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High Alpha celebrated its 10-year anniversary in April, which deserves both celebration (for its accomplishment) and elevation (for its example).
Founded by Scott Dorsey, Eric Tobias, Kristian Andersen and Mike Fitzgerald—who were friends, colleagues, and business partners with experience in the venture capital and entrepreneurial world—High Alpha operates as a venture and investment firm, building and launching companies.
Existing for a decade as an organization is an accomplishment in itself. These last 10 years, especially, have presented unique challenges. Launching out of a conference room at Studio Science, High Alpha constructed its headquarters in the Bottleworks District during the pandemic and opened it in the fall of 2020.
According to a LinkedIn post from Andersen, “We’ve come a long way from that small office on the circle in downtown Indianapolis (4 funds, 100+ founders backed, 45+ studio company starts, and almost $400,000,000 in AUM). However, I’d argue that in the areas that matter most, we’ve remained remarkably consistent. We are still motivated by a desire to serve founders and the teams they lead. Most importantly, we have maintained the same belief in the power of entrepreneurship to transform industries, communities, families, and individuals.”
High Alpha’s impact extends beyond that. To many outside the state, it’s the only name they know in our state’s venture ecosystem (with perhaps the exception of Elevate Ventures). With ExactTarget’s IPO and exit providing much of the resources and relationships, High Alpha started with a prominence well-earned that’s not afforded many other players in the ecosystem.
Its example represents an essential understanding in how thriving entrepreneurial ecosystems emerge over time—individual entrepreneurs choose to reinvest time, capital and knowledge, even when it’s not financially necessary to do so.
Researchers have labeled this concept “entrepreneurial recycling,” and understanding its impact could serve as inspiration for other successful entrepreneurs to
maintain participation inthe ecosystem.
While the concept sounds simple, cultures that encourage recycling can help explain why certain geographies thrive, and others stay static. From a June 2022 article in Economic and Business Review: “When entrepreneurs channel a proportion of their human, social, organizational, and financial capital into other, often multiple, entrepreneurial activities, they recycle their entrepreneurial capital, making it available to other entrepreneurs in their entrepreneurial ecosystem. Recycling is a vital process of resource flow within ecosystems.”
Recycling as a concept can understate the impact. Beyond a repeat of previous performance, recycling can often produce impact magnitudes greater than one’s initial success. The most well-known example is the so-called PayPal Mafia, many of whom have become household names, like Elon Musk and Peter Thiel. The sale price of PayPal to eBay was $1.5 billion, where the group’s net worth alone is approaching half a trillion dollars now.
A key piece of recycling is continuity of people within place. When an individual leaves an area, he or she doesn’t merely remove the financial resources from an ecosystem, he or she removes a key node in a relational network and accumulated knowledge. The inverse is true. Staying connected creates a stacking effect over time, elevating the broader ecosystem.
What makes this concept different from many other parts of the ecosystem structure—like proximity to research institutions, talent pipelines and government—is that recycling happens at the micro, individual level. Yet, when culturally expected, these individuals can be catalysts in a flywheel of success.
Serial entrepreneur David Cummings synthesized it down to this: “Talent is the most scarce resource anywhere and needs to be recycled in the startup community to increase the odds of success.”
Cheers to High Alpha on a great first decade. I hope.•
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Schutt is the co-founder of Homesense Heating & Cooling and Refinery46 and an lecturer at Purdue University. Send comments to [email protected].
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