In September I wrote about The Recipe for a Healthy Startup Ecosystem. Providing early-stage capital to our startups is one of those ingredients. The Mill does this through the Flywheel Fund, which invests in technology startups across Indiana.
What exactly is Flywheel Fund? Flywheel is a member-managed investment fund that provides Hoosier’s emerging 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 fund pool. Each cohort or “round” of investors lasts until all funds are distributed (usually a year).
The Mill and our partners screen startups for potential investments and distribute due diligence: a report containing founders’ CVs, market analysis, financial forecasts, etc. Our members then meet once a month. The first half of the meeting is the pitch. The founder introduces the company and the investors ask questions about the use of 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 discontinues Zoom, and the investors privately discuss the company. They openly 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 aspire to be the first fully AI-driven influencer marketing content design studio. Think of it as “cameo meets canva”. The founding team consists of Sixty8 Capital co-founder Paul Ehlinger and Bloomington resident Derek Whitley, who is senior AI engineer at MetroStar. Flywheel will be the final commitment to the oversubscribed $2 million pre-seed round. In other words, Flamel.ai has raised more than originally planned due to high investor interest, and we feel fortunate to have gotten a foot in the door at the last minute.
This investment follows October in which Flywheel invested in four startups.
Solesca is a Software-as-a-Service (SaaS) platform that supports solar developers in the development of 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 at Solesca. They work daily from The Mill and recently completed Mill Cohorts, our pre-accelerator (imagine: a class where the project is your startup).
We have also committed to investing in Modicus Prime. The company offers AI and machine learning solutions that automatically monitor and triage life science data to detect anomalies and improve human decision-making. They bring self-service AI to life sciences. Taylor Chartier, Founder and CEO, recently guided 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-stage deal with multinational pharmaceutical company Takeda, which will generate sales of US$2 million.
Also in October, The Mill hosted Crossroads, our nationwide pitch competition. Flywheel invests in the winners of two tracks for pre-seed and seed companies, receiving $10,000 and $20,000 respectively. Both of this year’s winners are MedTech devices that improve people’s lives. It’s great to see Indiana producing valuable startups like this one. We are pleased to have included them in our portfolio:
- heARsight ($10,000 investment) is developing eyewear for the hard of hearing and deaf that displays closed captions for auditory input in real time.
- Wave Therapeutics ($20,000 investment) delivers a unique, affordable, patent-pending therapeutic technology that can help prevent pressure injuries.
To put the Flywheel Fund’s growth in perspective, we’ve invested more across our entire 2020 seed fund in the 60 days since my last article was published. That shows not only how much activity there is in Indiana and Bloomington — where almost half of us are investing — but also how excited our own investors are. Since the fund’s inception, we have consistently raised more capital and attracted more investors with each round. 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 these funds in innovative startups with the potential to not only create great jobs for Indiana, but even change the world.
We are proud that Flywheel’s model and track record have earned the trust of a growing number of investors. We will continue to invest in early-stage tech startups across Indiana, keeping our thumb on the scale for Bloomington startups.
To learn more about Flywheel Fund, visit https://www.flywheelfund.vc/.
This article and its description of the Flywheel Fund is not a public solicitation of investment.
Pat East is Executive Director of The Mill, a nonprofit entrepreneurship hub with a mission to create and accelerate startups and eventually become Indiana’s gravitational hub for entrepreneurship.