Michigan Venture Capital Association Offers Services to Support the State’s VC Community

The Michigan Venture Capital Association (MVCA) provides vital support to the state’s VC and angel investment communities. The organization has over 200 individual members representing over 70 private and corporate VC funds, angel investors, private equity firms and entrepreneurial infrastructure participants. “The MVCA has been very successful in the state of Michigan, probably the most successful organization of its type in the Midwest,” said MVCA Board Chair and Arboretum Ventures Managing Director Tim Petersen. “Our organization gives businesses from outside the state of Michigan access to other venture capitalists in the state, and organizes meetings for venture capitalists, law firms and accountants who are active in the state.”

The MVCA’s core service program, Venture Upstart, is funded by a Michigan Economic Development Corporation grant. It offers a suite of services to support Michigan’s VC community by assisting entrepreneurs, angel groups, venture capitalists and portfolio companies. One component, the Executive in Residence Program, offers experienced entrepreneurs the opportunity to join a venture firm. The CEO Placement Program works to increase the number and quality of venture-backed executives in the state. Venture Upstart’s MI Venture Fellows Program is supporting Michigan’s next generation of VC’s, and the Angel Network Growth Program supports the state’s established angel groups, helping to attract members and increase deal flow.
The missions of the MVCA and the Michigan Growth Capital Symposium (MGCS) are closely aligned. “The MVCA is more than proud to be a sponsor of the Symposium,” said Petersen. “Although the MGCS is not our event, it is tightly linked to what our organization is trying to do. We’re helping promote venture capitalists and our portfolio companies in the state of Michigan.”

While the VC industry has been struggling nationwide, the MVCA and MGCS are thriving in the state of Michigan. “There are many people who assist with both organizations. I don’t think it’s a surprise that they mutually benefit each other,” said Petersen. He notes that MGCS attendance has grown in the past decade, reflecting continual evolution of the event. “In the Midwest it’s really become one of those events where people put it on their calendar, because its going to be a very efficient couple of days seeing excellent companies and catching up with fellow investors.”

Xconomy Confident in Michigan Comeback

“The way I would sum it up as an outsider, the big feeling is that Detroit is back!” So says Boston-based Bob Buderi, founder, CEO and editor-in-chief of Xconomy, a news and event network covering business technology and innovation. With offices in Boston, San Francisco, New York, San Diego, and Seattle, Xconomy laid roots in Michigan with a Detroit office in 2010, attracted by efforts in the state to strengthen and diversify the economic base by growing technology industries. Buderi saw the work being done in Michigan as “incredibly important to the country.” And, he says, Xconomy has received a warm welcome here. “Nowhere else in the country have we been so welcomed. There is a spirit of openness and collaboration that we don’t see everywhere.”

Buderi shares some insights he’s gained through Xconomy’s experience in Detroit:

In the fall of 2010, not long after we opened in Detroit, I wrote an essay for the Kauffman Foundation about Michigan and why we went there. In it I said, “If Michigan were a stock, I’d buy a ton of options.” What I’d say now is, first, that my options would be incredibly more valuable than they were in the fall of 2010 when I ‘bought’ them. And second, I would keep buying.

I feel a much greater confidence from within Michigan about what is going on there. In Detroit, there is action and buzz around mobile, design, security, gaming, and a lot more. Finally, the Detroit startup and innovation scene is being noticed. Detroit is cool again. Everybody loves a comeback story, and the Michigan economy is one. The stories we write about Michigan are becoming increasingly popular in our other regions. That means people are taking notice, and are interested in what is happening.

Xconomy has shown strong support for the Michigan Growth Capital Symposium (MGCS), taking a sponsorship role. “Xconomy has enjoyed supporting, attending, and promoting the MGCS and its mission of helping to build the innovation economy in Michigan,” said Buderi. “As a new company coming into Michigan, the MGCS has provided a great opportunity for Xconomy to build its network. The level of content and ideas are very high, as the University of Michigan, the Michigan Venture Capital Association and other partners provide a great way for entrepreneurs to network and discuss how to grow their businesses.”

