Growth and Momentum in Indiana’s Startup Ecosystem

As part of our ‘Spotlight On’ series featuring Indianapolis, Chris LaMothe, Chief Executive Officer at Indiana-based VC firm Elevate Ventures.

Why it matters: Indiana’s startup scene is poised for growth.


NVCA’s ‘Spotlight On’ series highlights VC ecosystems across the country. Our second program featured Indianapolis. Chris LaMothe, Chief Executive Officer at Indiana-based VC firm Elevate Ventures, shares his perspective on the evolution of Indiana’s startup scene and why the region is poised for growth.

Q&A with Chris LaMothe of Elevate Ventures

Can you tell us about your background in the Indiana startup ecosystem? What were your first interactions like?

My first engagement with the startup ecosystem was when I was running the Indiana Chamber of Commerce. I began to encourage state policy toward building an entrepreneurial ecosystem in our state. Eventually that work generated the formation of the 21 Fund, which was an investment vehicle investing in startup and early-stage companies in Indiana. I participated at the early stages of the public policy development around entrepreneurism and innovation in our state back in the late 1990’s and early 2000’s.

After 10 years of being CEO of the Chamber I left to run a wealth management company that invested client assets in a broad range of investments including private equity. I served on the boards of those and other companies and helped in developing and encouraging their growth. That was really the first direct engagement with the ecosystem.

I then left that organization and formed my own private equity company that began investing directly in entrepreneurial startups and existing companies around the Midwest. I ran, grew, and sold several companies over the course of 15 to 20 years. Around 2015 I engaged with Elevate Ventures to continue a passion of mine; growing and encouraging entrepreneurship and innovation across our state.

How has the ecosystem changed since you started and/or sold those startups? What resources exist now that you wish you had access to back then and why?

I would say the biggest change in Indiana has been the formation of capital. In the early years of innovation and entrepreneurship in Indiana there was not a lot of capital available, which significantly hindered the ability of companies and entrepreneurs to develop any critical mass and accelerate their growth. With the hard work of the team at Elevate Ventures over the past decade, the ecosystem began to improve. I think one of the big positive movements I have seen in Indiana has been the engagement of investment funds and angel capital in our state. It is much more aggressive now than it has ever been.

What more do you think Indiana could do to help entrepreneurs and what pitfalls do you see in the current landscape?

I think one of the big challenges in Indiana is that we have a few verticals or industry groups where there is interest and startups forming. But we also have verticals and industries that are important to our state where we’re not seeing enough entrepreneurial activity. So, for example – and probably not unlike most states – we see a lot of activity around technology and/or B2B SaaS.

Areas like advanced manufacturing, advanced agriculture, and life sciences are slower getting off the ground in Indiana. They require, I think, much more focus for our state.

These verticals are where we have critical mass and are areas where we need to really push innovation that spins off entrepreneurial activity. One of Indiana’s hidden assets, which has a considerable impact on our innovation and entrepreneurship culture is the very strong support we have from the Governor and the state legislature for building this as a key pillar of the future.

Tell us a little bit about Elevate Ventures and how do you feel it fits into the Indiana ecosystem?

So, Elevate Ventures is an organization that was spun out of the Indiana Economic Development Corporation, which in most states would be their department of commerce. Initially it was an organization that was largely just making grant picks but spun out for professional management, on both the investment management and organizational management side. In the last five to eight years, the organization has really accelerated its growth, its presence, and its impact in the Indiana ecosystem.

We walk this fine line between economic development, or in other words being the advocate of encouraging innovation and entrepreneurship throughout our state, and investment management. Today, Elevate Ventures manages 13 different funds across multiple stages of startup development and is the most active VC in the Great Lakes region. Our investment thesis starts at the very earliest pre-seed level where we might have investments as small as $20,000-$25,000 and goes all the way up to growth stage, where we might have investments as high as $2,000,000.

We participate across all stages of a company’s growth and not only provide capital resources, but direct engagement through a network of entrepreneurs-in-residence. These are individuals who have had success in either starting or scaling a company or have been very active in the growth of early-stage companies. They provide coaching and mentoring and help with connections to entrepreneurs as mature.

One of the challenges we have in Indiana right now is a lot of our activity is concentrated around the Indianapolis SMSA. The Elevate Ventures mission is to develop and encourage innovation and entrepreneurship, so it is infused in the fundamental strategy and culture across all cities and towns throughout our state.

Where do you see opportunities for Indiana startups to solve problems?

Well, I think that nationally and in Indiana, we are going through the very start of a revolution in business, not unlike the industrial revolution. I think though that this revolution will unfold much quicker. It’s going to be driven by the confluence of engineering and science, and it’s not only going to revolutionize existing business, but will also spawn completely new businesses that we haven’t even imagined yet.

One opportunity that exists within Indiana is to look at the critical verticals I referenced previously. These verticals are really what built the strength of Indiana’s economy. We must understand what the revolution is going to be in each one of those verticals and then leap to the front of the line and really encourage, push, and develop those new technologies, new ways of doing business, new connections between engineering and science that create the new products, the new companies, and new services.

So, with that in mind, what startups in Indiana are you most excited to see grow and why?

One of the areas that has the most potential in Indiana is what I would call life sciences. It is a broad category tied to our universities and large medical institutions throughout our state, but it is really about innovating medicine.

As I mentioned I think there is a convergence accelerating between biological sciences and engineering. That collision between the two of those is creating new therapies, new product concepts, and completely new ways of looking at the whole healthcare challenge and healthcare market. I believe that is going to be one of the significant and exciting opportunities in Indiana. I also think that we are going to see a revolution across data in manufacturing and be able to move to much more aggressive advanced and smart manufacturing. And because of our location, it creates a unique opportunity for Indiana to really be at the head.

If you could predict what the 2030 entrepreneurial ecosystem in Indiana could look like, what characteristics and qualities would it have?

My hope would be that innovation and entrepreneurship is really part of the culture of Indiana. It is embedded even in small cities and towns, in addition to the large metropolitan areas around our state. People begin to talk, act, and feel like entrepreneurs and innovators in our state. I think that’s the way we’re going to save some of these small towns that are going out of business and losing population. I also think it’s going to be a way for us to attract and retain talent in our state.

Another 10 years from now, I envision a much healthier financial ecosystem, an ecosystem that has a lot of angel and sophisticated capital across the entire fund structure from pre-seed through rapid growth.

And I think we’re going to see universities with robust innovation and entrepreneurship programs and education. I see the education and encouragement of innovation and entrepreneurship all the way down through our K-12 system. Entrepreneurship and innovation will become part of the lexicon, part of the discussion, part of the ideas, and really part of our way of life as a state.

As the Manager of Communications and Digital Strategy at NVCA, Devin plays a central role in NVCA’s communications operation, communicating with key constituencies in the entrepreneurial ecosystem as well as enhancing NVCA’s brand in Washington, D.C. Devin develops and executes on the organization’s communications and public relations strategies and creates media content to support them.