By ELIZABETH BEILMAN
A company aimed at developing Indiana businesses that has raised some eyebrows in the past is expanding to Clark and Floyd counties.
Elevate Ventures, a non-profit organization that helps local start-ups succeed, will place about two or three representatives in Velocity Indiana offices in Jeffersonville, said spokesperson Felicia Allen of Velocity, which made the announcement this week.
“It’s sort of a wait and see, but we’re definitely open and excited,” Allen said of the exact number of Elevate employees that will work in Southern Indiana. One of these entrepreneurs has already located in the area and has started work for Elevate.
The organization manages more than $80 million in state and federal investment funds and is expanding its locations to nine counties total.
“By enabling these developing companies to grow and position themselves to seek outside investment capital, we are helping to create Indiana jobs,” David Clark, Venture Partner at Elevate Ventures, said in a news release.
The KPMG, a national auditing entity, released a report in November claiming that Elevate Ventures “is substantially compliant with its investment and operational requirements” after Indiana Gov. Mike Pence ordered a review to investigate Elevate’s business practices.
This independent review requested in July was triggered by the company investing taxpayer money into businesses run by the organization’s chairman, Howard Bates, and his son. A federal fund run by Elevate granted Bates’ company, Smarter Remarketer, with $500,000 and his son Justin Bates’ company MaxTradeIn with $300,000. Both are CEOs of their companies.
Elevate released a letter defending its practices when the governor ordered the review, claiming that Bates “was recruited by the state to help set up Elevate Ventures, because he is one of Indiana’s leading entrepreneurs,” as reported by the Indianapolis Star.
Allen said she wasn’t completely informed on the issue but said Velocity doesn’t view the incident as a conflict.
“It’s certainly something that we’d be aware of but nothing that has given us concern now that it’s been resolved in a favorable way,” Allen said.
KPMG made 25 recommendations to Elevate Ventures in its report, including establishing an executive committee of the board to evenly distribute power.
Elevate provides support and tools for start-up and existing businesses through its local entrepreneurs-in-residence and has helped earn more than $154 million in economic impact since its founding in 2011.
“While most venture capital groups look strictly at financial return-on-investment, Elevate looks at the potential for growth in Indiana’s economy,” Dan Owen, EIR for Elevate Ventures in south central Indiana, said in a news release.