Featured Member Archive

March 20, 2014 @ 11:43 pm

Invest Michigan Looks to Create Sustainable Fund for Michigan Entrepreneurs

Charlie Moret has been in the world of startup financing for a long time, but it’s been quite a while since he’s been as excited as he is to take the helm of the soon-to-be-launched Michigan Pre-Seed Fund 2.0.  Invest Michigan will be the Fund manager and, is set to take advantage of Michigan’s unique entrepreneurial ecosystem, and show that sustainability is the path forward to the state’s vibrant future.

 

“Michigan is incredibly active in terms of entrepreneurship,” explained Moret of taking the head job at Invest Michigan. “Doing this in Michigan is an exciting opportunity and I look forward to being a partner with the state’s investor groups.. Working with entrepreneurs and assisting them is a chance to be part of Michigan’s future.”

 

Moret, who was previously with TechTown Detroit, is working now on getting Invest Michigan ready for business. The fund plans to officially launch on May 31.

 

With Invest Michigan, Moret hopes to take the lessons learned running TechTown’s entrepreneurial programs and a similar venture fund in Connecticut, and blend  Ann Arbor SPARK’s experience with the Michigan Pre-Seed Capital Fund to create a sustainable fund over time.

 

“The Michigan Pre-Seed Fund 2.0 needs to become a revolving capital fund,” Moret explained. “It’s important that we create a sustainable fund so that we can continue to be a viable source of capital for start-ups.”

 

As with the Michigan Pre-Seed Capital Fund, Invest Michigan will target startups in AgTech, advanced manufacturing, homeland defense, alternative energy, IT and life sciences.

 

The Fund, as its predecessor did, will also engage with all of Michigan’s 15 SmartZones.  “The SmartZones are important partners as well as the state’s investment funds and the SBDC,” Moret explained. “Bottom line: We want to make sure companies get support that reduces time to market, and that usually comes best from the combination of SmartZones, co-investors and the SBDC working together.”

 

Invest Michigan will have monthly conference calls with the  SmartZones and will hold monthly  office hours so clients can engage with the Fund before applying for financing.

 

“Two things that attracted me to Michigan was the strong supportive ecosystem that exists and the momentum,” he added. “Everyone talks about California or Boston or Colorado, but the reality is that Michigan offers startups stronger support. A key advantage to being in Michigan is that an entrepreneur can access more resources and faster than in other states.”

 

Looking forward, Moret sees as a tipping point in Michigan’s technology based economy.

 

“The work that has occurred here over years, and the number of investment funds that are now operating here – well we’ve hit the tipping point,” he said. “Michigan has momentum and all the right tools. It’s a great time to be here, and a great opportunity to be part of something bigger.”

 

For information on funding opportunities available through Invest Michigan, stay tuned and visit www.investmichigan.org at the end of May.

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February 17, 2014 @ 9:21 am

Michigan eLab Invests in Michigan Startups

A perfect storm of talent, ecosystem and history all contributed to Michigan eLab choosing to invest in startups in the state, but it’s a storm that was brewing for some time. Not only did Michigan’s heritage of innovation and engineering compel the founders to choose Michigan, almost all of the founding partners have roots here… and an abiding respect for the tech wizardry that’s emerged from the state.

 

“It’s hard to not be amazed by all of the tech giants that came from Michigan,” Michigan eLab founding partner Doug Neal explained. “Google, iPod, Nest, Twitter, Microsoft, Sun – the amazing talent behind those disruptive companies all came from Michigan. There’s just something about Michigan, whether it be talent or the network of support here or a culture of creating and building things, that make it a natural hub for disruptive technologies and talented entrepreneurs.”

 

Neal, who moved to California after college and soaked up the startup lifestyle, wanted to raise his family in Michigan after selling the startup he founded. And, as much as he wanted to give his family the ideal life, he wanted to give back to the state he’d called home for most of his life.

 

“While in California, experiencing the startup culture and launching my own venture backed tech company, I learned the importance of ecosystem and the power of a strong network,” he explained. “Michigan eLab was founded to bridge the talent, capital and customers from Silicon Valley to Michigan and invest in the next generation of technology startups that exist here.  Most non-Michigan venture funds that come to Michigan do so as part of a broader geographic independent strategy.  Michigan eLab is laser focused on bridging only two locations:  Silicon Valley and  Michigan.”

