By NIKI KELLY
Indiana’s economic development officials on Dec. 19, 2023, announced key updates to the state’s focus on innovation and entrepreneurship, outlining funding increases and programmatic changes they said will cultivate startup activity and fuel Indiana’s $1 billion venture market.
“Indiana’s entrepreneurial ecosystem is experiencing unprecedented momentum, earning recognition as the best state in the U.S. to start a business – and we’re not slowing down yet,” Secretary of Commerce David Rosenberg said. “Alongside our ecosystem partners like Elevate Ventures and the Applied Research Institute, we’re continuing to expand and modernize our suite of funding and support resources for Hoosier innovators, entrepreneurs and small businesses, helping turn dreams into reality.”
The updates will increase funding and support for Indiana’s entrepreneurs, innovators and startups – particularly for the state’s earliest-stage firms – and make investment capital more accessible, a news release said.
The Indiana Economic Development Corporation (IEDC) estimates that these efforts and modernizations will double the number of state-supported venture development investments each year, further accelerating Indiana’s growing venture development activity. Rosenberg leads the quasi-public IEDC.
Venture development funding boost
The IEDC renewed its agreement with its venture development partner, Elevate Ventures, and increased annual funding to the organization by 40%.
Indiana surpassed the $1 billion mark for venture activity in 2021 and 2022, ranking No. 4 in the U.S. and No. 15 in the world for venture growth between 2017-2023, according to Pitchbook.
The IEDC said Elevate Ventures would narrow its focus to making, maintaining and managing investments, realigning certain grant programs (including the state’s Innovation Voucher Program and specific matching grants) to the Applied Research Institute (ARI) and enabling the organization to more strategically catalyze venture investment opportunities for start-ups and scale-ups.
New $3 million pre-seed fund
Elevate Ventures is launching a $3 million pre-seed fund that the IEDC said is designed to fuel Indiana’s earliest-stage companies.
The fund, which will replace current activities through the Community Ideation Fund and Nexus Pitch Competitions, would double the annual investment allocation for early-stage companies and cut back on some timing constraints from the previous programs. The IEDC said the change would allow companies to access critical funding when it is needed most.
Investments from the fund will be made in amounts of $20,000 to $100,000 and, unlike the rest of Indiana’s venture funds, won’t require matching investment dollars.
New matching grants available for innovation and technology transfer activity
The state will expand its support for innovative entrepreneurs and small businesses through its Small Business Innovation Research/Small Business Technology Transfer (SBIR/STTR) matching grant program, making phase-two matching grants — in addition to phase-one matching grants already offered — available to ideation-stage Indiana companies.
The matching grants, which will now be managed by ARI, are available to recipients of research and technology development grants through 11 federal agencies. ARI will also take over management of the Small Business Innovation Voucher Program — a program designed to help leverage Indiana’s research and higher education institutions — as well as approved nonprofit research organizations to provide small businesses access to industry experts and research leaders.
Indiana modernizes regional model for fostering entrepreneurial and startup activity, commits another $2 million to growing localized support for small businesses
The IEDC also said Elevate Ventures would modernize its support for regional ecosystems by eliminating the requirement that local communities complete a fundraiser in order to access investment opportunities, and by expanding its footprint to cover the entire state.
The change, according to the agency, will make investment capital — particularly pre-seed funding — and local points of contact more readily and more quickly available throughout the state.
