Private investment — including venture capital — continues to play a major role in Indiana’s economic success and the health of Hoosiers.
Hoosier State venture capitalists support promising startups that create breakthrough technologies, products and processes that improve business productivity and efficiency and even save lives. They invest in these companies knowing that many startups will fail, but the successful ones are likely to produce a good return on investment.
But that’s only part of the story.
Increasingly, we are learning more about the far-reaching impact this type of investment is having in catalyzing job creation for Hoosiers and beyond. A 2022 study indicates that employment in venture capital-backed companies increased by 960% in the United States between 1990 and 2020 – a rate eight times that of employment in non-venture capital-backed companies. capital risk.
These numbers suggest that Indiana is on the right track as it continues to encourage and support more venture capital activity across the state and strives to cultivate a thriving culture of entrepreneurship and leadership. ‘innovation. They also underscore the value of the state’s colleges and universities as centers of creativity and critical resources — including funding, talent, business connections and mentorship — that propel new ideas forward. .
The positive impact our universities are having in Indiana’s job market is reflected in the entrepreneurship-related efforts of IU Ventures, the seed investment and angel investment arm of the University of Washington. ‘Indiana.
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IU Ventures, which manages several seed funds to support IU-affiliated entrepreneurs, made investments in 10 Indiana companies totaling $1.2 million in 2021, adding to a growing portfolio that includes now 22 active Indiana companies. Members of the IU Angel Network, which facilitates connections between new businesses and potential investors affiliated with IU, invested an additional $3.1 million in eight new portfolio companies last year, including three new Indiana-based companies .
IU Ventures’ portfolio companies include Indianapolis-based Encamp. IU alumni Luke Jacobs and Daniel Smedema founded environmental compliance software company Encamp in 2017, which will compete for “Technology Product of the Year” at TechPoint’s annual Mira Awards this month. , completed one of the largest fundraisers with $12 million in Indiana last year. IU Ventures contributed to the round with a $151,000 investment made through the IU Philanthropic Venture Fund. It came after IU Ventures invested $250,000 in the company through the same fund, which Encamp used to scale its sales and marketing, customer experience and engineering teams. .
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In 2021, amid the COVID-19 pandemic, Encamp grew revenue by over 500% and grew its workforce by 100% to over 60 full-time employees. In the coming months, its founders expect to bolster its workforce, which includes people with environmental, safety and technology expertise.
Encamp’s ability to grow and provide quality employment opportunities to Hoosiers during the global pandemic confirms another of the study’s key findings: Venture-backed companies are showing resilience in the face of downturns. of the market. According to the study, after the financial crisis of 2007-2008 and during the Great Recession, annual employment growth in US companies backed by venture capital exceeded 4%. In contrast, total private sector employment fell by 4.3% in 2009, contributing to a decline of 7.4 million private sector jobs during the Great Recession.
Last year, for the first time ever, Indiana topped $1 billion in venture capital investment, according to the Indiana Venture Report 2021. It also showed our state is second only to Illinois. in terms of venture capital transaction activity in the Great Lakes region.
This is great news for Hoosier workers and a testament to the winning strategy of our state’s policy makers, business leaders and academic leaders who are committed to building a strong culture of innovation and entrepreneurship. and prosper.
Tony Armstrong is the President and CEO of IU Ventures.