Midwest Venture Capital Is Booming & Thompson Hine Is at the Heart of It

Date: December 16, 2021

Don’t underestimate the booming Midwest venture capital market or Thompson Hine’s New Ventures group. The end of FY 2021 saw marked growth in venture capital funding in the Midwest, and the group was a key player on the legal side as it closed more than 100 transactions since June, averaging more than $14.2 million per transaction and totaling over $1.35 billion invested in startups. The firm’s New Ventures team was at the heart of it all, representing companies, corporate VCs, and investors.

Midwest Growth Amplified

Despite the continuing global pandemic, venture capital investment in the Midwest, particularly in Illinois and Ohio, saw tremendous growth over the past decade. Concerted efforts by state and local governments and public-private partnerships across the Midwest, like those of the Ohio Development Services Agency, Illinois Ventures, and Indiana Economic Development Corporation, increased startups’ access to venture capital dollars and other investments.

The Q3 2021 Venture Monitor, published by PitchBook and the National Venture Capital Association, notes that more than $7.7 billion of the venture dollars invested in the first nine months of the year were invested in Illinois and Ohio, representing over 3.2% of the total nationwide venture capital investment. Although the Bay Area continues to receive a majority of the funding, areas often classified as “nontraditional” saw upticks in sums of capital deployed, numbers of deals, and percentages of the venture market these
regions comprise.

Thompson Hine represented either the investor or the startup in more than 17% of these transactions by dollar volume, and Jonathon Vinocur, chair of the New Ventures group says, “We see no signs of our involvement in these transactions slowing given the number of transactions we already have slated to close in the first quarter of 2022.”

Immense Deal and Transactional Volume

Starting in June, the New Ventures group internally tracked the data associated with transactions for all startup investments in which it represented at least one party, monitoring the number of transactions, gross dollar volume of each transaction, and average gross transaction value.

According to Lindsay Karas Stencel, a partner in the group and chair of the Fund Formation practice, “Tracking data like this is significant for several reasons. First, it allows us to see the magnitude of the volume of transactions processed. We knew we had a hand in most transactions in the Midwest, but tracking the data allowed us to confirm that. Second, it helped us to see the immense volume of transaction value that we have represented in our practice group. It certainly makes us proud to know that while states like Illinois and Ohio are seeing record gross transactional volume, we’ve had a hand in many of those transactions, and based on our pipeline, we don’t expect it to slow anytime soon.”

Between June and November, the New Ventures group closed more than 100 separate transactions and represented companies in 38 states. The average gross transaction size of a round in which Thompson Hine represented either the startup or one or more investors was over $14.2 million. “This was a great year for our group, with so many transactions and a few larger ones too, registering north of $100 million per round,” says Cleveland New Ventures partner Sean Ganley.

The gross dollars represented during the six-month period exceeded $1.35 billion, which will only increase with the traditional year-end flurry of deals. “We are excited to see the continued growth of transactions and dollars invested in the Midwest and certainly happy to be a trusted and instrumental part of so many of the deals that have happened,” says partner Layla Dotson Lumpkin of the firm’s Chicago office.

Distinguished Team Focused on VC

Thompson Hine’s involvement in such a large volume of transactions, both throughout the Midwest and beyond, contributed to the firm’s recently earning a national first-tier ranking in Venture Capital Law in the U.S. News – Best Lawyers® 2022 “Best Law Firms” rankings, with Vinocur and Stencel also garnering national recognition.

The New Ventures group is acutely focused on representing startups and venture capital investors across the country. Its diverse team of seasoned attorneys is intimately familiar with all facets of the venture transaction and understands every step of the funding process, making the attorneys in the group a true asset to our clients.

The group represents high-growth companies of all sizes and stages in industries including technology, health care, life sciences, consumer products, nanomaterials, transportation, communication, medical devices, and more. Its attorneys guide clients through their growth and funding cycles, offering customized counsel on everything from day-to-day legal matters to funding to exits. For more information, visit THQuickLaunch.com.

© Thompson Hine LLP. This publication is intended to inform clients about legal matters of current interest. It is not intended as legal advice. Readers should not act upon the information contained in it without professional counsel. This document may be considered attorney advertising in some jurisdictions.