State of Michigan a crucial part of the growth of entrepreneurial and investment community success in Michigan
“Over the last decade Michigan has experienced tremendous growth in the entrepreneurial community. The number of new companies receiving investment has grown by 34% nationally, but in Michigan we’ve grown by more than four times that number – 143%. The State of Michigan is an investor in many of the funds managed by the 36 venture capital firms in Michigan and this commitment has made Michigan one of the fastest growing venture capital and angel investment areas in the nation.” –Maureen Miller Brosnan, Executive Director, Michigan Venture Capital Association
Since the State of Michigan committed to growing the entrepreneurial and investment community in 2006, Michigan has seen tremendous growth in the number of venture firms, availability of venture capital, and amount of venture capital investment in Michigan companies. Much of this growth stems from the significant anchor investments the state has made in venture capital firms that do business in Michigan. On average, the state has provided less than 11% of the investment in Michigan venture firms – but this 11% has helped build a strong foundation for raising the other 89% from institutional investors, high net worth individuals, and family offices both inside and outside of Michigan. In the last year, venture capital firms in Michigan invested $282M in 74 Michigan companies; each dollar of Michigan venture capital investment attracted $4.31 of investment from outside of Michigan.
The Michigan Venture Capital Association has performed in-depth analysis of the entrepreneurial and investment activity in Michigan for nearly a decade – see the 2016 MVCA Research Report here. Much of this data was utilized by Columbus, Ohio-based TEConomy Partners LLC in a 73-page analysis done for the Michigan Economic Development Corporation on their economic development strategy for the entrepreneurial and investment community in Michigan. See the full TEConomy Partners study here.
Below is trend data on the growth of the venture capital community from 2006 – the start of the State of Michigan’s commitment to growing this community – to present. We need to keep building on the momentum!
“We’re thrilled to see the strides Michigan has made in establishing itself and the Great Lakes Region as a place where venture capital firms and startups can flourish. By all measures, Michigan stands out as prime location for innovation to thrive.” –Bobby Franklin President & CEO, National Venture Capital Association
The Michigan Venture Capital Association is proud to report that many of TEConomy Partners’ 11 recommendations to the Michigan Economic Development Corporation are perfectly aligned with MVCA’s current activities and goals. TEConomy Partners recommended that in order for Michigan to continue its momentum to diversify its economy it should:
- Develop an executive connect program that connects would-be entrepreneurs with resources such as technology, coaching capital, management, partners and support services. Read more about MVCA’s ExeConnect Program here.
- Provide additional funding for an entrepreneur-in-residence program to provide startups with experienced C-suite management. Read more about MVCA’s Executive Attraction Program here.
- Provide additional funding for an executive-attraction program to provide help with recruiting experienced talent and first-year salary expenses. Read more about MVCA’s Executive Attraction Program here.
- Even out the availability of entrepreneurial services statewide.
- Create a third fund of funds to invest in both in-state venture capital funds and out-of-state funds willing to invest here. Keep up on MVCA’s legislative initiatives by following us on social media, our blog, and signing up for our newsletter!
- Provide more pre-seed and seed funding for startups.
- Provide more support for the growing network of angel investors by offering, as do 20 other states, tax credits to angel investors who invest in technology companies. Keep up on MVCA’s legislative initiatives by following us on social media, our blog, and signing up for our newsletter!
- Create a proof-of-concept fund to help determine the commercial potential of a discovery or research and to support prototype development, testing and marketing research.
- Create a sector-specific matching grant program to build connections between research institutions and industry.
- Develop a revised reporting system that allows for economic analysis and assessment of various Michigan Economic Development Corp. programs on an ongoing basis.
- Analyze innovation-industry clusters to determine how best to support unique sector needs.
Read the full 2016 MVCA Research Report for more information!
Michigan Venture Capital Association is a non-profit trade organization designed to bring together venture capital industry participants in the state of Michigan. The organization’s goal is to grow and sustain a vibrant venture capital community in Michigan. MVCA membership includes private and corporate venture capital funds, angel investors, universities and economic development participants, and service providers. More than 400 individuals are members of MVCA, representing 100+ organizations across the nation.
Posted June 30, 2016 in Entrepreneurial Resource News | Venture Firm News | MVCA NEWS