Venture capital investing has been a little soft in the middle of America, causing some despair in Indiana and Montana. First, the Hoosier State's sixth-largest VC firm is closing the books on its venture capital program after just seven years in business. Irwin Ventures, a subsidiary of Irwin Financial Corp., dreamt of capitalizing on the dot-com boom, but then that went bust. "Based on the results since inception," Ross Demerle, an analyst with Hilliard Lyons of Louisville, Ky., told the Indiana Business Journal, "this line of business was a financial disaster."
Irwin, which specializes in financial technology, had a portfolio – containing only six non-Indiana companies – that fell in value from $12.6 million in 2002 to $4.5 million recently.
What's more, it wasn't able to attract the kind of business it wanted. The paper reports that Irwin received a lot of inquiries from people who wanted funding to open beauty salons and the like, not exactly what the firm had in mind. In general, venture capital isn't a big-ticket item in the state; after all, Irwin was tied with Cambridge Ventures for sixth-largest with only $20 million AUM. Steve Beck, president of Indiana Venture Center, told the Journal, "We have such a minimal supply of capital that early-stage companies are beside themselves. That's probably our single biggest dilemma now," According to the IBJ, Irwin says it will focus on other unspecified areas, but would entertain unsolicited proposals that fit their bill.
Meanwhile, up in Montana, Credit Suisse First Boston has raised the white flag over its efforts to help the Montana Board of Investment's launch a regional VC fund. According to the NewWest Web site, the MBI put up $25 million for the fund and retained CSFB to raise another $15 million. Last month, however, the investment bank said it could not get a single one of the 64 funds it contacted to commit to invest in the Montana, considered a "flyover" state not hot for investment. Russ Fletcher, founder of the Montana Associated Technology Roundtables, says CSFB was met with skepticism about opportunities in the region as well as a been-there-done-that attitude. Fletcher notes that the bank has agreed to keep working to raise money until its contract expires in May – at no charge.
Irwin, which specializes in financial technology, had a portfolio – containing only six non-Indiana companies – that fell in value from $12.6 million in 2002 to $4.5 million recently.
What's more, it wasn't able to attract the kind of business it wanted. The paper reports that Irwin received a lot of inquiries from people who wanted funding to open beauty salons and the like, not exactly what the firm had in mind. In general, venture capital isn't a big-ticket item in the state; after all, Irwin was tied with Cambridge Ventures for sixth-largest with only $20 million AUM. Steve Beck, president of Indiana Venture Center, told the Journal, "We have such a minimal supply of capital that early-stage companies are beside themselves. That's probably our single biggest dilemma now," According to the IBJ, Irwin says it will focus on other unspecified areas, but would entertain unsolicited proposals that fit their bill.
Meanwhile, up in Montana, Credit Suisse First Boston has raised the white flag over its efforts to help the Montana Board of Investment's launch a regional VC fund. According to the NewWest Web site, the MBI put up $25 million for the fund and retained CSFB to raise another $15 million. Last month, however, the investment bank said it could not get a single one of the 64 funds it contacted to commit to invest in the Montana, considered a "flyover" state not hot for investment. Russ Fletcher, founder of the Montana Associated Technology Roundtables, says CSFB was met with skepticism about opportunities in the region as well as a been-there-done-that attitude. Fletcher notes that the bank has agreed to keep working to raise money until its contract expires in May – at no charge.
