The Fallout From Aver Informatics’ Reported Move from WI to OH
[Updated 8/13/14, 12:35 p.m.] Aver Informatics’ reported move from Green Bay, WI, to Columbus, OH, could have financial and reputational ramifications for the healthtech startup.
Columbus Business First quoted CEO Kurt Brenkus saying that Aver had set up shop in late July in the office of its new high-profile investor, Columbus-based Drive Capital; hired five staff there; and intended to relocate its other 10 employees from Green Bay. The reported move came two months after Aver announced an $8.5 million Series A investment from GE Ventures and Drive, the new $250 million, Midwest-focused VC fund started by Sequoia Capital veterans Mark Kvamme and Chris Olsen.
If Aver closes its Wisconsin headquarters and relocates those employees by October, it will have to cough up $267,000 in penalties related to state tax credits, state officials told Xconomy. And Drive will have disappointed local angel investors by poaching the company.
The move is notable because Aver’s $8.5 million deal is the largest VC investment in a Wisconsin company reported so far this year. Local stakeholders probably hoped Aver would grow into an anchor healthtech company for Green Bay, or at least a key player in Wisconsin’s tech community. But perhaps the move shouldn’t be a surprise, considering startups have been known to move closer to their lead investors and Wisconsin has experienced its fair share of these losses in the past—although there’s hope that trend is on the decline.
Xconomy could not independently confirm Aver’s move because Brenkus and Drive officials haven’t returned messages seeking comment. However, it’s clear that Aver has at least opened a Columbus operation, according to online job postings and Drive’s address being listed on Aver’s website, as well as a different Columbus address listed on Brenkus’ LinkedIn profile. [This paragraph was updated to mention Drive’s address on Aver’s website.]
Tom Shannon, one of Aver’s angel investors who now leads the BrightStar Wisconsin Foundation that invests donations in startups, said he hasn’t heard from Brenkus confirming Aver’s plans. In previous discussions, Drive officials were “somewhat noncommittal” about Aver’s long-term plans for a location, said Shannon, who served as Aver’s board chair before the Series A deal.
“I did mention to them that that would really kill their deal flow if they started poaching companies, especially in light of those discussions taking place in my BrightStar Foundation office, where they clearly applauded and understood our objective of growing jobs in Wisconsin,” Shannon told Xconomy.
“These are very skilled people who can really help our state. We applaud them being here,” Shannon said of Drive. “If this [relocation] is a one-off, OK, but if it’s going to be a trend, a number of us will lobby for [their Wisconsin] deal flow to stop.”
Meanwhile, it’s unclear if Aver will have to refund state tax credits.
Wisconsin Economic Development Corp. spokesman Mark Maley said the company has not contacted his agency, which administers the state’s Qualified New Business Venture program that allows investors to claim a 25 percent tax credit on money pumped into early-stage companies.
Aver became eligible for the tax credits in October 2011, a year after it was founded. Before the Series A, it had raised $2.5 million over two angel funding rounds from investors including … Next Page »