2013 Annual report
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Ta bl e of C o n t e n t s
Mission Statement and Values....................................................................................................................................3 Letter from the CEO............................................................................................................................................................4 Investment.................................................................................................................................................................................6 Investment Purpose and History
2013 Portfolio Companies
Portfolio Companies..........................................................................................................................................................9
Funnel Report
Full Portfolio
Assistance...............................................................................................................................................................................13 Business Assistance Purpose and History
Economic Gardening Companies
Board of Directors, Staff and Stakeholders . ............................................................................................17
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Missio n Statement: Elevate Ventures serves to n urt ur e and de ve lo p emerging and existing high-potential . businesses into h i g h - p er f o r m ing , Indiana-b ase d co mpanie s.
Value s: To build t r a n s pa r e n t and h o n e st relationships with int e gr ity . and c ommun i cat i o n . To be pass i o n at e , d e t e r m ine d , and dr ive n . To e m br ac e d i v er s i t y. To treat everyone with d i g n i t y and r e spe ct . To serve entrepreneurs in g o o d fa it h , r e spo nsib ly and with ca r e , . c om pe t en c e and d i l i g e n c e .
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Let t e r f ro m t h e C EO
Over the last decade, investors on the west coast have come to realize that capital, while a critical component, is not the be all and end all solution to catalyzing growth. Instead, capital has become one part of a two part formula to innovate and catalyze growth. So what is the other part? It is entrepreneur assistance. Elevate Ventures has recognized this formula (capital + assistance = improved outcomes for entrepreneurs) since its . formation in 2011. This approach is the very reason why the management team at Elevate Ventures has been able to increase the investment capital leverage ratio from 1.2:1 in 2009, to 10.2:1 from 2009 to 2013. Certainly, we are not the only venture development group that executes this formula. And so often times I am asked the question, what separates Elevate Ventures from the other investor groups in the Midwest, and around the country? . My answer is simple. Elevate Ventures is committed to the growth of Hoosier companies whether we invest or catalyze other investors to “crowd us out”. Our leverage ratio is a testament to our commitment to help Hoosier companies become “investment ready”. And at the end . of each year, we must measure our success by the number of Hoosier companies we have helped to make “investment ready”. In 2013 we invested over $3.5 million in seven new companies with over $11 million in follow on (private) capital into these companies. In addition, our existing portfolio of companies received over $24 million in additional follow on (private) capital, while securing a combined annual revenue total of over $40 million. And while these numbers are certainly worth celebrating, we recognize our job is far from over. We must continue to weave the innovation intermediaries together with angel investors all over the country and leverage the combination of mentoring, due diligence and asset management skills necessary to build more high growth companies. We must not fear the possibility of failure; rather we should embrace it, for it will strengthen our resolve to become the most innovative, entrepreneurial state in the union.
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As you may recall, our strong focus on filling significant capital gaps on the early stage funding continuum created some operational mistakes that we acknowledged, and committed to fix. I am happy to report that we have implemented all 25 of the recommended changes outlined in the KPMG audit report. In . addition we worked closely with the Sponsel CPA firm to demonstrate those changes were made, and continue to work with the IEDC and the Governor’s office to ensure such mistakes never happen again. We also hired a General Counsel and Chief Compliance Officer with a direct reporting relationship to the Board of Directors at Elevate Ventures. This proactive measure will not only prevent future potential conflicts, but also strengthen our organization and its investment process. As we continue to work with, identify, and grow high potential Hoosier companies, I would like to dedicate these last few . lines to the many stakeholders and supporters of our organization. This year’s success, and the years before, would not be possible without your support. And so I thank you. As we look to 2014, I am confident that together, with our formula for innovation and growth, and the continued support of communities and individuals across the state, this private/public relationship that Indiana has formed with Elevate Ventures will become a model for success across the nation. Respectfully yours,
Steve Hourigan CEO
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in v e s t m e n t
2013 In vestment Po rtfo li o Elevate Ventures was formed in 2011 in order to make capital more accessible to . Hoosier entrepreneurs. Since then, the firm has worked diligently to effectively manage three funds totaling over . $80 million dedicated to Hoosier entrepreneurs. In addition, the non-profit organization has . cultivated and strengthened hundreds of relationships with venture capitalist and angel . investors across the Midwest, and from coast to coast. The networks built across the nation in combination with the managed funds and the experienced team at Elevate has helped to make Elevate Ventures one of the leading venture capital firms . in the state. The year 2013 marked an important stage for Elevate Ventures. Portfolio companies exceeded . $40 million in total revenues; in addition to receiving $24 million in follow on (private) capital, bringing the total follow on (private) capital to over $130 million. Just as the economic landscape continues to change, Elevate Ventures and the state of Indiana will continue in its unwavering commitment to Hoosier entrepreneurs and businesses. This commitment has placed Indiana among the top business climates in the Midwest, and continues to make Indiana one of the most competitive states for business, on a national and global scale.
