Michigan is taking its next step this summer in gardening its homegrown venture capital industry, launching the
Pure Michigan Venture Development Fund
The state has spent the last decade investing tens of millions of dollars into its venture capital industry, providing matching funds for local VCs and training for early investment professionals. "Trying to develop a venture industry requires a long-term effort," says Mike Flanagan, manager of equity capital programs for the Michigan Economic Development Corp
. "Michigan has been at it for 10 years and needs to keep at it."
The Pure Michigan Venture Development Fund, backed by the MEDC, plans to further that development by offering millions of dollars in matching capital to first- and second-generation venture capital funds in Michigan. The idea is to help them raise additional funds and become viable entities, with the ultimate intent of increasing the number of venture investments in the state.
The fund plans to invest up to $2.25 million each in as many as four new Michigan-based venture funds. Those venture funds must raise additional capital from the private sector, at least 4.5 times the state's investment, and use that cash to invest in Michigan companies.
To qualify, venture funds are required to have raised $1 million in private capital from at least three unrelated investors at the time of application. Funds that have raised more than $25 million or have target sizes greater than $50 million are not eligible. For information, contact the MEDC at VDF@Michigan.org.
Source: Mike Flanagan, manager of equity capital programs for the Michigan Economic Development Corp
Writer: Jon Zemke