Steven J' Beck

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The Renaissance of Entrepreneurship in Indiana

• Steven J. Beck
• President/CEO
• Indiana Venture Center, Inc.

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The Renaissance of Entrepreneurship in Indiana

• If it is my belief that we are having a
  Renaissance of Entrepreneurship in Indiana, then
  at some time in Indianas past was there a
  successful entrepreneurial economy?
• Yes!!!!!

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The Renaissance of Entrepreneurship in Indiana

• The truth is that for the first 100 years as a
  state, Indiana was a hotbed of entrepreneurship.
• At the beginning of the 20th Century, Indiana was
  the equivalent of the Silicon Valley of
  manufacturing.

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The Renaissance of Entrepreneurship in Indiana

• What is Indianas entrepreneurial history?
• From 1816 to the early 1900s, Indianas
  merchants, bankers, and manufacturers were the
  lifeblood of the state.
• They delivered
• Goods
• Letters
• Newspapers
• Ideas

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The Renaissance of Entrepreneurship in Indiana

• Merchants were the most important businessmen in
  pioneer Indiana.
• They imported the goods from outside Indiana.
• They exported Indianas products to other areas.
• Indianas early merchants also became Indianas
  first bankers.
• They offered goods on credit.
• They held their neighbors money for safekeeping.
• They made payments for them in faraway places
  like
• New York, Philadelphia, and New Orleans.

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The Renaissance of Entrepreneurship in Indiana

• Many of the early successful entrepreneurs
  became the social and political leaders of their
  communities and the State.

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The Renaissance of Entrepreneurship in Indiana

• What did some our early entrepreneurs do?
• Grain Mill
• Blacksmith
• Tannery
• Distillery
• Saw Mill
• Pork Packer

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The Renaissance of Entrepreneurship in Indiana

• Some of these early entrepreneurs were big risk
  takers
• Allen Hamilton Samuel Hanna
• Fort Wayne
• Built the Wabash and Erie Canal
• Nicholas McCarty
• Indianapolis
• Started the Indianapolis Steam Mill Company in
  1828
• Largest milling company east of the Alleghenies
• Failed in 1835 it was 25 years ahead of its
  time

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The Renaissance of Entrepreneurship in Indiana

• Cannelton Cotton Mill Company

• Started by Hamilton Smith in 1847 in Perry
  County.
• One of the first companies to use a coal fired
  steam engine in the US.
• Largest textile factory west of the Hudson River.
• It failed in 1851 due a poor plan and a lack of
  capital.

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The Renaissance of Entrepreneurship in Indiana

• What did these two failures have in common?
• A hunger to have rapidly growing businesses in
  Indiana.
• For Indiana to be less dependent on their eastern
  brethren.

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The Renaissance of Entrepreneurship in Indiana

• Until the end of the 19th Century, most of
  Indianas economy was dependent on products from
  natural resources
• Timber
• Pork Packing
• Liquor distilling
• Lumber
• Carriages Wagons
• Furniture
• Agriculture implements

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The Renaissance of Entrepreneurship in Indiana

• In the late 1880s, the area of Muncie, Anderson,
  Elwood, Marion, Kokomo, and Gas City saw rapid
  development due to a cheap supply of natural gas.
  
• They were known for
• Glass
• Tinplate
• Strawboard

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The Renaissance of Entrepreneurship in Indiana

• By the early 1900s, manufacturing was playing a
  much bigger role in Indiana.
• Indianas largest 302 companies
• Employed 58 of the states non-farm wage
  earners.
• Produced 72 of the states manufactured goods.

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The Renaissance of Entrepreneurship in Indiana

• Who were these large companies?
• Eli Lilly Company - Indianapolis
• Ball Brothers Muncie
• Standard Oil Whiting
• Inland Steel East Chicago
• United States State Works Gary
• American Can Company throughout Indiana
• International Harvester Indianapolis and Fort
  Wayne
• American Car and Foundry

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The Renaissance of Entrepreneurship in Indiana

• By the start of the 20th Century, Indiana was
  starting to sow the seeds of its future economic
  problems.

