Oscar Moralez, founder and managing director of VisionTech Partners I VisionTech Angels, believes the nation’s venture capital (VC) community is missing out on great opportunities in the Midwest based on some impressive statistics:
- 20 top-rated global research universities are located in Midwestern states – more than any other region.
- 26% or U.S. corporate and university patents originate here.
- 24% of National Institutes of Health-funded research is conducted in the Midwest.
- 33% of Fortune 500 companies are headquartered in America’s heartland.
- 33% of all U.S. STEM college grads are live and work here.
And yet, VCs routinely overlook the Midwest. Less than 5% of venture capital is invested in Midwest startups.
Not one to sit on the sidelines and accept the status quo, Moralez has launched Boomerang Ventures, a Midwest-focused, early growth stage venture capital fund headquartered in Indianapolis. Moralez will introduce Boomerang, which he describes as an investment fund by, for and with entrepreneurs, at VisionTech Angels’ Virtual Pitch Event on Thursday, April 30 starting at 6 pm on Zoom.
One of the main reasons for launching Boomerang is that while VCs routinely snub the Midwest, the region has the highest MOIC (multiple on invested capital) in the nation. “Our MOIC is 5.6x and that’s largely driven by three things: capital efficient companies, realistic valuations and faster profitability,” says Moralez. “There is far better value for investors in the Midwest than the Coasts and places like Austin where startups tend to have high valuations in relation to where they are.”
He adds, “I thought, if VCs don’t want to come to the Midwest, we should start our own fund. Enter Boomerang Ventures.”
The firm is currently raising its first fund with a target of $20 million. While VisionTech Angels’ investment sweet spot is $200,000-500,000 per deal, Boomerang will have the resources to invest $500,000 to $2 million in Series Seed and Series A deals. They may invest in some of the same deals and enhance each other’s deal flow. However, VisionTech Angels and Boomerang Ventures are completely separate entities.
“Boomerang Ventures has its own governance structure and is raising money from different people,” Moralez explains. “There’s also the fundamental difference in that Boomerang invests as a fund rather than as a group of individual investors, which is the angel model.
Still, the synergies between the groups will have a positive impact on Indiana’s and the Midwest’s startup ecosystem. VisionTech portfolio companies starting to scale will have a new funding source as Boomerang is positioned for larger follow-on rounds. Boomerang will also attract different investment opportunities, focusing on tech-enabled companies that thrive in the Midwest such as agriculture, life sciences, logistics, and manufacturing. When Boomerang companies do exit, the goal is to keep the proceeds in the Midwest.
“Boomerang has a very agrarian mindset; we want to plant seeds that grow successful companies,” Moralez says. “When a Midwest venture firm invests in Midwest companies, a very fertile environment for innovation and growth, we’ll all prosper.”
Make plans to join VisionTech Angels’ Virtual Pitch Event Thursday, April 30 starting at 6 pm and featuring investor pitches from two Indianapolis-based companies, MITO Materials and analytic.li. Oscar Moralez’ presentation on Boomerang Ventures will follow. The event, powered by Zoom, is open to VisionTech Angels members and accredited investors interested in joining the group. To register, please contact VisionTech Executive Director Ben Pidgeon at email@example.com