Subscriber Benefit
As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe Now
The Indiana Economic Development Corp. has voted to loosen the restrictions that have prohibited Indianapolis-based Elevate Ventures from investing in Indiana startups—its primary function—for the past five months.
The move came just hours after Gov. Mike Braun—whose administration last spring froze funding for the nonprofit organization citing vague accusations against it—made an unscheduled appearance at Elevate’s Rally innovation conference, where he called out Elevate CEO Christopher Day for good work.
Elevate, which is a nonprofit venture organization that invests in companies on behalf of the IEDC, has been in limbo since late April, when Braun’s office called for an independent forensic audit of the IEDC and its related organizations, citing unspecified transparency concerns involving its partner organizations. Commerce Secretary David Adams announced then that it had frozen funding to Elevate.
Members of the IEDC board reviewed the results of that audit during a closed-door meeting Wednesday and voted to allow it to be released to the public, pending legal review.
Elevate Ventures can resume investing
First, the IEDC’s entrepreneurship committee met Wednesday morning and unanimously approved a request to allow Elevate to resume investing activities. It’s unclear what, if any, restrictions remain on Elevate’s activities or funds.
The committee also approved the transfer of millions of federal dollars to one of the organization’s funds.
“IEDC staff respectfully requests approval to allow Elevate Ventures Inc. to resume investment operations with the capital already loaned to the funds it manages on behalf of the state,” IEDC Vice President of Venture Finance Ryan Locke said to the IEDC committee.
The money that Elevate invests comes from a mix of state and federal funding, all funneled to it via the IEDC. As part of its role, Elevate manages the numerous individual funds out of which it makes investments.
Those funds, Locke told the committee, include the Angel Network Fund LLC and a pre-seed fund that is part of the 21st Century Fund.
The four-member committee unanimously approved Locke’s request with no discussion. The full board then adopted the committee’s recommendations during its Wednesday afternoon meeting.
Day, Elevate’s CEO, did not immediately respond to multiple messages from IBJ seeking comment.
In late April, Elevate officials told IBJ that about 80% of the money it has invested in early-stage startups over the past few years has come from the State Small Business Credit Initiative, or SSBCI, a U.S. Treasury Department initiative to invest in small local businesses.
Also at Wednesday’s meeting, the IEDC committee approved Locke’s request to provide another $5 million in SSBCI funding to the Angel Network Fund. Locke said this $5 million, which will be in the form of a loan, is part of a second tranche of funding that the IEDC received in January of this year.
Locke said 80% of that second tranche must be either obligated or deployed by mid-2027 in order for the IEDC to receive the third and final tranche of SSBCI funding.
After the meeting, Locke declined to answer IBJ’s question about whether any restrictions remain on Elevate’s investing activities or funds, deferring all media inquiries to a commerce department spokesperson. A message to that spokesperson was not immediately returned.
Forensic audit of IEDC to be released
Members of the IEDC board also voted to allow the release of the forensic audit of the agency announced in the spring. At the meeting, Gov. Braun called for renewed transparency regarding the use of taxpayer dollars, and mentioned updated board policies and more stringent requirements regarding investment activity.
In a Wednesday news release, the Governor’s Office said “future iterations of contracts with partners such as Elevate Ventures and (the Applied Research Institute) will reflect these new policies and oversight controls to ensure full transparency and maximum value for taxpayer dollars.”
The Governor’s Office will also receive an appointment to the Elevate Ventures board.
Please enable JavaScript to view this content.
Please investigate the SPAC Project Energy Reimagined Acquisition Company, a $250M fund in the Cayman Islands managed by IEDC executives.
Wow. I’d like to learn more about this!
Yes, please!