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The Renaissance of Entrepreneurship in Indiana

• What were those seeds
• Too many jobs were starting to be concentrated
  into fewer companies.
• We were starting to lose the economic
  independence that Indianas pioneer entrepreneurs
  craved.
• Control of Indiana companies was moving to
  Chicago, New York, Detroit, Cleveland

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The Renaissance of Entrepreneurship in Indiana

• What were the pros and cons of this movement?

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The Renaissance of Entrepreneurship in Indiana

• Pros
• Many new high paying jobs were created.
• Workers were receiving some of the best benefits
  in the nation.
• Better working conditions.
• Better worker safety.

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The Renaissance of Entrepreneurship in Indiana

• Cons
• People were not willing to take the time to get
  more education when they were making great money
  at the factories.
• Other states saw large increases in their
  residents going to college or to an advanced
  trade school.
• Hoosiers were no longer willing to take
  entrepreneurial risks when they could work at the
  large companies.
• Innovation occurred out of Indiana, and the
  manufacturing occurred in Indiana.

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The Renaissance of Entrepreneurship in Indiana

• Good Jobs
• Good Wages
• Good Benefits
• Safe Working Conditions
• You might ask how can this be a problem?

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The Renaissance of Entrepreneurship in Indiana

• Over the past 75 years, Indiana has become overly
  dependent on manufacturing jobs.
• During the past 25-30 years, the majority of the
  US has been moving to high knowledge jobs.

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The Renaissance of Entrepreneurship in Indiana

• What has this caused
• Hoosier workers income has fallen to 91 of the
  rest of the US.
• Indiana suffers one of the worst losses of
  college graduates in the US.
• Indiana suffers one the worst losses of
  manufacturing jobs in the US.

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The Renaissance of Entrepreneurship in Indiana

• 4 Indiana has lost 159,000 high paying jobs in
  the last three (3) years
• 5 Brain Drain 66 of Indianas engineering
  college graduates leave Indiana to find good jobs
• 6 Indiana ranks poorly at retaining its youth
• Indiana ranks 44th of 50 states and Washington
  D.C.
• 7 Indiana has a false reputation of
• Unwilling to change
• A very low tech state
• Hoosiers are very risk adverse

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The Renaissance of Entrepreneurship in Indiana

• Does it have to stay like this?
• NO!!!!!!

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The Renaissance of Entrepreneurship in Indiana

• As we look to the future
• How do we compare to other states?
• How do we stack up with the best?
• Lets take a look at Indiana vs. Silicon Valley

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Silicon Valley vs. Indiana
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The Renaissance of Entrepreneurship in Indiana

• Does Indiana have what it takes to compete with
  the Silicon Valley, Mexico, China?

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The Renaissance of Entrepreneurship in Indiana

• What are the ingredients for Indianas future
  success?
• Knowledgeable workforce
• Strong university system
• Quality of life
• New pro-business attitude
• Better access to capital
• Sharing of our experiences
• Willingness to mentor

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The Renaissance of Entrepreneurship in Indiana

• Knowledgeable Workforce
• Indiana is home to some of the most sophisticated
  manufacturing in the world
• Warsaw
• Crane Naval Depot
• Steel Mills
• Pharmaceuticals
• These workers are highly trained and skilled.
• We must, and are starting to, train these workers
  for tomorrows jobs rather then yesterdays jobs.

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The Renaissance of Entrepreneurship in Indiana

• Strong University System
• Indianas schools are world class
• Some of the best faculty in the world.
• New and committed leadership.
• Some of the most advanced and leading edge
  research being conducted at Indianas
  universities.
• Leaders in entrepreneurship, math, science,
  genomics, informatics, aviation.

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The Renaissance of Entrepreneurship in Indiana

• Great Quality of Life
• Beautiful mountains and beaches?
• Cost of living
• Strong values
• Safe
• Strong work ethic
• Easy to get about anywhere
• Friendly people

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The Renaissance of Entrepreneurship in Indiana

• New Pro-Business Attitude
• Our Government seems to have awakened
• Increased funding for the 21st Century Fund -
  75,000,000 in new funds.
• Inventory Tax is vanishing.
• Gross Income Tax repealed.
• R D Tax Credit
• Life sciences efforts Bio Crossroads.
• Fund of Funds - 73,000,000 in new seed capital
  for Indiana.