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2013 Portf ol i o Co mpa ni es Portfolio companies are companies that Elevate has financially invested in through the Diversity Fund, . the 21st Century Fund, or the Indiana Angel Network Fund (Angel Fund). Each fund has its own criteria and qualifications, but the purpose remains the same; provide Hoosier entrepreneurs and companies with the capital they need to grow and scale their company. In 2013, Elevate invested in seven new companies and re-invested into two existing portfolio companies, totaling $3.63 million. Featured below are the nine investments made in 2013.
Ba byP lu s
Comp endiu m (Acquired by Oracle) Location: Indianapolis Elevate Investment: $1.5M About: Compendium’s content marketing platform is the missing link between sophisticated marketing automation; email platforms and our quest for 1:1 communications strategies which fuel an exploding demand for content. In fact, reports show that 39% of all marketing dollars are spent on content marketing; and B2B and B2C marketers are projecting nothing but growth. . Compendium is primed to capitalize on the industry’s rampant expansion.
Oa k F in a nc i a l S o f t wa r e C o r p o r at i o n
Wol f e Diversif ied Indu st ries
Location: Fishers Elevate Investment: $125K About: BabyPlus curriculum is a series of 16 naturally derived sounds that resemble a mother’s heartbeat. The rhythm of the sounds increases incrementally as the pregnancy progresses. The BabyPlus sonic pattern introduces a child to a sequential learning process, built upon the natural rhythms of their own environment. This “auditory exercise” strengthens learning ability during the developmental period when the advantages will be most significant and enduring for a child.
Location: South Bend Elevate Investment: $300K About: Oak Financial Software Corporation has built technological solutions and a product that gives great convenience to the customer, through a prepaid card, mobile apps and customer rewards on the consumer side; and attractive POS solutions, business intelligence and agent rewards. for the initial retail distribution channels.
WOLFE DIVERSIFIED INDUSTRIES LOCATION: Anderson ELEVATE INVESTMENT: $225K ABOUT: Wolfe Diversified Industries is a technology and e-commerce company with divisions in school services and non-school services. The non-school services division, Corporate Apparel Unlimited, operates 13 e-commerce apparel websites. The school services division, Ticketracker, is a rapidly growing online registration and payment-processing platform specialized in the K-12 market.
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In v e s t m e n t
S t e a dy S e rv t e c h n o l o g i es
Location: Carmel Elevate Investment: $500K About: SteadyServ Technologies is a mobile SaaS based inventory and order management system for the beer industry. The company . provides real time intelligence via a smartphone app to retail establishments and distributor sales staff. For retailer establishments, SteadyServ . helps solve long standing problems such as . increasing sales revenue, significant time savings in the ordering process, ensuring order accuracy, and maintaining end customer satisfaction and loyalty. For distributors, SteadyServ increases sales and mitigates angry retail establishments calling due to incorrect orders. For end customers, SteadyServ indirectly ensures that they get the beer they have come to the retail establishment to enjoy.
Gusto
Location: Indianapolis Elevate Investment: $250K About: Gusto provides a platform to improve email, productivity, and digital organization for the world, on mobile, desktop, and the web. Digital lives are spread across the internet, with multiple email accounts, forgotten attachments, and files/ photos scattered throughout the desktop, the cloud, and buried in email. Gusto automatically organizes all of user’s files, photos and email.
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C ur v o
Location: Evansville Elevate Investment: $50K About: Curvo provides a dashboard for . healthcare institutions to manage costs. . Hospitals need to save money and medical . device companies need to sell products . efficiently. With Curvo, they both win. Hospitals . use Curvo for free by sharing their purchasing . data and medical device companies buy . access to Curvo and use hospital data to . make targeted offers.
