FUELING INNOVATION: HOW FLYWHEEL FUND IS BOOSTING BLOOMINGTON'S STARTUP ECOSYSTEM

Crossposted from the Herald-Times, this is The Mill’s regular column, written by Pat East, Executive Director. 

Flywheel is a member managed fund that provides individuals an opportunity to dip their toes into angel and venture investing.  For a relatively low buy-in, Flywheel provides members with a diversified portfolio of local and regional startups.  Through the monthly process of reviewing and voting on potential investments, members learn through doing,while being guided by other members and the Flywheel team.

The Mill launched Flywheel Fund in 2020, and since then they’ve invested over $3 million into over 50 portfolio companies from a range of industry verticals such as EdTech, AI/ML, HR Tech, SaaS, Cybersecurity, AgTech, HealthTech, etc.

Flywheel is currently raising and investing out of its fifth fund.  The first investment from Fund V was in Bereave, which provides an all-in-one after-loss platform for the bereaved while equipping employers with the proper leadership training and policies to ensure a smooth, supported return to the workplace after a loss.

The second investment was in Habits, a personal finance hub and marketplace that helps 25-40-year-olds source and connect with financial advisors while also allowing financial advisors to reach new audiences and acquire new clients.

Not only can angel investing provide a financial return to investors, but it can significantly benefit the local entrepreneurial ecosystem in several ways:

1. Funding for Early-Stage Startups: Angel investors provide crucial capital to startups that may not yet be ready for traditional venture capital or bank loans. This early funding can help startups develop their products, enter the market, and grow.
2. Mentorship and Expertise: Many angel investors bring valuable experience, industry knowledge, and connections. Their guidance can help entrepreneurs navigate challenges, avoid common pitfalls, and scale their businesses more effectively.
3. Economic Growth: By investing in local startups, angel investors can stimulate job creation and economic development within the community. Successful startups can lead to new business opportunities, increased tax revenues, and a more vibrant local economy.
4. Encouraging Innovation: Angel investors often support novel ideas and technologies that might be considered too risky by traditional investors. This support can foster innovation and lead to breakthroughs that benefit the entire industry and community.
5. Building a Supportive Network: Angel investing helps create a network of investors, entrepreneurs, and advisors. This network can enhance collaboration, share resources, and build a stronger entrepreneurial ecosystem.
6. Attracting Further Investment: A thriving local investment scene can attract additional venture capital and institutional investors. When a region demonstrates a successful track record of nurturing startups, it becomes more attractive to other investors and funds.
7. Community Engagement: Angel investors often have a vested interest in their local communities. Their involvement can lead to more community-focused startups and solutions that address local issues and needs.
8. Role Modeling and Inspiration: Successful local angel investors can serve as role models for other potential investors and entrepreneurs. Their success stories can inspire others to get involved, creating a positive feedback loop within the ecosystem.

Overall, angel investing can play a pivotal role in strengthening and growing a local entrepreneurial ecosystem by providing capital, expertise, and support that drive innovation and economic progress.

In addition to direct investments, Flywheel also supports several Mill programs by investing directly in participants.  Most recently, Flywheel made six small investments into participants of Startup Summer, a program that pays college students to build their business ideas in Bloomington throughout the summer. 

To learn more about Flywheel Fund visit https://www.flywheelfund.vc/ or contact Eric Steele at eric@flywheelfund.vc

*This article and its description of Flywheel Fund is not a public solicitation for investment.

Pat East is the Executive Director of The Mill, a non-profit entrepreneurship center on a mission to build and nurture Bloomington’s startup ecosystem. Our vision is to become the center of tech entrepreneurship in Indiana.