Crossposted from the Herald-Times, this is The Mill’s regular column, written by Pat East, Executive Director.
In September, I wrote about The Recipe for a Healthy Startup Ecosystem. Providing early-stage capital for our startups is one of those ingredients. The Mill does that through Flywheel Fund, which invests in technology startups throughout Indiana.
What is Flywheel Fund, exactly? Flywheel is a member-managed investment fund that provides up-and-coming Hoosier tech startups with the capital they need to scale quickly, create jobs, and grow our economy. Each year, SEC-qualified members join Flywheel and contribute to a pool of funds. Each cohort or “round” of investors lasts until all the funds are dispersed (usually one year).
The Mill and our partners screen startups for potential investment and distribute due diligence: a report that includes bios of the founders, market analysis, financial projections, and so on. Our members then meet once a month. The first half of the meeting is the “pitch.” The founder presents the company, and investors ask questions about how they’ll use the funds, their go-to-market strategy, their vision of the company, and so on.
The second half of the meeting is an executive session. The founder drops off Zoom, and the investors discuss the company privately. They candidly explore what they like, what they don’t like, and whether the company’s team can fix those things.
In November, Flywheel invested in Flamel.ai, a startup specializing in artificial intelligence (AI). They strive to be the first fully AI-driven design studio for influencer marketing content. Think of it as “Cameo meets Canva.” The founding team is comprised of Sixty8 Capital co-founder Paul Ehlinger and Bloomington-based Derek Whitley, who is a Principal AI Engineer at MetroStar. Flywheel will be the last investment commitment to their oversubscribed $2 million pre-seed round. In other words, Flamel.ai has raised more than they initially planned, due to high investor interest, and we feel fortunate to get our foot in the door at the last minute.
This investment comes on the heels of October, in which Flywheel invested in four startups.
Solesca is a software-as-a-service (SaaS) platform that helps solar developers design agrivoltaic systems. Co-founders Sam Schierloh and Brendan Devine have taken a leave of absence from their senior year of college to work full-time on Solesca. They work from The Mill daily and recently completed Mill Cohorts, our pre-accelerator (think: a class where the project is your startup).
We also committed to invest in Modicus Prime. The company offers AI and machine learning solutions that automatically monitor and sift through life sciences data to detect anomalies and enhance human decision making. They are bringing self-service AI to the life sciences. Taylor Chartier, Founder & CEO, recently took Modicus Prime through Techstars’ Industries of the Future Accelerator, which is one of the most competitive accelerator programs in the world. Modicus Prime has also signed a five-year, multi-tiered contract with multinational pharmaceutical company Takeda that will generate $2 million in revenue.
Also in October, The Mill held Crossroads, our statewide pitch competition. Flywheel invests in the winners of two tracks for pre-seed and seed companies, who receive $10,000 and $20,000 respectively. Both winners this year are MedTech devices that improve human lives. It’s great to see Indiana producing valuable startups like these. We’re excited to have them join our portfolio:
- heARsight ($10k investment) is creating glasses for Hard-of-Hearing and d/Deaf people that display subtitles for auditory inputs in real time.
- Wave Therapeutics ($20k investment) delivers unique, affordable, patent-pending therapeutic technology that can help prevent pressure injuries.
To put Flywheel Fund’s growth into perspective, we have invested more in the 60 days since my last article was published we did in our entire inaugural fund in 2020. That shows not only how much activity there is in Indiana and Bloomington—where nearly half our investments are—but also how excited our own investors are. Since launching the fund, with each round, we have consistently raised more capital and attracted more investors. For Fund 1, we raised $100,000 from 10 investors. For Fund 2, we raised $600,000 from 50 investors. And for Fund 3, the current fund, we raised $1.1 million from 60 investors. We then invest those funds into innovative startups with the potential to not only create great jobs for Indiana, but even to change the world.
We’re proud that Flywheel’s model and track record a have inspired confidence in a growing number of investors. We’ll continue investing in early-stage technology startups throughout Indiana, with our thumb on the scale for Bloomington startups.
This article and its description of Flywheel Fund is not a public solicitation for investment.