M a x t r a dein
Location: Indianapolis Elevate Investment: $300K About: MaxTradeIn.com™ empowers vehicle owners to maximize their trade-in value while . building long-term customers for dealers. Its . platform is the intersection of a consumer’s purchase intent and a dealer’s opportunity to win. Consumers are directed to MaxTradeIn.com to list their vehicle for trade or sell and select dealers to submit competitive offers on the vehicle.
Fast BioMedica l Location: Indianapolis Elevate Investment: $500K About: FAST BioMedical is a private, clinical stage medical technology company focusing on development and commercialization of a patented technology for quantifying clinically relevant . parameters that have been challenging or . impossible to measure in the past. Its current focus is to develop a technology for quantifying volume status and kidney function in a clinically actionable time frame. FAST BioMedical has the exclusive license for a proprietary technology developed by the Indiana Center for Biological Microscopy.
Wol f pac k Chass is
Location: Kendallville Elevate Investment: $104,740 About: Wolfpack Chassis builds chassis and chassis-related components for the RV and . Manufactured Housing industries with a focus on quality, service and delivery. With over 30 years of combined manufacturing experience including chassis production, design, and product . development, the chassis team focuses . exclusively on chassis and chassis components . to offer customers value-added solutions and . high quality chassis systems.
Port f ol i o C o m pa n i e s
Fun n el Repo rt Since its formation in July of 2011, Elevate Ventures has provided nearly 400 companies with business assistance. The assistance includes direct support from the local Entrepreneur-In-Residence, referrals to other programs that can help entrepreneurs, and introductions to local legal and financial resources. Of the 934 leads since 2011, 81 companies have entered our rigorous and extensive due diligence phase. Of those 81 companies, 45 received investment commitments, and as of December of 2013, 28 of those 45 investments have closed. I nv es tme nt Oppo rt u nit ie s 7/ 2011 – 1 2 /2 0 1 3 934
Leads . . . . . . . . . . . . . . . . . . . . . .
386
Business Assistance . . . . . . . . . . . . . . .
119
Investment Presentation . . . . . . . . . . . . . . . . Due Diligence . . . . . . . . . . . . . . . . . . . . . . . . . . . . Investment Committee . . . . . . . . . . . . . . . . . . . . . . Investment Commitment . . . . . . . . . . . . . . . . . . . . . . Funded/Funding in Progress . . . . . . . . . . . . . . . . . . . .
81 56 45 28
I nv es tme nt Oppo rt u nit ie s by Fun d 7/ 2011 – 1 2 /2 0 1 3 21 Fund Opportunities 139 51 35 23 14 10
Investment Track Stage Business Assistance Investment Presentation Due Diligence Investment Committee Investment Commitment Funded/Funding in Progress
Angel/Diversity Fund Opportunities 247 68 46 33 31 18
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Port f ol i o C o m pa n i e s
C o m pa n y
Sum In vested
Aquaspy $1,000,000 BabyPlus $118,750 CloudOne $1,325,000 Compendium $1,000,000 Courseload $600,000 Curvo $50,000 Emerging Threats Pro $500,000 EnviroSolve Technologies $1,000,000 FAST Biomedical $1,500,000 Gusto $250,000 hc1 $2,000,000 Jada Beauty $125,000 MaxTradeIn $300,000 Oak Financial Software Corporation $300,000 PartTec $600,000 PDS Biotechnology $1,875,000 PolicyStat $500,000 RedPost $37,500 Salesvue $500,000 Smarter Remarketer $500,000 SonarMed $1,000,000 Sproutbox $200,000 SteadyServ Technologies $1,500,000 StrayLight Optical $500,000 VoCare $500,000 Wellfount $1,900,000 Wolfe Diversified Industries $475,000 Wolfpack Chassis $229,740 Grand Total Sum of Private Capital Total
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$20,385,990 $130,309,249
Full po rtfo lio Since 2011, Elevate Ventures has made 4 2 inve st me nts into 2 8 co mpanie s , . totaling nearly $ 2 1 m i l l i o n i n co mmit t e d ca pital . The portfolio companies consist of three main industries; .
Advanced Manufacturing (13%), . Information Technology (71%), . and Life Sciences (16%).
13%
16%
71%
Elevate’s portfolio has g en er at e d o ve r $130 millio n in follow on funding . (private capital), which equates to a l e ve r age r atio o f 6.39:1 . The portfolio companies currently e m p loy 516 pe o ple and pay an . av e rag e sa l a ry o f $ 7 2 ,1 5 7 . Total portfolio r e v e n ue e x c e e ds $ 4 0 M 2013 follow on f un d i n g for the portfolio companies to tale d $ 2 4 millio n .
