IBJNews

Indiana companies attracting more VC this year, report says

Back to TopCommentsE-mailPrintBookmark and Share

The volume of venture capital flowing into Indiana-based companies has picked up this year, a report says, with the state attracting seven times more investment in the first quarter of 2011 compared with the same period of 2010.

The $68.6 million invested in Indiana companies through the first quarter comes close to approaching the $79.3 million total that venture capital firms invested in the state in all of 2010, according to the most recent PricewaterhouseCoopers/ National Venture Capital Association report.

There also have been some significant investments since that period ended, including the $30 million landed last month by Indianapolis-based e-mail marketing firm ExactTarget Inc.

Some local investors say the rising total indicates a shift in Indiana’s investment landscape. Others say single big-dollar deals, such as the $53 million infusion into Indianapolis-based consumer ratings service Angie’s List Inc., skew the picture.

But they agree the growth in investment — in many cases from coastal firms — has a snowball effect in terms of luring more outside dollars to the state.

“At some point, these VCs start comparing notes, and folks say, ‘What’s going on in Indiana?’” said Kristian Andersen, an entrepreneur and partner in Indianapolis-based Gravity Ventures Inc.

State firms were faring well in attracting venture capital before the recession. Indiana companies raised roughly $232 million in 2009, ranking the state 20th in per-capita VC funding, at $24.43.

Last year, the state ranked 31st in per-capita funding, at $4.39, well below the national median of $10.59, according to data from the Ohio-based State Science & Technology Institute.

This quarter's funding upswing in Indiana was accompanied by a 13-percent national uptick in venture dollars compared with the same period in 2010. At the same time, the number of deals nationally decreased about 6 percent, according to the PricewaterhouseCoopers/NCVA data.

Deals in Indiana increased to eight in the first quarter from three in the same period last year.

That’s still a relatively small number of deals. Venture-capital hotbed California, for instance, had 270 deals in the first quarter.

Don Aquilano, a managing partner at Indianapolis-based venture capital firm Allos Ventures LLC, said the small deal volume makes it hard to discern a trend in the funding.

“I think we happen to have a stable of very compelling companies here that have been built up over the last 10 years or so that are commanding these significant fundraising rounds from both local and coastal investors,” Aquilano said.

While that’s a good sign, he adds that more local venture capital dollars are needed to get additional companies to a point where they can attract coastal investment.

The Angie’s List infusion from Massachusetts-based Battery Ventures and Indianapolis-based Cardinal Equity Partners was by far the largest in the first quarter.

Among the other investments were $10.5 million invested in Carmel-based Dealer Services Corp., which provides products, financing and services to automotive dealers, and $2.1 million to Carmel-based tech firm ChaCha Search Inc.

Helping companies such as Angie’s List and ExactTarget lure such large investments is the fact that they’re profitable. And they could continue to attract sizable sums, Andersen said, as long as they hold out on having an initial public offering.

Such investment overall has a positive impact on what it takes to get more venture capital to the state.

“All of this money that’s fueling the growth of these companies has direct implications on our ability to attract and retain talent,” Andersen said. “The more of that talent that moves here in response, the more that cycle perpetuates.”


 

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. So much for Eric Holder's conversation about race. If white people have got something to say, they get sued over it. Bottom line: white people have un-freer speech than others as a consequence of the misnamed "Civil rights laws."

  2. I agree, having seen three shows, that I was less than wowed. Disappointing!!

  3. Start drilling, start fracking, and start using our own energy. Other states have enriched their citizens and nearly elminated unemployment by using these resources that are on private land. If you are against the 'low prices' of discount stores, the best way to allow shoppers more choice is to empower them with better earnings. NOT through manipulated gov mandated min wage hikes, but better jobs and higher competitive pay. This would be direct result of using our own energy resources, yet Obama knows that Americans who arent dependent of gov welfare are much less likely to vote Dem, so he looks for ways to ensure America's decline and keep its citizens dependent of gov.

  4. Say It Loud, I'm Black and Ashamed: It's too bad that with certain "black" entertainment events, it seems violence and thuggery follows and the collateral damage that it leaves behinds continues to be a strain on the city in terms of people getting hurt, killed or becoming victims of crimes and/or stretching city resources. I remember shopping in the Meadows area years ago until violence and crime ended make most of the business pack you and leave as did with Lafayette Square and Washington Square. Over the past 10 to 12 years, I remember going to the Indiana Black Expo Soul Picnic in Washington Park. Violence, gang fights and homicides ended that. My great grandmother still bears the scares on her leg from when she was trampled by a group of thugs running from gun fire from a rival gang. With hundreds of police offices downtown still multiple shootings, people getting shot downtown during Black Expo. A number of people getting shots or murdered at black clubs around the city like Club Six on the west side, The Industry downtown, Jamal Tinsley's shot out in front of the Conrad, multiple fights and shootings at the skating rinks, shootings at Circle Center Mall and shooting and robberies and car jackings at Lafayette Mall. Shootings and gang violence and the State Fair. I can go on and on and on. Now Broad Ripple. (Shaking head side to side) Say It Loud, I'm Black and I'm Ashamed.

  5. Ballard Administration. Too funny. This is the least fiscally responsive administration I have ever seen. One thing this article failed to mention, is that the Hoosier State line delivers rail cars to the Amtrak Beech Grove maintenance facility for refurbishment. That's an economic development issue. And the jobs there are high-paying. That alone is worth the City's investment.

ADVERTISEMENT