Risk & reward: major Indiana venture-capital firms.

• Author: Kaelble, Steve
• Position: Business Finance - Directory

A major concern that some have raised about Indiana's entrepreneurial future has been the relative lack of venture capital available to hatch fledgling operations and help them grow. But that situation has been changing in recent years.

"The number of firms and amount of capital is growing at a rate that is healthy," says Don Aquilano, managing director of Gazelle TechVentures in Indianapolis. It's building like a snowball rolling downhill, which Aquilano adds is preferable to an avalanche. "You don't want hundreds of millions of dollars showing up overnight. It has to grow with the rest of the ecosystem, if you will."

"The way you generate venture capital is with venture-capital successes," observes Steve Beck, president of the Indiana Venture Center in Indianapolis. "We want to be sure that the success level is strong so that we will entice them to do more."

Looking for venture capital? Though there's more venture capital out there than ever, companies still must take care when searching, says John Aplin, managing partner at CID Equity Partners in Indianapolis. "One of the things most people don't understand is that venture-capital firms tend to do certain types of transactions," he warns. "Know the venture-capital firm. Know what their sweet spot is."

Each firm, he notes, is likely to have certain industries in which it prefers to make investments. And while some, like CID, will make investments at many stages of corporate growth--from seed capital to mezzanine financing to buyouts--others have a much narrower "sweet spot."

Following are some of the state's major venture-capital organizations:

Cambridge Ventures, Indianapolis--This organization aims investments of $100,000 to $1 million toward companies within 200 miles of Indianapolis. It focuses on second- and third-stage investments, mezzanine funding and buyouts. 317/814-6192.

Cardinal Ventures, Indianapolis--This privately owned partnership seeks to acquire businesses and grow them organically or through acquisition. Target investments include management buyouts, recapitalizations and generational ownership changes, with transaction values between $5 million and $30 million. 317/228-5070, www.cardvent.com.

Centerfield Capital Partners, Indianapolis--Centerfield has a strong interest in health-care products and services, information technologies and telecommunications, business and financial services, as well as manufacturing and value-added distribution. Most of its deals are...