Fort Wayne, Ind. -- The Northeast Indiana Innovation Center has a new investment initiative to help launch some important area technology businesses before the brainpower behind them relocates to another city.
Launch Pad lifted off at the center in August with money from NIIC Capital Ventures fund.
“It is designed to attract and retain our region’s best and brightest minds,” said Remound Wright, director of the NIIC Center for Entrepreneurial Excellence. “It is focused on white-collar and green-collar individuals who have new products they would like to commercialize.”
“The goal is to find those committed to innovation and entrepreneurship and provide them with space to work and funding for their ideas, and a stipend for them to work on while they develop their product.”
The fund is timely because the recession could force the relocation of some of the top workers in the area with the best potential for entrepreneurship, he said.
“They’re losing their jobs left and right and getting laid off, and their companies are moving or forcing them to move to keep their jobs,” Wright said. “We’re trying to attract and increase the number of knowledge workers … in northeast Indiana.”
Entrepreneurship often is attractive to knowledge workers with promising ideas for a new, technology-based business during a career transition period. But the recession has made resources for a startup more difficult to find, he said.
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“In this economy it’s very difficult to borrow against home equity because homes are not worth what they were three or four years ago,” Wright said. “It’s difficult to crash the 401(k) because of uncertainty in the economy.
“Angel investors are reluctant to invest in new opportunities because they have to make sure their existing ventures are secure. Banks are tightening credit,” he said.
“We’re going to invest prior to and for product development,” he added. “Sometimes angels like to see prototypes already available before they will invest. We’re a little bit earlier, in that we’re going to put some funding behind a very viable idea that needs some development.”
The amount Launch Pad would invest in return for equity in a business would depend on where it is in its early development, Wright said.
“In the early stage it might be $10,000. In the prelaunch stage, it might be $15,000. And at venture launch, it might be $25,000.”
The Innovation Center has had its eye out for Launch Pad investment opportunities since September and would like to make two to four investments per year.
Entrepreneurs interested in Launch Pad equity funding must have a five-page executive summary of a business plan reviewed by the NIIC Capital Ventures executive committee.
The summary should touch on the solution the venture will bring to the business problem it addresses, the competitive landscape it will face and startup cost projections. It also should provide information on marketing plans for the business and the team that will run it.
And even if the evaluation does not result in investment, participating in the process could make other Innovation Center resources available for the startup.
The fund is designed to support specific types of entrepreneurship. “We’re really looking for and focusing on life sciences, health care, clean energy and mobile applications that have significant national or even global reach,” Wright said.
It is not for biotechnology or pharmaceutical companies “or restaurants or other local service-oriented companies,” he said.
Investment in promising technology startups by Launch Pad could create five to 10 jobs in the area initially, and if the startups grow to their potential, Wright said the impact on area employment eventually could be much greater.
“We’re just inviting entrepreneurs and inventors or innovators to come and talk to us,” he said.
Source: Northeast Indiana Innovation Center
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