 

“Michigan is an underserved market, and so many investors continue to fly over our state and they’re missing tremendous opportunities,” Neal added. “We have a passion for that early, messy stage of a startup where there’s tremendous opportunity and where being able to bring the talent, capital and customers together can have tremendous impact.”

 

The firm is focused squarely on those high impact opportunities, specifically in digital health care, big data, mobile and technology that connects the physical world to the Internet, such as wearables, automotive technology and embedded sensors. Its first investment, in the startup Fonemine, reflects its vision for the type of startup that can thrive in the Michigan ecosystem.

 

“Fonemine highlights multiple aspects of the Michigan eLab approach,” Neal explained. “The company is headquartered in Silicon Valley, but we convinced them to open a design center here to tap in to engineering talent in Michigan. We were also able to connect someone from the eLab coaching network – in this instance, David Sergura, founder and CEO of VisionIT – to help the startup move forward. David is an amazing and very successful Michigan entrepreneur who brought expertise in enterprise sales and a large existing customer base to Fonemine. It’s a great example of how Michigan eLab’s network, and the network of expertise in this state, can accelerate the growth of a company we invest in.”

 

Although Michigan eLab just launched a year ago, it completed its first closing last fall. It’s wrapping up the fund raising on Fund I this year, and looking at other exciting investment opportunities.

 

“There are a lot of things that have me geeked for the coming year,” Neal said. “The significant interest from first time venture capital investors to be part of Michigan eLab Fund I is exciting and we’re seeing a growth in disruptive technology companies coming out of the ecosystem in Michigan. From low-powered sensor technology to cloud and virtualization technology.”

 

“It’s the technology that solves really big problems that gets everyone excited, generates interest and delivers outsized returns,” he added. “Michigan eLab is committed to finding, funding and nurturing those startups and we are looking for entrepreneurs that want to change the world!”

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January 24, 2014 @ 3:58 am

Invest Detroit’s First Step Fund

Invest Detroit continues to actively support companies in the Detroit region with its First Step Fund (FSF). Based in downtown Detroit, First Step Fund is an early stage micro investment fund that was formed through an investment from the New Economy Initiative of Southeast Michigan.

 

While more and more funds are choosing to call Michigan home, few are like First Step Fund. In most cases, First Step Fund is the first institutional investment into a company. The industry agnostic fund has made 55 investments across southeast Michigan.  The fund has an interest in supporting women, minority and immigrant owned companies across the region.

 

First Step Fund’s recent investments include Avegant, Sky Specs and Kontextual. “These investments all fit First Step Fund’s overall investment strategy so well, and are the ideal representation of the range of businesses that can grow and thrive in the region,” said First Step Fund’s managing director, Adrian Fortino.

 

Avegant is a new platform that allows consumers to interact with media and data in new ways, and allow for new forms of storytelling.  The platform revolves around Avegant’s revolutionary virtual retinal display technology that interacts with eyes in the way that they naturally function. By reflecting light into the eyes, consumers can see media and data the way they’re supposed to be experienced: lifelike and vividly.

 

“First Step Fund saw an extraordinary and uniquely designed opportunity last year when we invested prior to the seed round Avegant closed late last year,” said Fortino. Avegant recently won a coveted CES Editors Choice at the 2014 Show and exceeded their goal in their Kickstarter campaign in less than four hours.

 

Sky Specs develops autonomous unmanned aerial vehicles that inspect infrastructure such as bridges, wind turbines, dams and sewers. SkySpecs couples the hardware with an analytics dashboard to interpret and map the massive amount of data gathered during flight.

 

“First Step Fund led Sky Specs’ $500,000 pre-seed round to finalize the first commercial product and effectively launch the company,” Fortino continued. “Sky Specs has market opportunities across several verticals and a remarkable team which has positioned it well with key strategic partners at a prototype stage.”

 

Kontextual helps companies build transparent, metric-driven cultures.  Its cloud- and mobile-based platform is the end result of decades of experience in the enterprise software market combined with cutting edge software skills and intensely beautiful interface design, all sprinkled with a healthy dose of lessons learned from social media.

 

“Business social enterprise software is a dynamic sector and Kontextual is positioned well with an experienced management team and great investment partners,” he added. “Kontextual fills a critical gap in the business operations software space.”

