Indiana companies often find difficult to traverse, in part because investors typically prowl for deals much larger than what most Indiana tech companies need.

For instance, venture capital deals in the first quarter of 2014 in California averaged $13.5 million, versus $2.8 million in Indiana, according to PricewaterhouseCoopers.

“There are a lot of California-based investment groups that know a lot about software,” Julian said. “But very few of them have the kind of roots in Indiana that Bootstrap does.”

Medical history

Hinshaw’s and Balgrosky’s experiences in health care technology date back decades.

Before he was a business owner, Hinshaw developed and implemented systems for Community Hospitals. He also started a health IT consulting firm, Resources in Health Care Innovations, which later merged with publicly traded consultant DAOU Systems Inc.

Balgrosky had top technology officer roles for then-Holy Cross Health System in South Bend and San Diego-based Scripps Health before she became a health IT lecturer at University of California Los Angeles.

Hinshaw started MaxIT in 2001 as a broad array of technology services for health care providers.

The couple had lived in Balgrosky’s home state of California since 1996. But Hinshaw knew he wanted to launch the company with a headquarters in Indiana, where he already had business contacts and family to help him run the company.

MaxIT grew to $179.4 million in annual revenue and about 1,300 people throughout the United States and Canada, with 75 of them in Westfield, by 2011, the year before it sold to Virginia-based Science Applications International Corp.

“As we approached what we thought would be the appropriate exit point for MaxIT, we started planning for what we would do next,” Hinshaw said.

He and Balgrosky weren’t going to turn away from their experience in technology and running businesses.

“We concluded we needed to keep doing that in order to be happy.”

Indiana’s benefits

The couple was already considering an incubator and investment firm when they sold MaxIT.

venture-capital-companies.gifThey stepped up plans after the buyout, and Bootstrap was ready for business two months later.

The firm started targeting investment deals in its immediate area of San Diego, but by 2013 it started eyeing Indiana.

“I’m very proud of my Indiana roots,” Hinshaw said. “I think there’s a value system, a work ethic, a wholesome, basically, way of thinking that, when applied to business, creates a very positive energy.”

Much lower operating and labor costs played a large role as well, he acknowledged.

And a lack of venture capital in the state makes it much easier for an out-of-state investor to secure a deal, he said.

Perceivant, which began in 2012, was Bootstrap’s first Indiana investment.

The downtown-based data analytics company was operating with two people when it began discussions with the investment firm in mid-2013. It has seven people today, with much more ambitious plans to top 50 by 2018.

“We’d probably be at far less of a headcount” without the investment, said company founder and CEO Brian Rowe. The deal also helped Perceivant obtain tax credits from the state to support the hiring spree.

Perceivant is also able to tap support services, such as sales and marketing, which Bootstrap provides through its incubator, Rowe said. Also, the company gained access to Bootstrap’s connections in California, which is a much larger market for Perceivant.

“We didn’t just want to get cash,” he said about the investors he spoke with. “For our situation and what we’re doing, it’s great to have Parker available. He’s lived it. He’s done it. And he’s seen it be successful.”

Accidental fund

Bootstrap last year decided it was time for another round of fundraising, so Hinshaw turned to his colleagues from MaxIT and other friends in the Indianapolis area.

“I’m pretty naïve from the standpoint of investing in venture funds. I just knew I trusted Parker,” said Bootstrap investor Mark Fangman, who worked for Hinshaw since the 1980s, most recently as executive vice president of sales for MaxIT.

Hinshaw solicited investments with plans to replenish the company’s coffers for seed funding.

“I got a $6 million response, basically,” he said.

He decided to keep going, and eventually pulled in $10 million. It was enough to start a venture fund for slightly more established companies, ones pulling in $500,000 or more in annual revenue.

CloudOne and Indigo BioSystems both received investments from the more recent fund.

On their own

The 2,000 miles between Bootstrap and its growing number of Indiana investments means the firm lets its portfolio companies operate without much day-to-day control.

“They kind of let us run our own show, but that’s not to say that they’re disinterested,” said John McDonald, CEO of CloudOne.

Hinshaw plans to keep out of daily business, saying he chose the investments he did largely because he trusts the executives to run their own companies.

