With the 21 Fund—the state’s principal initiative to invest in high-tech companies—facing another year of lean funding from the Indiana General Assembly, state economic development leaders Thursday unveiled a not-for-profit entity that could attract additional funding sources.

Elevate Ventures could draw an additional $30 million in matching federal and private funding to support entrepreneurs statewide, Indiana Economic Development Corp. officials say.

The new entrepreneurship initiative, which broadly will go by the name Invest Indiana, also would match promising firms with experienced entrepreneurs and investors to provide needed advice to grow their firms.

Indiana “lacks a statewide investor network to match new ventures with industry investors to increase the probability of success,” says informational materials from the IEDC, which was scheduled to announce the new initiative Thursday in Winona Lake in northern Indiana.

Officials said investors who interact with their portfolio companies at least twice a month by mentoring, coaching and providing leads greatly enhance the probability of success.

One idea is creating a “robust” entrepreneurs-in-residence program.

The 21st Century Research and Technology Fund, by contrast, is more about writing checks to promising companies.

The Daniels administration is seeking $31 million for the 21 Fund in this legislative session, compared with $35 million it landed for the current two-year period and $70 million in 2007-2009. 

Last month, Indiana Secretary of Commerce Mitchell Roob Jr. cited continuing state budget pressures for the modest 21 Fund request. He told IBJ the administration was focused on a balanced budget and not raising taxes.

In recent years, IEDC officials who manage the 21 Fund have been trying to stretch dwindling grant amounts by trying to get angel investors and venture capitalists to invest in firms alongside the 21 Fund.

The not-for-profit structure of the state’s new Elevate Ventures makes it eligible to capture federal and private dollars in ways the 21 Fund—which will continue—cannot.

IEDC officials pointed to the success of a not-for-profit from northeast Ohio, known as Jumpstart Inc. It partnered with the U.S. Economic Development Administration and two private foundations to attract $1.3 million. That money is being used to develop regional entrepreneurial action plans in northern Indiana.

The plan is for Elevate to strike similar kinds of partnerships to help companies statewide.

“We need to make sure that the current innovators of the next Biomet, ExactTarget or Cook have the early state support and capital they need to accelerate their growth here versus in Massachusetts, California or even China,” Kip Tom, an IEDC board member, said in a written statement.

The initiative helps address two fundamental needs for emerging businesses, said Jim Jay, CEO of the technology initiative TechPoint.

One is that it provides a way for investors to network together to invest in promising firms. The other big element is that it gives companies access to mentors at critical stages of a company’s development.

“I think that’s one of the key elements to this,” Jay said. “It’s great that the IEDC is willing to be innovative.”