Musings on Entrepreneurship and Innovation
Wednesday, June 16, 2004
Bird Dogging Technology Deals in Northeast Indiana
This morning I had the pleasure of engaging Karen Goldner in one of my Quick Take interviews. She administers the new adVenture Fund in Fort Wayne, Indiana. As Karen tells the tale, there is a significant amount of under-employed or under-inspired engineering and technical talent in Northeast Indiana, and a group of area entrepreneurs and angels sense a way to make some money while helping catalyze the transformation of their community's economy.
Given a target size of just $1.5 million, the adVenture Fund doesn't stand on its own economically. But, that's by design. As I understand it, the adVenture Fund is a bird dog fund. That is, it's designed to attract and identify viable seed stage investment opportunities. While $1.5 million isn't even sufficient to fund the needs of a single high-growth technology company, doled out in $50,000 increments, it can fund lots of seed stage explorations without the need for a lot of heavy transactional lifting. Each of adVenture Fund's investments will give the Fund's network of angel investors the right, but not the obligation to participate in follow-on rounds, where relatively larger amounts of money can be invested at somewhat lower levels of risk. Relationships with regional early stage venture capital funds allow for additional funding, where warranted.
The fact that the Fund has dedicated management makes it an attractive vehicle for angel investors, who typically aren't that interested in the blocking and tackling of the investment business. It also allows for sustained relationships with downstream VCs. Furthermore, the adVenture Fund is organized as a "special project" of an existing company, FourthWave, which means incremental overhead costs are minimized.
FourthWave was founded by Don Willis, an engineer from the area who left "BigCo" to start his first company, which, according to the FourthWave web site, was ultimately sold for nearly $100 million. It's a great story line: Local entrepreneur does (darn) good; local entrepreneur organizes fund to help others get a start; wealth is created; and the community propers.
I hope that's the way it plays out.