 

Looking forward, Invest Detroit is excited by the potential for First Step Fund as well as its recently-launched Detroit Innovate, a seed stage venture fund to fuel high-growth technology companies in the Detroit Region. Detroit Innovate focused on enabling technologies in healthcare, transportation, advanced manufacturing, and resource efficiency.

 

“Our deal flow has never been higher in volume and quality,” said Fortino. “We expect to continue at the brisk pace of 2013 where we invested in 10 new companies, if not more!”

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January 2, 2014 @ 11:07 am

Baird Capital Opens Ann Arbor Office, Sees Michigan as Ripe with Potential

When global investment firm Baird Capital announced in 2013 that it was opening a Michigan office, investors – and entrepreneurs – took notice. Not only is the firm’s Ann Arbor office its first outside of a major metro area, it’s being headed up by David Gregorka, whose entrepreneurial roots grow deep in the state.

 

Before joining Baird Capital, Gregorka was working on several projects with the Office of Tech Transfer at the University of Michigan. He assumed this position after leaving HealthMedia, a venture-backed company he co-founded in Ann Arbor in 1998 that was acquired in 2008 by Johnson & Johnson.

 

Being deeply entrenched in Michigan’s entrepreneurial eco-system is a differentiator for Gregorka. “I’ve worked with all seven research universities in the state and most of the ecosystem partners, at the state and local levels, and can bring those relationships to bear in building a network in Michigan for Baird,” Gregorka explained. “Although we chose to locate in Ann Arbor, Baird is excited by what we are seeing across the state.”

 

Baird Capital’s venture capital team invests in early and growth stage companies in tech enabled services and health care. Since its inception, Baird Capital has invested approximately 50 percent from its three funds in Midwest companies.

 

“We see a strong pipeline of potential investments in Michigan in both IT and health care,” Gregorka explained. “This strong potential is consistent with Baird Capital’s overall investment strategy. As an organization, we are committed to partnering with leading entrepreneurs and helping them build great companies.”

 

Those partnerships and relationships are key to what Baird is and does – and was a critical factor in the firm’s decision to open an office in Michigan. Gregorka intends to use his experience and existing relationships to help Baird find the best investment opportunities in the state.

 

“Being here is a chance to work with entrepreneurs, regardless of whether they’re in Baird Capital’s ‘sweet spot’ for investments,” Gregorka explained. “Being a part of the entrepreneurial ecosystem is something that Baird Capital, as an organization, likes to do. You never know when an entrepreneur or company that isn’t a potential investment today will become a future partner.”

 

Baird Capital was an early investor in Accuri Cytometers, an Ann Arbor company that had a very successful exit. It is currently invested in Ann Arbor-based Molecular Imaging, a contract research organization that provides services to pharmaceutical companies and conducts small animal imaging studies. The company is on the fast track to success, having just expanded operations to the west coast to run a preclinical imaging center at the Sanford Consortium for Regenerative Medicine in La Jolla, Calif.

 

Baird Capital’s investment in Molecular Imaging is part of larger pool that also includes Michigan Venture Capital Association member Beringea. Baird typically syndicates with other investors and hopes to increase the deals it does with other Michigan firms.

 

“Ultimately, finding and making investments in IT services and health care companies – both early and growth stage – is the primary focus of Baird Capital’s work, including our office here in Michigan,” Gregorka said. “As an organization, the Baird team has been in the trenches as venture capitalists and as entrepreneurs, and we know what it takes to be successful. We see Michigan as a ripe environment for future success.”

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November 26, 2013 @ 1:33 am

Jim Adox and Venture Investors Charge Full Steam Ahead

Jim Adox and Venture Investors are charging full steam ahead in a challenging economy, and in doing so, are pushing the boundaries of what’s possible here in Michigan. Dreaming big – including the potential for a new, state-sponsored fund of funds – and being willing to work for it are setting Adox and his firm apart, and positioning them for leadership.

 

Adox joined Venture Investors in 2007 as a managing director and heads up its Ann Arbor office. Venture Investors, founded in 1982, is one of the leading venture capital firms in the Midwest.  It’s focused on making seed and early stage healthcare and technology investments.  With offices in Madison, Wisconsin and Ann Arbor, Venture Investors is strategically located in the backyards of the nation’s two leading public research universities. The firm is currently investing out of its fifth fund and has more than $200 million under management.

