Blue Chip Venture Co. in Indianapolis … That’s Allos, to you

When is Blue Chip Venture Co. not Blue Chip? When it’s Allos Ventures. Three principals […]

When is Blue Chip Venture Co. not Blue Chip? When it’s Allos Ventures.

Three principals from Blue Chip, the well-established early stage investing company in Cincinnati, opened for business as Allos Ventures in the Indianapolis area of Indiana about six weeks ago.

By then, managing directors Don Aquilano and John McIlwraith, and director Dov Rosenberg had raised about $20 million to invest in early stage “software and technology-enabled business services, but also specialty healthcare providers, medical devices and diagnostics, and advanced manufacturing,” according to the Allos Web site.

“We started fundraising for Blue Chip V in the spring of 2008,” Rosenberg said about Blue Chip’s fifth fund. About six months later, the world economy collapsed, sending fund investors into hiding.

Even after institutional investors started to come back toward the middle of 2009, they still were nervous about the economy, Rosenberg said. And they wanted to see more company exits from previous Blue Chip funds before they put more money in the firm’s latest fund.

“So we put Blue Chip fundraising on hold,” Rosenberg said.

“But there were a lot of investors, primarily in Indiana, but scattered around, as well who were eager to invest behind” Aquilano and McIlwraith, he said. So the three Blue Chip directors put the Blue Chip money they had raised into Allos I L.P., which is based in Carmel, Ind.

Some of the top technology entrepreneurs in the Indianapolis area have invested in Allos, which means “different” in Greek. That includes members of its advisory board: David Becker is chairman and CEO of First Internet Bank; Scott Dorsey co-founded ExactTarget; Mark Hill is a managing partner of Collina Ventures; Scott Jones is a serial inventor and entrepreneur who is chairman and CEO of ChaCha Search and Precise Path Robotics, and chairman and co-founder of Gracenote.

Jack Wyant, the managing partner who co-founded Blue Chip in 1992, also is an adviser.

The Allos directors expect to invest an initial $1.5 million to $2 million in up to eight companies with a reserve for follow-on investments in those companies, Rosenberg said. The Allos fund likely will last for three years instead of the usual five or six.

“The goal is to be the bridge between angel investors and the other investors in the region,” Rosenberg said.

That’s no different from the strategy behind Blue Chip investing done by Aquilano and McIlwraith. “They are hands-on investors,” Rosenberg said. “They partner with the entrepreneurs rather than just invest in them.”

But Allos will have a more narrow investment target. “We won’t do investments in any pharmaceutical or biotech companies, but we might do one device company,” Rosenberg said. Blue Chip funds have invested in many healthcare service, specialty provider and clinical-stage drug and device companies.

Two Blue Chip investments already have been rolled into Allos — WebLink International and Scale Computing, both in Indianapolis.

WebLink is a Web technology company that helps organizations such as chambers of commerce and convention and visitors bureaus promote their communities. It raised $3.5 million in June 2008 from investors that included Blue Chip. Scale, which develops and makes clustered storage solutions for mid-sized companies and organizations, raised $9 million from Blue Chip and others in March.

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