Elevate Ventures, Bloomington-based incubator The Mill and the Columbus Area Chamber of Commerce have entered into a three-year agreement to invest $2.5 million to bolster the entrepreneurial ecosystems in Bartholomew, Brown and Monroe counties.
The announcement was made at Big Woods at Hard Truth Hills restaurant in Nashville on Thursday.
Formally named Velocities, the partnership is designed to develop an entrepreneurship-minded culture and infrastructure in the south-central Indiana area, including investing in local high-potential and high-growth businesses, portfolio services, educational events for entrepreneurs and investors, marketing support coaching and more.
The effort will also include a dedicated entrepreneur-in-residence, who will work with fledgling companies and advise them on next steps in bringing their idea and company to fruition, said Cindy Frey, president of the Columbus chamber. The goal is to start an entrepreneur ecosystem, along with finding investors who might be interested in providing venture capital for the companies.
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The regional partners plan to raise $1 million over three years for the project, and Elevate Ventures will match that with $1.5 million over the same period.
Columbus Mayor Jim Lienhoop said the idea of encouraging an entrepreneurial culture in a partnership with Bloomington goes back to the question of where the leading companies in this area will come from in the future and what Columbus is doing to help identify them.
For the past four decades, Columbus has relied on a robust economy relying on established businesses — companies such as Cummins, Dorel (formerly Costco), Faurecia (formerly Arvin), among others — all who started out at one time as small businesses that became economic pillars for the city.
Lienhoop said the venture will help Columbus and Bloomington identify and foster businesses from local entrepreneurs who are looking for venture capital, support, advice and a place to grow in south central Indiana.
Over the past three years, Elevate Ventures — a not-for-profit investment group that runs the Indiana Angel Network Fund — has started to focus on forging partnerships to bolster entrepreneurship and startups in different regions throughout the state.
Elevate Ventures has four similar deals around the state:
St. Joseph and Elkhart counties region, which includes participation from the University of Notre Dame
Fort Wayne area
Evansville-Jasper area
Jefferson-New Albany area.
“We’re trying to form partnerships to accelerate innovation and entrepreneurship throughout the state,” Elevate Ventures CEO Christopher LaMothe told the Indianapolis Business Journal. “We think this is critical for the future of the state.”
So why the Columbus-Bloomington areas?
“Both (Monroe and Bartholomew counties) have shown a willingness and a focus on entrepreneurship,” LaMothe said. “We think there is a real opportunity to elevate both of those regions. We want to take advantage of two partners that see this as a critical pivot.”
The money raised will be used to make investments in entrepreneurs, inventors and startups as well as “raise the visibility of entrepreneurship and innovation in the region” through things like networking events with venture capitalists, pitch competitions, seminars and other activities, LaMothe said.
In the coming months, there will be a sizable push to promote the new partnership through traditional media, social media, events and partner activities, LaMothe said.
Local businesses said the investment is just what the region needs to gain some notoriety.
“It’s a challenge for cities like Indianapolis, let alone smaller cities to get the attention they need from a business perspective,” said Mat Orrego, co-founder and CEO of Cornerstone Information Systems, a Bloomington-based technology and services provider for the travel industry. “This investment will help bring notice to the Bloomington and Columbus area. It’s exactly what is needed to start building jobs in the region.”
That’s not only important for startups, but for companies like his, which was founded in 1992, Orrego said.
“Any time a business starts in Bloomington, it starts bringing in more people to work there and legitimizes it as a place to come to work,” Orrego said. “People, and especially the top talent, will be more likely to consider your city if there are a multitude of work options there. So this is a big boost to all the companies within this region.”
Orrego said about half of his company’s 90 employees come from outside Bloomington.
“With these types of initiatives and investments, we’re hopeful we’ll be able to find even more talent in Bloomington,” he said.
Lienhoop said another aspect to Velocities is the chance to build better relationships in Bloomington, part of an effort the mayor’s office started nearly four years ago — reaching out to nearby communities to establish relationships and communication.
When Bloomington officials met with Columbus officials, Lienhoop said it was interesting to learn that even though Bloomington is only 50 minutes away, officials there didn’t really know the manufacturing base and economic underpinnings that Columbus possesses.
Columbus has a $5 billion gross domestic product and Bloomington officials were surprised by the number of engineers who live in the Columbus area, he said.
The Columbus area has already referred about a half dozen fledgling companies to the newly-named Velocities, something Bloomington officials were also surprised about, he said.
“That’s why it’s important for us to tell our story,” Lienhoop said regarding Columbus’ impact on the Indiana economy. “That’s why we travel to Japan. It really is a great story to tell, and it won’t tell itself.”
Columbus officials have also made efforts to strengthen ties to the Indiana governor’s office and state economic officials who are encouraging regions of the state to work together on economic development.
One of the potential advantages with Velocities is that it could keep bright, talented local employees in Columbus longer if there is a strong entrepreneurial spirit in the region, Lienhoop said.
And companies might be able to find venture capital and financing through the program, something that is difficult to do without collateral, something that many newl -created companies find difficult to produce.
Although the pact is for three years, LaMothe noted there are options for renewal at the end of the initial period.
“We see these as long-term relationships,” LaMothe said. “In my opinion, it will take a decade for this (emphasis on entrepreneurship and the startup ecosystem) to really become part of the culture for the region.”
LaMothe said it’s possible, if things go well, that Elevate Ventures could invest more than $1.5 million into the region.
In all the regions where Elevate Ventures have entered these agreements, LaMothe called the response enthusiastic.
“We hope to begin to pivot local communities and regions toward making innovation a fundamental factor to their success for decades to come,” LaMothe said. “The regions we’ve gone into have really embraced that idea.”
Elevate Ventures, founded in 2010, is supported by the Indiana Economic Development Corp., community foundations and corporate and individual donors.
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For more information about Velocities, visit velocitiesin.com.
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Velocities will be operated by a board of directors including:
- Rick Johnson, president and CEO of Johnson Ventures, Inc.
- Dave Glass, CEO of LHP Engineering Solutions
- Cindy Frey, president of the Columbus Area Chamber of Commerce
- Chris LaMothe, CEO of Elevate Ventures
- Jane Martin, retired venture capitalist
- Lynn Coyne, president of the Bloomington Economic Development Corp.
- Pat East, co-founder and CEO of Hanapin Marketing and executive director of Dimension Mill
Institutional and individual founders include:
Bloomington Economic Development Corp., City of Columbus, Cook Group, Cornerstone Information Systems, Duke Energy Foundation, Envisage Technologies, First Financial Bank, German American Bank, Hanapin Marketing, Heritage Fund – The Community Foundation of Bartholomew County, Indiana University, Ivy Tech Community College – Bloomington, Jane Martin, Johnson Ventures, Old National Bank, Secretly, Tecumseh Capital Partners, Tom and Barbara Schoellkopf, Upland Brewing and Pete and Janelle Yonkman.
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