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The Renaissance of Entrepreneurship in Indiana

• Better Access to Capital
• We have more venture capital than ever, and it is
  steadily growing.
• We are seeing an increased interest in seed
  capital in Indiana.
• More angel investments are taking place.

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The Renaissance of Entrepreneurship in Indiana

• Sharing Our Experiences
• More older workers are sharing their experiences
  with today's younger workforce. They are not
  having to learn from trial and error.
• Since more workers are retiring earlier, we are
  seeing a corps of highly knowledgeable,
  experienced executives who are willing to get
  involved in new ventures.

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The Renaissance of Entrepreneurship in Indiana

• Willingness to Mentor New Companies
• More existing business owners are showing a
  willingness to mentor students and new business
  owners through the mine fields of venture
  creation.

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The Renaissance of Entrepreneurship in Indiana

• A Key Quote
• A smart man learns from his own experiences, a
  wise man learns from someone elses.
• We must develop a lot more wise people in
  Indiana!!!!

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The Renaissance of Entrepreneurship in Indiana

• Several examples of what is going on in Indiana
• New computer software development.
• New electric motor for highbred cars.
• New medical technology that detects disease
  faster and more accurately.
• A new messaging technology.
• New technology for the trucking industry.

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The Renaissance of Entrepreneurship in Indiana

• Indiana must embrace the entrepreneurial economy
  of the future if we are not only going to
  survive, but to thrive.

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New Paradigm For Indiana

• Smart People
• Smart Ideas
• Patient Capital
• High Quality Growth

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Smart People Smart Ideas Patient Capital
High Quality Growth
Smart Ideas
Smart People

• Universities
• Faculty
• New Grads

University Research
Experienced Grads

• Mentors
• In State
• Outside

Corporate Spin-offs
Entrepreneurs
Indiana Venture Center
Patient Capital
Seed
Angels
VC
Corp. Investors
RD Grants
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How Is the Indiana Venture Center Helping?

• Helping to create new high growth companies
• Helping to accelerate growth of existing high
  growth companies in Indiana
• Helping to create job opportunities for high
  knowledge workers to retain them in Indiana
• Helping to create opportunities that will
  encourage Indiana graduates to return to Indiana

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How Is the Indiana Venture Center Helping?

• Helping the universities within Indiana to
  develop a collaborative alliance that will
  foster
• Cross-pollination of ideas best practices
• More technology development and commercialization
• Sharing of ideas between universities faculties
  and students

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What Is the Indiana Venture Center Doing?

• Business plan review and assistance
• Technology review and validation
• Business strategy review
• Management review
• Funding
• Angel
• Pre-seed
• Seed
• Venture capital
• Bank

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Financing Continuum
IPOs
Private Placements
5M up
Banks m Govt Programs
500K up
Venture Capital
Seed Capital
5K up
2-50M
Angels
500K-3M
Family Friends
250K-1M
Owners Money
100-250K
50-100K
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What Is the Indiana Venture Center Doing?

• Internships
• Keep students in Indiana
• Introduce them to new opportunities within
  Indiana
• Develop programs to lure graduates back to
  Indiana
• Assist large Indiana companies with internal
  and/or external transfer of technology

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The Renaissance of Entrepreneurship in Indiana

• What is in it for us
• Higher quality workforce.
• Move from back workers to brain workers.
• Move from looking out of the rearview mirror at
  the past to looking out of the windshield to the
  future.
• Provide Hoosiers with unsurpassed quality of
  life.
• Develop a culture that encourages lifelong
  education and improvement.

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The Renaissance of Entrepreneurship in Indiana

• What Can You Do to Make Indiana Better?
• Encourage todays workers to reinvest in
  themselves.
• If you are a business owner or manager, sponsor
  an intern from one of Indianas schools.
• Work with a local university to keep students in
  Indiana.
• Hire local people we have some of the best
  talent in the US.
• Do not accept mediocrity.
• Make sure your legislator knows you want a better
  future for Indiana.

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The Renaissance of Entrepreneurship in Indiana

• The Renaissance will only happen if we all are
  willing to spent the time to make it happen.
• Are you willing to help create a new future for
  Indiana?

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Thank You