A study commissioned by Elevate Ventures Inc., a nonprofit that oversees the state of Indiana’s 21st Century Fund and assists startups and early stage companies in their growth, found that since the organization was created in 2011 it has had a $43-million impact on northeast Indiana.
The study, which looked at direct, indirect and induced economic impacts and was conducted by Chmura Economics & Analytics in Cleveland, was released earlier in November — two weeks after an audit by the accounting firm KPMG found that the Indianapolis-based organization was substantially in compliance in regard to conflict-of-interest issues that arose after it approved investments in Indiana companies with ties to Elevate Ventures’ board of directors (see sidebar).
Elevate Ventures provides a variety of services to companies across northern Indiana. Modeled somewhat after JumpStart Inc. in Cleveland, it offers startup assistance to entrepreneurs, and mentoring and business-development services to existing companies.
It also makes capital investments in Indiana companies through the 21st Century Fund, the Indiana Angel Network Fund, the Indiana Community Development Fund and the Indiana Diversity Investment Fund. The funds are supported with money from the state and federal governments, and by fundraising conducted by Elevate Ventures.
Using an entrepreneur-in-residence, Elevate Ventures provided entrepreneurial assistance to 17 companies in the 10-county northeast Indiana region during the period of time the Chmura study examined. According to the study, those companies had an estimated 163 full-time workers with estimated annual revenue of $15.1 million. With the help of Elevate Ventures, they were able to attract $18.2 million in total investment.
The total economic impact of the entrepreneurial assistance services offered by Elevate Ventures, which can include matching a startup with angel investors, was $11.9 million, the study found. That $11.9-million impact could support 112 jobs, according to the study.
For Robert Clark, Elevate Ventures’ northeast Indiana entrepreneur-in-residence, the study affirms what the organization is trying to achieve in the region.
“For me, (my work is) just a lot of activity, and when you see stuff like this, it’s like, ‘OK, we’re really making a difference,’” said Clark, who works out of the Northeast Indiana Regional Partnership offices in downtown Fort Wayne. He also has an office at Trine University in Angola.
Through a program called “economic gardening,” Elevate Ventures offers services to existing, second-stage companies to help them grow. During the period looked at by the Chmura study, 34 companies in northeast Indiana took part in the economic-gardening program, which had a total economic impact of $31.2 million that could support 308 jobs. In 2012, those companies had 906 full-time workers and estimated annual revenue of $125.3 million.
The study also found that economic gardening provided a 17-percent increase in incremental revenue to northeast Indiana companies, for a total of $20.6 million. The incremental revenue is on top of additional revenue the companies saw as the state and national economies improved from 2011 onward.
“We’re successful, no doubt about it,” said Oliver Barie, Elevate Ventures’ regional outreach manager for northern Indiana. “What we’re doing is working, clearly.”
According to the study, Elevate Ventures’ cost to provide services in northeast Indiana was $914,107. With its $43-million total economic impact, the organization’s benefit-to-cost ratio is 47.1.
The Chmura study found that in northeast Indiana, Elevate Ventures provided services to a range of companies representing different industries, including construction, education, health and trade. Nearly half of them were in manufacturing, which is one of the region’s strengths.
“These aren’t just your on-the-line, $8-an-hour jobs,” Barie said. “Seventy-eight percent of these companies that we’re working with pay above-average annual wages for the industries they’re in. So these are good-paying Hoosier jobs that are staying in Indiana and are going to be built in Indiana — by the assistance of Elevate Ventures.”
The Chmura study doesn’t attempt to quantify the numerous contacts and relationships that Clark has established with other area entrepreneurs, existing companies, potential investors and other funding sources — although that represents a significant part of his job.
“We point them in the right direction,” Clark said of area entrepreneurs. “So if they need to go to the (Northeast Indiana Small Business Development Center) and they don’t know anything about business, I’m like, ‘Here, go talk to Jane (Rich) or Wes (Shie). They’ll help you put together some financials and then you can come back to us.’ … And then I can help take it to another level.”
He added: “It’s a lot of the resourcing — bringing all these things together for companies.”
Clark plans on using the study to help him meet a $1-million fundraising goal for northeast Indiana. About $750,000 so far has been raised in the region, and the funds will be used to provide additional investment assistance to area companies. For example, Elevate Ventures has a total of $100,000 for what it calls high-potential startup grants. With a successful fundraising campaign, that total could increase to $200,000 to $300,000, Clark said.