A friend and client of mine, Doug Karr, wrote a good post this week entitled "Where to Start a Startup?" I appreciate Doug's candid comments regarding the climate for private equity investors in Indiana. Key question - "Starting a business requires funding. Does Indiana have it?"Indiana (and its business leaders) needs to continue supporting innovation and excellence in entrepreneurship - especially if it wants to remain a market leader in technology industries. As a funding law / entrepreneurial law attorney who helps clients find global private equity investors, I monitor this climate closely. Currently there is only one State sponsored fund, 21st Century Fund, which focuses on biotechnology innovations over software and SaaS solutions, a few university funds that focus on innovations arising within their own institutions, and a handful of private equity funds that seem to focus on privately held companies with either (a) EBITA of $2M plus or (b) emerging companies that are post-revenue and tied closely to one of the funds' members. This has to change if emerging companies are going to continue to be drawn to this State.
This is not the case in other regions of the country and world. As I visited with officers of private equity funds in Orange County, CA last week I was reminded and encouraged that angel investors in other regions of the world are hungry to invest in pre-revenue technology ventures - including those located in the low-cost-of-living Midwest. The funds are out there - key is just knowing where to look.


Posted by: Chris Baggott on Sunday, March 1, 2009
My thinking is that startups need to look beyond institutional funding and get further out on the tail. There is always this dream that your great idea will be funded perfectly in one fell swoop, and that almost never happens... And if it did happen, it would probably be a really bad thing for your company long term. People should think about frequent and smaller funding events. Look to collecting small amounts from lots of people. Collect just enough to get to the next stage...then do the same thing again.