Chicago Firm To Oversee New Indiana Venture Funding Push

INDIANAPOLIS (AP) — A Chicago-based firm is preparing to take the reins of a new Indiana-backed venture fund and begin investing up to $250 million this spring.

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 .

The Indiana 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 co-working spaces.