Michigan Investments Benefit East Coast’s Flagship Ventures

Cambridge, Massachusetts based Flagship Ventures manages over $900 million in capital. The firm is comprised of two units: VentureLabs creates innovative startups, and Venture Capital serves as the finance arm. Flagship invests in medical technologies, therapeutics and sustainability.

Mike Johnson, an associate of Flagship’s Ann Arbor location, focuses on healthcare and sustainability investments in the Midwest. He notes that Flagship came to Michigan for a number of reasons, one being its most successful advancement, Accuri Cytometers, which was acquired by BD in 2011. The firm was also attracted by Michigan’s academic and research base, university system, experienced entrepreneurs, investment community and state support programs. “Michigan offers capital efficiencies that are superior to the East Coast,” said Johnson. “We have received money from the Venture Michigan Fund II and Renaissance Venture Capital Fund in the past.”

In addition to Accuri Cytometers, Flagship’s main Michigan investment is Tangent Medical Technologies, Inc. Tangent, a company spun out from the University of Michigan Medical Innovation Center, “is another great example of great technologies that are coming out of the University systems,” said Johnson. “For me, to see the external validation I have from my colleagues in the Cambridge, Massachusetts office is great. People are excited about the relationships and business we can create in Michigan.”

Johnson has attended the Michigan Growth Capital Symposium multiple times. “It’s a great showcase for local companies and attracts a wide range of entrepreneurs and investors,” he said. Last year, Flagship’s CEO addressed the Symposium. “People still talk about his speech,” said Johnson.

State Funds Attracting Major Players to Michigan

Although fundraising is a constant challenge, things have been looking up in Michigan in the past five years, according to Credit Suisse Customized Fund Investment Group (CFIG) Vice-President Sean O’Donnell. Venture capital firms and assets under management have increased, resources such as the Venture Michigan Fund II (VMF II) are infusing more capital into Michigan companies, and the state is attracting some major players. A recent $15 million investment by VMF II has wooed Massachusetts-based Flagship Ventures to open an office in Michigan by the end of the year – a major win for the state. Flagship Ventures, a $900 million fund,  is known in Michigan for its success with University of Michigan spin-off company Accuri Cytometers.

CFIG manages or co-manages over $500 million in capital. VMF II falls under the group’s umbrella, along with other programs investing in VC, private equity funds, and growing companies in Michigan. As a founding member of the Michigan Venture Capital Association, CFIG has committed over $200 million to VC firms in the state since 2006, with another $80 million scheduled to be committed through 2013.

O’Donnell notes that innovation is what drive new technologies and industries, providing vital support to the state’s economy. “In the early stages, these new industries employ very highly skilled and educated workers,” he said. “In the long run, emerging companies in new industries assist in diversifying the Michigan economy and retaining and attracting human talent to Michigan.”

Credit Suisse has a longstanding relationship with the Michigan Growth Capital Symposium (MGCS), and is a sponsor of this year’s event. “CFIG is a strong supporter of the Michigan venture community, and has sponsored and attended hundreds of events in the state,” said O’Donnell. “I view the MGCS as the premier event in Michigan to bring together entrepreneurs, venture capitalists, limited partners and intermediaries. The event’s reach is by far the most comprehensive, attracting firms from the coasts who are not regular attendees at the numerous other Michigan events.”

Michigan Growth Capital Symposium Unveils Flagship Ventures’ Noubar Afeyan as Keynote Speaker

University of Michigan President Mary Sue Coleman and Foundry Group’s Jason Mendelson also Part of the Program for the Midwest’s Leading Venture Capital Event

Today, organizers of the Michigan Growth Capital Symposium announced that Noubar Afeyan, founder, managing partner and CEO of leading early stage venture capital firm Flagship Ventures, will deliver the keynote address to begin the second day of the 31st annual event.  University of Michigan President Mary Sue Coleman will provide opening remarks to introduce Dr. Afeyan and also share her thoughts on how the University’s commitment to research and development and entrepreneurship is helping to deliver on the promise of Michigan as a hotbed of innovation and investment activity.

Flagship Ventures is an active member of the greater Michigan venture capital community, and recently unveiled plans to establish a presence in the state by mid-2012. This comes on the heels of Venture Michigan Fund II, a fund-of-funds which is managed by Credit Suisse, making a $15 million investment commitment in Flagship Ventures Fund IV, which invests in early-stage companies.   Flagship  has recently invested in Tangent Medical, an innovator in IV therapy products, and had a successful exit with Accuri Cytometers, a University of Michigan spinout that makes scientific instruments and was bought by New Jersey medical device giant Becton, Dickinson and Company in 2011 for $205 million.

“Michigan is on the track to success and we’re excited to be a part of that,” said Afeyan. “Accuri is a prime example of how the talent, university research, entrepreneurial community, pubic support and growing investor base has converged to generate real success. The next Accuri may very well be at the Symposium.”

Afeyan has nearly a quarter century of experience as an inventor, entrepreneur, CEO and venture capitalist and currently leads Flagship Ventures’ VentureLabs unit that invests and launches transformative startups. Afeyan has authored numerous scientific publications and patents since earning his Ph.D. in Biochemical Engineering from MIT in 1987 and currently lectures widely in the United States and internationally on diverse topics ranging from entrepreneurship, innovation and venture capital to biological engineering, drug discovery, medical technologies and renewable energy. He also serves on a number of public and private company boards including Affinnova, BIND Biosciences, BG Medicine, Breathable Foods, Eleven Biotherapeutics, Essentient, Joule Unlimited, LS9 and moderna therapeutics.

In addition to Afeyan’s address on Wednesday morning, Foundry Group’s Jason Mendelson will deliver a keynote to open the event on Tuesday. Mendelson’s information technology background complements Afreyen’s medical and biotech expertise, and together they will provide Symposium attendees with a diverse level of insight into the trends shaping key industries in Michigan’s investment landscape. The program will also feature 32 presentations from companies seeking $500,000 to $20 million in funding and six panel presentations.

Presented by the University of Michigan Zell Lurie Institute‘s Center for Venture Capital & Private Equity Finance at the Ross School of Business with support from the Michigan Venture Capital Association, this year’s Symposium will be held May 15-16, 2012 at the Marriott Resort in Ypsilanti, Michigan.  To learn more or register to attend the Symposium, visit www.MichiganGCS.com.