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Port f ol i o C o m pa n i e s
PORTFOLIO COMPA NY TES TIM ONIAL S : “ Elevate Ventures has served as a tremendous asset. to our company. The team’s knowledge, guidance, and assistance continue to prove extremely valuable as our company rapidly expands. I am absolutely thrilled to have the support and help of Elevate Ventures, and I truly look forward to working with them in the future.”
- Robert Frost. CEO. Wolfpack Chassis
“ A few States desired AquaSpy to make them our new home once we migrated from Australia and became a U.S. Corporation, but Indiana and Elevate Ventures followed through and did what they said they were going to do with no delays or excuses. They made us know we were wanted and appreciated here and connected us to influencers in our markets and in the Community. The access to information and to decision makers is only a request away, so we are truly glad to have made the choice to relocate to Indiana and to partner with Elevate.”
- Bruce Moeller . CEO . Aquaspy “ Elevate has a rigorous due diligence process which, in all candor, was a bit of a gulp for a small company. What we found, however, was that working through the effort with Elevate greatly facilitated our ongoing investment efforts. If a new investor was asking for something, it was likely we had already put it in place for Elevate.”
- Mickey Levitan, Founder. CEO. CourseLoad
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Ass i s ta n c e
Business Ass istance Since its inception, Elevate Ventures realized that while capital is a critical component to fostering . growth among Hoosier businesses and startups; business/entrepreneur assistance and mentoring are equally important. With that understanding, Elevate Ventures continues to implement in coordination with the Edward Lowe Foundation, the Economic Gardening program. The program serves to help second stage companies identify new opportunities – pointing them to the tools, information, and resources they can apply immediately to take their business further. In 2013, Elevate Ventures helped provide over 2,000 hours of Economic Gardening service to over . 50 companies throughout Indiana. These companies realized over $300 million in combined 2013 . annual revenues, supporting nearly 1800 full time jobs. With the help of Elevate Ventures and the Economic Gardening program, there is little doubt these . companies will continue to grow while furthering Indiana’s economic success.
Ec o no m ic Gar de ning Te st imon ials “ The Economic Gardening Program’s expert team of consultants helped me formulate our strategic growth plan that has already begun paying dividends. I’m confident in our vision for the future because of the resources and guidance that I gained through the program and I’m looking forward to great results in 2014.”
- Eric Stine.
“ Elevate’s Economic Gardening program had a significant impact in the early stages of our planning for our (now) rapidly scaling sales force. The EG teams’ assistance in data gathering and analysis helped shape our strategies for Business Development for 2013 and beyond.”
Vice President of Business Development. ECP American Steel
- Bryan Falcon.
“ Elevate Ventures was critical in helping us completely revamp our website. Since then, we have seen a direct increase in sales as a result. In addition, the strategic advice provided through the Economic Gardening program will help us tremendously as we continue to grow.”
CEO. Haiku Learning
- Jeff Maki. CEO. Bone Models Plus 13
2013 Eco nomic G ar deni ng C om pa ni es
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C o m pa n y
City I n d ustry
Accreditation Services Bureau
Fort Wayne
Testing/Technology
Adaptive Micro-Ware, inc.
Fort Wayne
Electronic Design
Alicks Home Medical
Elkhart
Medical Device
Allied Payment Network Inc
Fort Wayne
Financial
Alpha Manfacturing & Design, LLC
Warsaw
Manufacturing
Ashley Industrial Molding, Inc
Ashley
Manufacturing
Automation Engineering LLC
Fort Wayne
Engineering/Design
B&B Manufacturing, Inc.
LaPorte
Tooling/Assembly
B & E, Inc.
Valparaiso
Automotive
Bashpole Software, Inc.
North Webster
Software
Bowmar LLC
Fort Wayne
Assembly
Critical Dimensions LLC
Mishawaka
Plastic Products
Crowley Engineering LLC
Schererville
Engineering/Design
DeerSpace LLC
Waterloo
Outdoors/Hunting
Diversified Marketing Strategies, Inc.
Crown Point
Marketing/Brand Development
ECP American Steel, LLC
Fort Wayne
Manufacturing
Elkhart Bedding Co Inc
Elkhart
Manufacturing
EmNet, LLC
South Bend
Technology
Engineered Systems, Inc.
