BizVoice September/October 2017

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September/October 2017 – BizVoice/Indiana Chamber 29
Close to home
Venture capital investing is often a
hands-on endeavor, which is why many firms
want to be in drivable proximity.
“We won’t just hand over a check and
be passive,” Cramer affirms. “We take a
board seat or (serve as a) board observer on
every deal we do because we want to help.
We want to be able to open up our Rolodex
if they’re looking for a VP of sales or CTO
(chief technology officer) and we can help
them find quality talent. From a business
development standpoint, if they’re trying to
sell into a large company in Grand Rapids or
Detroit, or we have (connections in many
companies throughout the country), we view
our investments as a partnership.”
Barry concurs.
“We want to be able to get a call from a
CEO at 2 p.m. who wants us to be at
interviews on a moment’s notice,” he says.
Investing in the Midwest also begets a
consideration of scale.
“We also like the Series A stage because
it’s not like a $20 to $40 million Series A on
the coast,” Cramer reveals. “It’s a $3 to $5
million Series A round here in the Midwest.
It allows us to make sure we can get our
ownership targets that we try to get internally,
but also to get other great co-investors here
in the Midwest.”
He adds that working relationships with
other quality firms build a rising tide in the
region.
“In the Midwest, it’s a more
collaborative nature,” Cramer offers. “It’s not
a sharp elbows approach where people are
trying to box each other out. We all see the
10- to 30-year vision.”
To the ‘Next Level’
The Next Level Indiana Fund, which was
approved by the Legislature in 2017 and
modernizes the Next Generation Trust Fund,
will allow the state to invest in higher-risk
opportunities via venture capital firms. The
fund’s potential pool is $250 million, and
out-of-state firms with a record of supporting
Hoosier businesses are eligible.
“It’s smart they invest alongside funds …
the No. 1 criteria for successful investing is a
disciplined, due diligence process,” True notes.
Barry shares True’s enthusiasm for the
program, recalling a similar effort in Michigan.
“We saw what (Venture Michigan Funds
I and II) did for the technology and VC ecosystem
in Michigan,” he relays. “It was incredible. When
they started those funds, there was a very
small tech and VC scene in Michigan with a
lot of gaps in types of financing. ... I used to
say good deals didn’t always get funded in
Michigan. But now, if a good deal is looking
for funding, it will get funded. I attribute
almost all of this to the success of those funds.”
Barry adds that these programs haven’t
succeeded in all states in which they’ve been
tried, but reiterates his excitement to see it
happen in Indiana.
Bumps in the crossroad?
When asked about challenges in
investing in Indiana, those interviewed had
few reservations.
“I’d say the top challenge in Indy is, as a
general rule, getting larger funds to come and
help scale-up companies,” True offers. “I
think the East Coast funds are more apt to
invest in Indianapolis because the West Coast
funds like to invest close to home. It takes a
unique entrepreneur or unique relationships
with board members to get the VC firms
there.”
He offers optimism, however, noting
some larger funds are putting offices in
Indiana to build a long-term pipeline.
“There is such a profound shortage of
equity rounds here of $1 (million) to $3
million, and there are only a dozen funds
actively able to write checks big enough to fill
those rounds in the Midwest,” Cramer adds.
While the tech scene in Indianapolis
remains a focal point, it’s not the only city in
the state that’s drawing attention. Cramer
notes that Grand Ventures has met with
companies in Fort Wayne.
Plymouth Group is also exploring
beyond the state capital.
“Most of the companies we’re looking at
are in Indianapolis,” Barry concludes, adding,
“I don’t want to show my cards too much,
but we are actively looking at companies in
other parts of the state.”
RESOURCES: Jeff Barry, Plymouth Growth Partners, at | Maitlan Cramer, Grand Ventures, at | John True,
Cultivation Capital, at
Springbuk, one of the first companies to move into The Union 525 space in downtown Indianapolis, is among the beneficiaries of out-of-state venture
capital with an investment from Lewis & Clark Ventures in St. Louis.