Oct. 25--Indiana Secretary of Commerce Mitch Roob and some of his staffers at the Indiana Economic Development Corp. have special business cards for out-of-state-trips.

The front of the card is printed with the usual name, title and contact information. But on the back of the card appears a map of the United States. Indiana is in gold, and every other state is blue.

It's a simple geography lesson.

Roob, who leads the IEDC's efforts to attract jobs and money to Indiana, told about talking with a venture capitalist in New York. "It's one of those 'I' states?" the investor said, asking Roob where he was from.

Indiana? Illinois? Iowa?

The New York venture capitalist was either stupid or condescending (perhaps both). The remark, though, does illustrate the attitudes that Indiana's investors and entrepreneurs still run into.

It's also a reminder that the state is still a relatively small, if growing, player in attracting the venture capital investments needed to create a lasting high-tech and biotech economy.

Indiana, though, is making great progress in producing startups able to attract big VC bucks.

Through the first nine months of 2009, Indiana startups have landed $128.18 million in funding, according to the MoneyTree Report released last week by PricewaterhouseCoopers and the National Venture Capital Association.

Indiana topped those other "I" states: Illinois had $115.4 million and Iowa $68.3 million over the same time. Indiana also beat out many of its Midwestern peers, including Michigan ($81.84 million), Ohio ($58.7 million), Missouri ($14.3 million) and Wisconsin ($13.87 million), according to the report.

It should be noted that Indiana's performance was beefed up by one huge deal -- $70 million to Indianapolis-based e-mail marketer ExactTarget in the second quarter.

But even in the next reporting period, the third quarter, Indiana attracted $31.58 million in funding to rank 17th among U.S. states and Washington, D.C.

It's also interesting to see which Indiana companies received that funding.

Five of the seven companies in the MoneyTree Report are in health care: Dormir (sleep-diagnostic services), Achieve CCA (debt-payment service for medical bills), Edocyte (biotech drug developer), NICO (device for removing brain and spine tumors) and EndGenitor (adult-stem cells).

Tech startups ExactTarget and Carmel-based search engine ChaCha were the other two companies receiving funding.

Central Indiana -- home to Eli Lilly & Co., the Indiana University School of Medicine and Purdue University engineering -- is well positioned to spawn medical companies. But biotech and device startups also typically require significant funding to get new treatments approved by regulators. It's much quicker to launch a software product.

Matthew Neff, chief executive of Indianapolis-based Clarian Health Ventures, said the downturn has required his firm to spend more time with its portfolio companies to provide advice and resources. Neff added that the firm has committed less than half of its $25 million fund. "We still have capital to invest," he said.

That's good news, especially during a downturn, for this "I" state.

Watch for "Biz Buzz" on IndyStar.com each Wednesday to see top Central Indiana business and economic leaders answer questions from Lee.

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