A Chicago-based firm is preparing to take the reins of
a new Indiana-backed venture fund and begin investing up to $250 million
Gov. Eric Holcomb
said earlier this year that Indiana’s new Next Level Fund will “build and
support more innovation and entrepreneurship in our state.” But it’s unclear
how much of the money will go to Indiana startups, the Indianapolis Business
Journal reported .
Economic Development Corp. is expected to finalize its contract with 50
South Capital Advisors LLC this month to manage the money. The Chicago firm
will invest the vast majority of the money in other venture capital funds,
which will then invest in companies.
That approach is
considered less risky than directly investing in emerging companies, but the
option can also make it more difficult to direct the cash to Indiana-based
firms. Critics say that using an out-of-state manager could increase the
risk that much of the money will leave Indiana.
“One of the primary
purposes of this fund is to support the Indiana economy by making funds
available for growing Indiana companies,” said Oscar Moralez, managing
director of VisionTech Partners, a statewide angel investing group. “It’s a
little more difficult to do that when you’re not from here or intimately
aware of the state’s ecosystem.”
But the Chicago
firm wants to find funds “that will pursue Indiana investment activity,”
said Trey Hart, a senior analyst for alternative investments at 50 South.
“The goal is to
invest the vast majority of money in Indiana-based companies and those doing
business in Indiana,” he said.
Officials at 50
South plan to open an office in downtown Indianapolis once the deal is
finalized. They also plan to host a town hall meeting in the new few weeks
to get input from local and regional venture funds, civic organizations,
universities, entrepreneurial groups, and operators of incubators and