Fort Wayne
Engineering/Electrical
ENS GROUP
Fort Wayne
Technology
Enspire Software, Inc.
Fort Wayne
Software/Technology
ESGI
Elkhart
Software
Exact-Tech Machining Inc.
Elkhart
Machining
Forks RV, Inc.
Shipshewana
Manufacturing
Grease Warehouse Inc.
Cedar Lake
Automotive
HealtheACCESS Clinics, LLC
Valparaiso
Healthcare
Hoosier Tank and Manufacturing, Inc
South Bend
Manufacturing
House of Fara
LaPorte
Manufacturin
Indiana Materials Processing LLC
Columbia City
Steel Supplier
Inovateus Solar LLC
South Bend
Energy
KIB Electronics
Elkhart
Manufacturing
Kilgore Manufacturing Co Inc
Columbia City
Machining/Assembly
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Knight Mechanical Testing LLC
Fort Wayne
Testing/Technology
Koester Metals, Inc.
Fremont
Metal Fabrication
Korhorn Financial Group, Inc.
Granger
Financial
Mixdesign, Inc
Schererville
Marketing/Brand Development
Neoti, LLC
Bluffton
Digital Advertising/Rental
North American Signs, Inc.
South Bend
Manufacturing
One Lucky Guitar, Inc.
Fort Wayne
Music
Precision Plastics, Inc.
Columbia City
Injection Molding
Profile Systems LLC
Merrillville
Technology
QIG, LLC
Columbia City
Testing/Technology
QuikCut Inc.
Fort Wayne
Steel Fabrication
Radiological Technologies University
South Bend
Radiology/Healthcare
Reach360
Elkhart
Financial
Simplx Security
Fort Wayne
Security Systems
TCB Manufacturing
LaPorte
Manufacturing
Tempus Technologies
Auburn
Financial
Valley Screen Process Co. Inc.
Mishawaka
Graphics/Advertising
Worldwide Foam, Ltd.
Elkhart
Manufacturing
Boa rd of D i r ec t o r s
Board o f Dir ecto rs Robert Myer, Southwest Indiana John Schneider, Purdue University Mike Davidson, Northeast Indiana Phil Lodato, Elevate Ventures
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Sta f f
Staff Steve Hourigan, Chief Executive Officer Ting Gootee, Chief Investment Officer Phil Lodato, General Counsel, Chief Compliance Officer Barbara Uggen-Davis, Chief Financial Officer Jonathon Fruchte, Director of Investment Operations Erica Schweyer, Senior Analyst Alexandra Bowers, Executive Assistant Karen Goldner, Economic Gardening Program Director Kregg Kiel, Entrepreneur-in-Residence, North Central Region Robert Clark, Entrepreneur-in-Residence. Northeast Region Kelly Schwedland, Entrepreneur-in-Residence, Northwest Region Dan Owen, Entrepreneur-in-Residence, Southern Regions
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201 3 Sta k e h o l d er s
Start here and go further thanks to the generous support of our stakeholders from all across the state of Indiana.
S tatewide Su pport
Sin gl e-Region Support
Indiana Economic Development Corporation
Anonymous (1) Ambassador Enterprises BEACON Health Systems Allen County Board of Commissioners City of Fort Wayne Community Foundation of St. Joseph County Corporate Partnership for Economic Growth Do it Best Corp. Economic Development Coalition of Southwest Indiana Elkhart County Community Foundation Freedom Bank German American Bancorp Greater Fort Wayne Chamber of Commerce Jasper Engines & Transmission Inc. Key Bank Koch Enterprises, Inc. McGladrey LLP Memorial Hospital and Health Care Center Menke Charitable Foundation MutualBank Charitable Foundation Inc. Northeast Indiana Regional Partnership Olive B. Cole Foundation Inc Parkview Health Regional Impact Fund, Inc. Seufert Construction & Supply Co., Inc. STAR Financial Stepstone - Kosiusko Community The MTI Foundation, Inc. Tower Bank & Trust Company University of Notre Dame du Lac Vectren Foundation
M u lti - Re gio n Su ppo rt 1st Source Foundation Frontier Communications KeyBank Foundation Lake City Bank Old National Bancorp
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Start here. Go further.
Elevate Ventures 50 East 91st St Suite 213 Indianapolis, IN 46240
Phone: 317.252.0258 Fax: 317.252.0255 www.elevateventures.com
Š 2014 Elevate Ventures All rights reserved.