 

Venture Investors recently made three exciting investments, UpTo, Reshape Medical and NetSocket.  UpTo, a social calendar app that’s generating a ton of buzz, is the firm’s first investment in Detroit, and one that it made in collaboration with Detroit Venture Partners. ReShape Medical is a nonsurgical weight loss company headquartered in Southern California, and NetSocket is a Plano, Texas company focused on software-defined networking solutions (SDN).

 

Although Venture Investors’ recent deals are diverse having just closed its fifth fund has Adox and his team particularly bullish about Michigan’s future. “It’s a really challenging environment to close funds, and we’re pleased we were able to accomplish it,” he said. “Michigan offers some unique resources, such as the Venture Michigan Fund, that make choosing to raise VC and make investments here appealing. There are a lot more VCs to do deals with and more experienced entrepreneurs, and Venture Investors has a new fund and money to invest. I’m looking forward to making a few more Michigan investments in the next year.”

 

Adox came to Michigan from the east coast, despite never having heard of Ann Arbor before choosing University of Michigan’s engineering school. “My familiarity with Ann Arbor was tied to Bob Seger’s song about Ann Arbor,  ‘Main Street’,” he said. “Once I got here, though, I didn’t leave. After graduation, I became a gear head in automotive world through an executive engineering program at Chrysler.  I left that position and returned to U-M, where I earned my MBA.”

 

He left U-M with more than an MBA, though. It was during his MBA program when he was introduced to VC through professors David Brophy, director of the Center for Venture Capital and Private Equity Finance, Andy Lawlor, Lecturer of Entrepreneurship and Strategy and Director, Global MBA Projects, and Tom Kinnear, the Eugene Applebaum Professor of Entrepreneurial Studies.  Adox maintains these transformative relationships today.

 

Adox, who was recently elected chair of the Michigan Venture Capital Association, sees assets like the Venture Michigan Fund, a fund of funds managed by Credit Suisse, as critical to the state’s future success. He also sees the state’s burgeoning entrepreneurial network as a strong indicator of future success.

 

“The more I’ve gotten involved with MVCA, the more I’ve seen that there’s an opportunity to improve Michigan’s entrepreneurial ecosystem,” Adox explained. “I want to play a role in that. I’ve been here 15 years and have a good idea of where we’ve been and where we can go. I want to do my part to improve the opportunities for everyone – entrepreneurs and VCs alike.”

 

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September 27, 2013 @ 7:58 am

Cultivian Sandbox Ventures Closes $68M Fund, Dominates Agriculture Investing

Cultivian Sandbox Ventures, which recently established a presence in Ann Arbor, is leading the emerging national trend in agriculture funding. With offices in Chicago and Indiana, the firm is looking to tap in to Michigan’s unique assets to build on its current success and support its long-term growth.

 

Cultivian Sandbox Ventures recently closed on $68 million for its second fund,  following its successful $34 million Fund I.  From Fund I, Cultivian made nine investments, including one that recently issued an IPO and another that executed a successful exit.

 

With an eye on building on its success to date, choosing Michigan was a natural choice for Cultivian.

 

“Michigan has one of the most aggressive economic development focus in the nation,” explained Matt Bell, who is heading up Cultivian’s Michigan operations.  “Start-ups have a strong incentive to choose Michigan because they know they’ll get the support they need to grow.  Plus, there’s a broad agricultural base in Michigan, which is of particular interest to Cultivian.  Having Michigan State University and University of Michigan here – two quality universities in a small geographic footprint – is also a compelling reason for our firm, and the companies we fund, to choose to grow here.”

 

According to a United Nations report, the global demand for food is expected to double in the next 50 years.  Demand for food and agriculture technology will continue to grow in tandem with the need for food around the world, ultimately bringing prominence to agriculture innovation.

 

This future potential in agriculture technology pulls forward Cultivian’s past: Cultivian’s founders are agriculture industry veterans.  They bring more than 50 years experience and enviably deep networks to their investments.  It’s no surprise that its Fund I companies have achieved remarkable success. Aratana, based in Kansas City, went public in June, and Divergence, another of the Fund’s investments, exited to Monsanto in 2011.

 

“There’s more interest and investment in agriculture than ever before,” said Bell.  “More people are looking at deals, more companies are starting up in the sector, and there are more options for syndicates.  It’s a perfect storm of money and people, and Cultivian is at the epicenter of this agricultural investment activity.”

