One of the state’s newest venture capital funds, the Indiana Philanthropic Venture Fund (or “IU PhV”), has a unique back-story. Originally born of proceeds from the sale of ANGEL Learning nearly a decade ago, the $15 million IU PhV evergreen fund will invest in Indiana University-connected startups and entrepreneurs, and alumni and friends of the university can make donations to support the funds’ longevity.
Ultimately, the IU Research and Technology Corporation (IURTC) intends for the new fund to reach $50 million with growth coming from equity realizations of successful investments, as well as donations. All gains will be reinvested into the fund and donations to the IU PhV Fund will be handled the same way gifts to any other cause or project of the university are handled.
The start of something big
Indiana University had significant ties to ANGEL Learning, an Indianapolis-based educational software provider that was acquired for $100 million in 2009 by Washington, D.C.-based Blackboard Inc. ANGEL Learning was created in the late 1990s by Indiana University faculty member (and learning software pioneer, ney, legend) Dr. Ali Jafari and his student David Mills (now CEO of Tenant Ventures) at the IUPUI campus in Indianapolis. Well-known Indianapolis area tech executive Christopher Clapp served as founding CEO.
When the sale of ANGEL Learning was final, Indiana University and IURTC had earned $25 million — $10 million of which was set aside to be reinvested into more companies with Indiana University DNA. Special consideration would be given to those with IU-related intellectual property and companies with founders from the school. This idea gave birth to the Innovate Indiana Fund in 2011 — a fund designed to promote a culture of entrepreneurism within the Indiana University family by helping early-stage venture companies grow to the next level of success.
IURTC, IU Medical Group Foundation and the IU Foundation together seeded the original fund, which is now invested in more than 25 companies including Anagin, Canvas, Costello, Diagnotes, MomentPath, PrecisionHawk, Sharpen and ZIO.
A dedication to something even bigger
With the Innovate Indiana Fund and other successes to build on, a history of providing much-needed investments into Indiana companies and a clear mission under the IU 2020 Bicentennial Strategic Plan to help build a prosperous and innovative Indiana, the IURTC and the IU Foundation again made a commitment to create another fund. IURTC and the IU Foundation seeded the new fund with $15 million in November 2017, creating the IU PhV. Equity realizations from IU PhV fund investments will be returned to the fund making it open-ended and evergreen. IURTC allows alumni and friends of the school to donate to the fund as well. These alumni and friends do not function as Limited Partners (LPs) or investors but as donors who want to see IU entrepreneurs succeed and IU discoveries to impact society and provide financial benefits back to the university to advance the mission.
The new fund was launched in March of 2018 with Teri Willey joining IURTC as an Executive Director and Fund Manager for the IU PhV. Teri has managed, created and advised on similar funds, including one for the University of Cambridge where she served as Chief Executive as Cambridge Enterprise, Ltd. Prior to that she served as co-founder of the ARCH Development Partners venture fund, a fund of the University of Chicago and Argonne National Laboratory.
“We are seeing excellent deal flow in Indiana,” said Willey. “Our investment committee has approved nine investments to date and we continue to look at new opportunities. We are pleased to be building our portfolio as well as investment syndicates and expect many of the teams we are investing behind will continue as part of critically needed management and investment talent in our region.”
IU PhV makes seed and early-stage equity investments in Indiana University-related early-stage technologies, or science-based businesses, including those based on Indiana University research or scholarly activities or founded or managed by Indiana Alumni. IU PhV invests at the seed round through Series B stage and will follow-on invest when warranted. To date, the IURTC investment committee has approved investments ranging from $150,000 to $1 million. Companies in the PhV portfolio already include Care Revolution, Doxly, NERx BioSciences, Scioto Biosciences and Vascugen.
More information on the Indiana Philanthropic Venture Fund can be found at https://go.iu.edu/PhV.