Investors: City can improve its startup ecosystem rank
| Business Weekly
August 3rd, 2018
Northeast Indiana has important advantages its entrepreneurs can leverage to help improve the region’s image with angel investors and venture capitalists, and to compete with entrepreneurs in other cities for tech company startup and early-stage funding.
That was the opinion of investors participating in a mid-July panel discussion Fortitude Fund held at Parkview Hospital’s Mirro Center. Panelists included Victor Gutwein, managing director of M25; Aaron Gillam, senior vice president of 50 South Capital; Nick Arnett, 1517 Fund community manager, and Robert Clark, Elevate Ventures entrepreneur-in-residence.
M25, a Chicago micro venture capital fund, had ranked what it considered the Midwest’s best locations based on their tech startup ecosystems, and shared the results early in the panel discussion, which showed Fort Wayne coming in 29th out of 52 cities.
The investment discussion was moderated by Steve Franks, Fortitude Fund program manager. He sought panelist responses to the ranking, asking them to identify some of the region’s advantages and explain how they could be used to improve Fort Wayne’s rank.
While acknowledging Fort Wayne is not the primary location of a major research university, such as Indiana University, Purdue University, or the University of Notre Dame, Clark noted that even with Notre Dame, South Bend was only ranked 24th.
“They should be way higher than us, way higher,” Clark said. “And so, the fact that we’re that close, I’m really encouraged by those numbers.”
In addition to the interest expressed by the much larger Purdue Fort Wayne in collaborating with the business community, there are “many small universities here in northeast Indiana, that when working together, can make a big difference,” he said.
M25’s “Best of the Midwest Report” ranked Toledo 41st, and Gutwein said its population and economic base are similar to Fort Wayne’s.
The Summit City has a much larger population than South Bend, Lafayette and Bloomington, and attracting talent from those university towns helps Fort Wayne’s tech startup ecosystem outperform Toledo’s, he said.
Fort Wayne also had a better tech startup ecosystem because its largest university, known until recently as Indiana University-Purdue University Fort Wayne, has been a source of new tech talent and entrepreneurs, Gutwein said.
“I was talking to some of the people today about the internship program and they were able to grow talent from within,” he said. “IPFW was actually spinning off some really good interns.”
A culture of entrepreneurship within a city can influence a decision by an entrepreneur on where to launch an extremely promising tech startup as well as investor decisions on where to look for the most promising tech startups, Arnett said.
“When I was a little younger in Fort Wayne that (entrepreneurship) wasn’t the traditional path,” he said. “If you wanted to do something entrepreneurial, if you wanted to start your own company, people kind of looked at you and said, ‘Well, why would you want to do that instead of going to college or instead of getting maybe a single job, something that’s not too risky, something that’s a little more traditional.’”
That attitude has finally started to shift.
“We’re starting to see greater acceptance of people who go off the beaten path and are creating their own paths now, in large part through things like the Fortitude Fund and what Elevate Northeast Indiana is doing here,” Arnett said. “But we’ve got a lot of work to do.”
Gillam agreed with the opinions expressed by Clark, Gutwein and Arnett, and suggested that Fort Wayne entrepreneurs also could leverage the city’s relative proximity to Fortune 500 company headquarters locations to market the growth potential of their tech startups.
“When I see companies that come up with great software in Silicon Valley, you know who they’re calling on to test all of that great software,” he said. “They’re calling on all of the Fortune 500, Fortune 1,000 companies here to grow.”
Because they don’t have access to those clients there, they come to places like Fort Wayne to test it.
“So that’s one thing that we can always leverage is our geography,” he said. “We already have the established industries here.”
Gillam was referencing some “Midwest fun facts” included in a Microsoft PowerPoint presentation Gutwein shared early in the panel discussion.
A presentation slide that said the Midwest had the world’s fifth largest economy also said it had more Fortune 500 company headquarters locations than any other region, and 27 percent of the nation’s computer science graduates.
As a percentage of all venture capital deals done in the nation, M25 research showed the Midwest’s share has grown to 9.6 percent from about 3.25 percent in 2002.
