Key Takeaways
- • Central Indiana venture investment averaged about $81 million per quarter from 2016 through 2024, but has fallen to about $51 million per quarter over the past two years, and hit a 10-year low in Q3 2026, according to IBJ reporting.
- • Investors are concentrating capital nationally in AI and in a handful of East and West Coast locations, leaving Midwest startups facing a higher bar, particularly software companies.
- • Indiana's state venture policy shifted sharply: the Next Level Fund, seeded with $250 million from the 2006 Indiana Toll Road lease, had its venture investments paused in December 2025 and later ended.
- • Elevate Ventures is resuming fundraising for a planned $150 million Growth Fund, including $25 million from state returns on past investments, aimed at later-stage companies.
- • Industry leaders see hard-tech (robotics, advanced manufacturing) as a growth avenue for Indiana, with Elevate CEO Christopher Day suggesting the Growth Fund's mix could flip from 60% software to hard tech.
Summary
Venture funding in Indiana is tightening, according to founders and ecosystem leaders interviewed by the Indianapolis Business Journal. Central Indiana venture investment averaged about $81 million per quarter from 2016 through 2024 and has averaged about $51 million over the past two years. In the third quarter of 2026, venture investment in the region fell to a 10-year low, IBJ has reported. The region typically accounts for most of the state's venture capital activity.
Experts told IBJ that the problem is not a shortage of capital nationally. Rather, investment has concentrated in artificial intelligence and in a few coastal locations. Kristian Andersen, co-founder and partner at Indianapolis-based High Alpha, said AI has lowered the cost of starting a company, but startups are now measured against the large returns AI companies are expected to produce, a standard most early-stage companies cannot meet. TechPoint CEO Eric Christopher described a "three-knockout punch": the pandemic, higher interest rates that drew capital toward safer investments, and the rise of AI, which has made software-as-a-service appear legacy.
Local exits have also been limited. ExactTarget, an Indianapolis software company that went public in 2012 raising $161.5 million and was acquired by Salesforce in 2013 for $2.5 billion, remains a reference point for the wealth it created. Megan Glover, chair of the Indiana Technology and Innovation Association's Capital Committee, said without comparable exits, "your capital is literally locked in your existing portfolio." Founders report investors demanding proven revenue and product-market fit; Primary Record, a Fishers company, raised $91,000 after seeking $50,000 in a round that previously raised $1 million in 2023.
State policy has added uncertainty. Gov. Mike Braun's administration investigated Elevate Ventures in 2025, freezing or slowing its state funding and investments. In December 2025, the administration paused venture investments from the Next Level Fund and later ended them, redirecting the money toward faster-return investments with proceeds going to the Indiana Department of Transportation for road projects. Elevate has resumed fundraising for an expected $150 million Growth Fund for later-stage companies, which will include $25 million from state returns plus private capital. Glover said the state and the tech industry are aligning more on attracting outside capital.
Looking ahead, TechPoint's Christopher said companies applying AI to specific problems previously addressed by software are best positioned, and that investors favor AI-native firms. Matthew Wallace, CEO of Carmel-based Onow Ascent, said investors want demonstrated customers and that AI reduced his company's burn, extending expected runway from 7 to 16 months. Elevate CEO Christopher Day said Indiana's manufacturing base could support growth in hard tech, and that the Growth Fund could shift from its historical 60% software and 40% hard-tech split toward hard tech.
Experts told IBJ that the problem is not a shortage of capital nationally. Rather, investment has concentrated in artificial intelligence and in a few coastal locations. Kristian Andersen, co-founder and partner at Indianapolis-based High Alpha, said AI has lowered the cost of starting a company, but startups are now measured against the large returns AI companies are expected to produce, a standard most early-stage companies cannot meet. TechPoint CEO Eric Christopher described a "three-knockout punch": the pandemic, higher interest rates that drew capital toward safer investments, and the rise of AI, which has made software-as-a-service appear legacy.
Local exits have also been limited. ExactTarget, an Indianapolis software company that went public in 2012 raising $161.5 million and was acquired by Salesforce in 2013 for $2.5 billion, remains a reference point for the wealth it created. Megan Glover, chair of the Indiana Technology and Innovation Association's Capital Committee, said without comparable exits, "your capital is literally locked in your existing portfolio." Founders report investors demanding proven revenue and product-market fit; Primary Record, a Fishers company, raised $91,000 after seeking $50,000 in a round that previously raised $1 million in 2023.
State policy has added uncertainty. Gov. Mike Braun's administration investigated Elevate Ventures in 2025, freezing or slowing its state funding and investments. In December 2025, the administration paused venture investments from the Next Level Fund and later ended them, redirecting the money toward faster-return investments with proceeds going to the Indiana Department of Transportation for road projects. Elevate has resumed fundraising for an expected $150 million Growth Fund for later-stage companies, which will include $25 million from state returns plus private capital. Glover said the state and the tech industry are aligning more on attracting outside capital.
Looking ahead, TechPoint's Christopher said companies applying AI to specific problems previously addressed by software are best positioned, and that investors favor AI-native firms. Matthew Wallace, CEO of Carmel-based Onow Ascent, said investors want demonstrated customers and that AI reduced his company's burn, extending expected runway from 7 to 16 months. Elevate CEO Christopher Day said Indiana's manufacturing base could support growth in hard tech, and that the Growth Fund could shift from its historical 60% software and 40% hard-tech split toward hard tech.
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