With a new leader at the helm, Elevate Ventures has plotted a course for 2016 that includes forging more partnerships with universities and communities to help entrepreneurs commercialize intellectual property.
The not-for-profit investment group that runs the Indiana Angel Network and manages the state’s 21st Century Research and Technology Fund also hopes to nearly double its staff to carry out its ambitious agenda.
Christopher LaMothe, a former CEO of the Indiana Chamber of Commerce who became Elevate’s CEO about six months ago, counts among its accomplishments a pilot program with Purdue Foundry, an entrepreneurship and commercialization hub.
In January of last year, the Elevate Purdue Foundry Fund provided $20,000 each to 10 Indiana startups. Elevate made additional awards throughout the year part of a three-year, $2 million collaboration among Elevate, Purdue Foundry and the Indiana Economic Development Corp.
LaMothe succeeded Steve Hourigan, who announced his intention to step down in August 2014 after the inspector general of the U.S. Treasury Department found Elevate “intentionally misused” almost $500,000 in taxpayer funds when it invested in a company run by its board chairman.
LaMothe said that matter has been resolved.
In fact, after an onsite review, Treasury approved Elevate for a final dispersion of State Small Business Credit Initiative dollars — $10.5 million to invest in Indiana companies as part of a $34.3 million program allocation to the state.
As CEO, LaMothe said Elevate wants to establish “strong and engaging” partnerships with at least five Indiana communities this year that have a strong asset base and are “ready to become a major growth hub in entrepreneurial activities.” Toward that end, he had discussions with university officials around the state, including those at the University of Notre Dame.
LaMothe, who led the Indiana chamber from 1992 to 2002, also has served as a board member for the state’s Commission for Higher Education.
“We’d like to help communities build an entrepreneurial culture and to improve Indiana’s pipeline of deals,” LaMothe said. “It’s really taking lessons that we’ve learned with our partnership at Purdue.”
Universities aren’t the only repositories of intellectual property with commercialization potential, said LaMothe, who was CEO of Sherry Laboratories in Daleville before its sale in 2013.
“When I was at Sherry Labs, we had a lot of intellectual property sitting on the shelf. But we were so focused on running our business” that company officers couldn’t fully exploit it, he said. “The business community has IP sitting on the shelves throughout the entire state,” he added.
During 2015, Elevate invested $4.4 million in 18 new companies. Many are at the prerevenue and even preproduct stage. Since being founded in 2010, Elevate has invested more than $37 million in 75 Indiana companies.
But perhaps a lesser-known aspect of Elevate has been its work beyond early-stage capital, building relationships with angel and venture capitalists to provide growth-stage funding. Elevate said the 75 companies in its portfolio later attracted $252 million from other private sources.
Among them is Indianapolis-based health care relationship software maker Hc1.com. In October, the company raised $13.2 million in growth capital, including a $5 million line of credit from Greenwich-based SCM Specialty Finance Opportunities Fund.
Elevate also helped Fishers-based “Internet of Things” software maker CloudOne obtain $15 million in venture and growth-stage capital in recent years on top of $2.5 million Elevate directly invested in the company.
That’s been valuable as, oftentimes, “growth capital is hard to put your fingers on here in Indiana,” CloudOne CEO John McDonald said.
He said a river of capital flows from east to west coasts, in which “we, here, are just enough south that we don’t get splashed.”
Elevate continues to provide connections to sources of funding for CloudOne, along with advisory services that McDonald credited with helping the company create 40 jobs.
LaMothe said Elevate will continue to showcase Indiana companies, putting additional resources into road shows, conferences and marketing.
Last March, Elevate saw one of its former portfolio companies strike it big. Lafayette-based cyber-security firm Emerging Threats Pro was sold to California-based Proofpoint for $40 million in cash and stock. In turn, Elevate generated the biggest-ever cash return — $6.4 million — to the state’s 21st Century Research and Technology Fund.
Elevate and HALO Investment Group initially had provided nearly $2.2 million in funding to Emerging Threats. Its CEO, Ken Gramley, had been an entrepreneur-in-residence at Elevate.
Now it’s time for Elevate to grow: LaMothe said he hopes to add about seven people to its eight-person staff by year’s end.