Allos Ventures Finds Unique Value in Early Stage Investment

Shannon Beeman
April 16, 2012

Over the past twelve years, Indianapolis-based Allos Ventures has found success targeting early stage technology companies. The firm’s portfolio includes a diverse array of businesses, including AssureRx Health, BidPal Network, Scale Computing and WebLink. Managing Director John McIlwraith said early-stage technology companies have proven to be a good bet for Allos. “We believe the early stage sector is greatly underserved due to the shortage of early stage venture capital in the region, and the growing number of angel-backed and other companies approaching the stage at which they will seek to raise their first round of institutional venture capital,” he said.

The firm’s second fund, Allos II, will invest in ten to twelve companies, and will follow the four guideposts of its first fund: providing hands-on leadership and company-building support; investment in first institutional VC rounds of companies with early revenue; focus in high-growth sectors intersecting with the principals’ experience (including software, advanced manufacturing/materials, and medical technology); and targeting companies within a four hour drive of either of its offices in Indianapolis and Cincinnati.Michigan– fromGrand RapidstoDetroit– is also an area of focus for Allos based on its level of company-building activity, and the firm’s successful investments in BlueGill Technologies, Sircon, and Health Care Solutions.

McIlwraith, a founding member of the Michigan Venture Capital Association Board of Directors, has been active inMichigansince 1997. He notes that early-stage companies provide value to theMidwest, through the potential for rapid growth, job creation, and an attractive rate of return for investors.  Additionally, they help develop a rich talent pool. “Successful early-stage companies will certainly create jobs in the region,” he said, “but they also will create the next generation of innovators and executives who will start companies and/or invest as angel investors in other start-ups in the region. These individuals will serve as mentors to the founders of future companies, and will help produce the kind of momentum that is critical to building a vibrant entrepreneurial ecosystem.”

Allos is a sponsor of this year’s Michigan Growth Capital Symposium, and has been involved since the event’s inception. Its principals have served as panelists, and regularly assist in evaluation of business plans for the selection process. “It is one of the best conferences of its type in the country, and is a valuable source of investment and networking opportunities,” said McIlwraith.