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.”

Premier Event Tops Sponsor’s Calendar

The Michigan Venture Capital Association (MVCA) is a longtime partner and major sponsor of the Michigan Growth Capital Symposium (MGCS), providing support and promoting attendance at the annual event. “I think it’s become sort of the premier event of the year on the schedule for people inside of Michigan and other areas of the country to get together and both network and have the opportunity to learn about some of the most exciting companies emerging from the state of Michigan,” said Tim Petersen, MVCA chairman and managing director of Arboretum Ventures.  “It’s one of the focal points for the MVCA every year. We’re proud sponsors, and we do a board meeting around the event. We co-host a reception the evening before for venture capitalists. So it’s a big event on the Michigan Venture Capital Association’s schedule as well.”

For the MVCA, the symposium provides an outstanding networking opportunity and the ability to showcase how much is going on inMichiganin the VC industry. Petersen believes the MGCS differentiates itself from other forums because of the quality of the presenting companies and the event’s longevity.

“I think the fact that it (MGCS) has existed for so long, and if you look at the attendance numbers and qualitatively, just sort of the enthusiasm and excitement around the event, it’s really grown a lot in the last ten years,” said Petersen. “And that’s during a period of time where nationally, venture capital has sort of fallen off a little bit. InMichigan, it’s particularly notable that this event has continued to grow and get bigger every year.”

Although the format of the MGCS has been copied in other places, Petersen says its creator —University of Michigan Ross School of Business Professor of Finance David J. Brophy — deserves the credit for coming up with the idea to have a forum that brings exciting, new companies into one location and enables investors to efficiently evaluate those companies. As an executive at Arboretum Ventures, Petersen says the MGCS is a natural place for the VC firm to look for new investments and showcase its companies. “For Arboretum, we certainly have evaluated companies for investment that we’ve seen at the Growth Capital Symposium, and companies that are already in our portfolio have presented to attract other investors to invest.”

Program Spotlight: Marcel Gani Internship Program

Through its robust portfolio of programs, the Zell Lurie Institute gives students at the Ross School of Business the chance to step outside of the classroom and take advantage of opportunities that enrich the MBA curriculum with real-world experience.

Among these is the summer Marcel Gani Internship Program, which places students at emerging research-based companies, start-ups or investment firms throughout the U.S.  Host companies benefit from the knowledge and expertise of an MBA student where interns play a crucial role in leading the company to the next stage in its business development.

Below are examples of how this year’s interns spent their summer.  To learn more about the program, please visit: http://www.zli.bus.umich.edu/events_programs/internships.asp

• Nic Wetzler, an intern at Primus Power, came to Ross with a strong interest in global warming and sustainability. At the Zell Lurie Institute as a first year MBA, Nic entered the Michigan Business Challenge with a business plan for building wind turbines. He followed this with an internship at Primus Power, based in Alameda, CA. Primus Power is commercializing the next generation energy storage system aimed at improving the cost and reliability of the electric grid. This was an exciting next step for Nic.  While there, he had the opportunity to work alongside the company’s founder and help shape the company’s future from building out their product strategy to identifying and bringing on partners and new employees.
• Matt Johndrow interned this summer at the U-M Office of Technology Transfer. The internship allowed him to contribute his expertise to several early-stage companies in different industry segments.  Matt immersed himself in research, specifically looking into the medical device, pharmaceutical and soccer markets to determine if an entrepreneur’s ideas and products would be adopted by doctors, patients and soccer coaches. Matt is now planning to take his newly acquired research skills and apply them to his course work.
• Manisha Tayal jumped at the chance to intern at the Michigan Venture Capital Association (MVCA). In her role, she tracked venture capital activity in the State through research and direct interactions with local venture capital firms. She was able to gain an understanding of the industry, as well as its importance to Michigan. After she fulfilled her internship, Manisha stayed on at the MVCA to continue her research. While there she hopes to help grow the industry by helping to mentor and attract more talent.