Last Thursday, Elevate Ventures hosted its second annual Kinetic conference in Indianapolis. National Venture Capital Association (NVCA) President and CEO Bobby Franklin provided the keynote speech, delivering some welcoming and exciting news to those in attendance. He also shared a few policies for which the NVCA is advocating at the federal level. The following are a few takeaways from the conference and Franklin’s presentation:
- Indiana was among the top states in the country in year-over-year increases in venture capital assets under management (AUM) and reached $170 million in total AUM, thanks to recent fundraises by local venture firms.
- In 2018, 93 start-ups in Indiana raised nearly $370 million in funding, representing a 37% annual growth rate in capital invested since 2013.
- Total investment deals and capital reached a 10-year high in 2018 and ranked Indiana fifth overall for growth.
- Central Indiana, i.e. the Indianapolis metropolitan statistical area (MSA), saw the biggest growth for investment deals and dollars invested over the past five years among all MSAs with at least 15 deals and $10 million in investment (calculated on a compound annual growth rate basis).
- Franklin praised Indiana’s economic development organizations for supporting start-up and entrepreneurial growth, calling it an “unparalleled collaboration in innovation.” Some of the credit goes to Elevate Ventures and its five regional partnerships that go a long way toward building entrepreneurial ecosystems throughout Indiana.
NVCA’s policy focus in Washington targets the following:
- The Foreign Investment Risk Review Modernization Act of 2018 (FIRRMA) expanded the jurisdiction of the Committee on Foreign Investment in the United States (CFIUS) to address potentially growing national security concerns over foreign exploitation of certain investment structures. Franklin cited a few implications of the legislation including (1) hindering foreign nationals working for companies developing “critical technology”; (2) limiting foreign capital investments from, among other places, China; and (3) a wave of new export regulations likely to hit U.S. technology companies.
- The Volcker Rule, which is a provision in the Dodd-Frank Act, restricts banks from using FDIC-insured depositors’ capital to make investments in hedge funds, private equity funds or other alternative asset fund managers. Prior to the Volcker Rule, community and regional banks invested actively in limited partnerships – especially in middle America.
- Finally, NVCA is working on an entrepreneur visa.
This concept hit home for me later in the day. As soon as I finished speaking on a panel about non-dilutive capital and tax credits, I was approached by an international Purdue MBA student who complained that many of his friends leave Indiana after graduating. He said that many would love to stay and start a company but are precluded from doing so due to visa restrictions. The visa certainly sounds worthy of further study!