He has no intention of moving the businesses closer to him as many investors do. Too many employees leave the companies, costing more money and leaving little benefit, he believes.

“The idea of uprooting and moving offices would be way out of whack for me,” he said. “I just don’t get that.”

And much like how he plans to keep the companies in place, he sees no reason to move from California.

“It’s basically between 72 and 82 [degrees] every day. I’m 75 yards away from the Pacific Ocean. I have family here,” he said. “Why would you leave that?”•

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
 
Subscribe to IBJ
  1. Uh, sorry Johnnie, but you are incorrect. Despite the assertions by yourself and various defenders and captains, sports attendance is NOT off significantly at most sporting events in the US. Variances in attendance has been in the range of single digits, both + & - for years now. MLB has had most of its best overall attendance nubers in the last decade, and that trend has been consistent for most major sporting events. The number one issue cited by most fans when asked about attendance is the overall cost of attending. The presence of HD and big screen televisions in home doesn't even register, as a factor for not attending an event. VALUE in the product is the key, and apparently is something lacking in the current ICS. What other explanation is there when with what is routinely touted as the "best" racing on the planet, fans are staying away in DROVES. A "close" title battle into the last event at Fontana, with the "cars and stars" of the ICS, and who showed up? MAYBE 8K. Sorry, but HD TV isn't to blame for that kind of fan apathy.

  2. Do you need finance to establish your business ? Are you interested in getting a loan at 3% from our private company? If so please Email: suntrust_oil@blumail.org

  3. If she was worth the $ the public outcry over direct tv dropping them would have kept them on their dishes as we have seen with other companies. I too quit watching channel 13 after she showed up since I left channel 8 because of her all show rather than production results. When Randy on 8 corrected her she had a big head and incorrectly challenged his correction for pronunciation of a city. Other antics while she matures was too much for me with her very inaccurate forecasts. All the forecasters were predicting rain until Thursday except Chris. They predicted sunny on Thursday but instead of rain until Thursday upon which the sun would finally make it out in full glory Chris was right on the money just as I too predicted looking at the radar on weather.gov. One thing I love about Angela is the fear you can see in her every time it thunders in the winter. It far exceeds the entertainment value of her body language (high heel noise drags, depression, etc) when her forecasts are so incorrect. Her hair stands on end, you have to see it!!!

  4. Good Day, Apply For A Loan I am Mr Fernadez Antonio, a private Loan lender and a cooperate financial for real estate and any kinds of business financing. I also offer Loans to individuals, Firms and cooperate bodies at 3% interest rate We offer any kind of loans. email us via fernadezloaninvest@outlook.com LOAN APPLICATION FORM First name:......................... Middle name:......................... Last name:........................................ Date of birth (yyyy-mm-dd):....................... Gender:........................................... Marital status:................................... Total Amount Needed............................... Loan Duration.................................... Address:.......................................... City:............................................. State/province:................................... Zip/postal code:.................................. Country:.......................................... Phone:............................................ Fax:.............................................. Mobile/cellular:.................................. Monthly Income.................................... Occupation:....................................... Best Regard, Mr Fernadez Antonio.

  5. i will love to share my testimony to you all the people in world i got married to my husband about 2 year ago we start having problems at home like we stop sleeping on the same bed,fighting about little things he always comes home late at night,drinking too much and sleeping with other women out side i have never love any man in my life except him. he is the father of my child and i don't want to loose him because we have worked so hard together to become what we are and have today .few month ago he now decided to live me and the kid,being a single mother can be hard sometimes and so i have nobody to turn to and i was heart broken.i called my mom and explain every thing to her,my mother told me about DR.okoro how he helped her solve the problem between her and my dad i was surprise about it because they have been without each other for three and a half years and it was like a miracle how they came back to each other. i was directed to DR. okoro on his email:okorospell@gmail.com and explain everything to him,so he promise me not to worry that he will cast a spell and make things come back to how we where so much in love again and that it was another female spirit that was controlling my husband he told me that my problem will be solved within two days if i believe i said OK So he cast a spell for me and after two days my love came back asking me to forgive him i Am so happy now. so that why i decided to share my experience with every body that have such problem contact Dr okoro the great spell caster on his email addresses spellcasterforlove@outlook.com

ADVERTISEMENT