 

From Ann Arbor, Cultivian will continue to push agricultural investing forward. “The intent of the fund over the next couple of years is to establish a strong portfolio and strong returns for investors,” explained Bell.

 

“We think that there’s more opportunity for investment in agriculture,” Bell added.  “What we want to do is to encourage others to invest in and raise money in this space.  We want to put investing in agricultural start-ups on the map.”

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August 8, 2013 @ 8:18 am

Strong B2B Base, Deep Roots in Building Sustainable Businesses: Why Michigan is for RPM Ventures

RPM VenturesRPM Ventures, founded in 2000, is a seed and early stage venture firm with $75 million under management. RPM concentrates its investing in the information technology (IT) space, on companies in specific disciplines.  RPM specifically seeks opportunities in businesses where the firm’s West Coast experience and Midwest roots add strong value: Retail automotive software, industrial and retail enterprise solutions, E‐commerce, online marketplaces, and cloud and social media infrastructure.

 

RPM co-founders Tony Grover and Marc Weiser both attended University of Michigan, and chose to come back to the state to grow their careers.  Before starting RPM, Grover and Weiser’s experiences included working for Intel and starting three venture-backed IT ventures.

 

“The story isn’t that we left the excitement of the coast to come back to Michigan, but that we deliberately chose to start RPM here,” said Grover.  “Our presence in Michigan is a strong asset in the sectors where we focus; our portfolio companies can tap into the resources here in the Midwest and use those resources to leap ahead of their competition.”

 

“Michigan offers the relationships and global connections that few other locations can match,” Grover added.  “We’re home to major automotive manufacturers, Tier 1 automotive suppliers, Whirlpool, and Dow Chemical – to name a few.  Some of these companies are focused on consumer products, some on industrial B2B, but every single one has large international presence and all are using IT to make their business more efficient.  For RPM’s portfolio companies, those factors are enough to make the argument for ‘Why Michigan?”

 

The quality and type of investment that RPM is able to find in Michigan strengthens that argument. The firm has made a new investment in Michigan every six months for the last 18 months.  RPM led investment rounds in DeepField, Kontextual, and ArborMetrics. All of these recent investments are reflective of Michigan’s ever growing and strengthening entrepreneurial economy.

 

“DeepField was co-founded by two early Arbor Networks employees and is a great example of a successful local company that spawned entrepreneurs who launched several ground breaking new startups,” explained Grover.  “Kontextual was founded by Kurt Skifstad, a local tech CEO and serial entrepreneur who has a track record of success here and wanted to stay in Michigan. A prominent University of Michigan faculty member founded ArborMetrics, and its seed round was led by Michigan VC firm Arboretum Ventures.  All three of these companies have very exciting stories that center on wanting to grow in Michigan and being able to find the talent and funding to help them do it.”

 

“When you look at what Michigan has to offer entrepreneurs and venture backed companies, you see that we have a strong B2B base and deep roots in building sustainable businesses.   Those deeps roots are actually changing our present economy.  We’re starting to have more successes here, gaining experience here, and we’re growing the entrepreneurial talent base here,” Grover added.  “Recently, we’ve seen successful exits, like Arbor Networks, HealthMedia and Accuri Cytometers, and increasing VC activity. It hasn’t happened overnight, but it’s happening here now and building the base for continued future entrepreneurial growth.”

 

Looking forward, Grover is optimistic that this upward trend will continue.  “We’ve spent a decade growing RPM and are confident that the areas where we’ve built our expertise are our future. We’ll keep doing what we do, and we’re excited for how things are changing in the market and in this state.  We’re seeing more capital, talent, and experience accruing in Michigan, and that provides a great outlook for the future.”

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July 24, 2013 @ 11:28 pm

Beringea Attributes 25-Year Success to Seeing Things a Little Differently

Ask Beringea founder and managing partner Charlie Rothstein what makes doing business in Michigan different and you’ll get a quick, candid answer.  “We don’t follow the herd and trip over competitors like you would on the coasts.  We collaborate and we cheer for each other, and that makes us different than the rest of the world.”

 

Looking beyond the Great Lakes has provided Beringea with terrific perspective and unparalleled opportunities for investing, but the firm’s roots in Michigan are the strong foundation on which it’s continued to thrive.  Beringea chose to call Michigan home because unlike others, it saw the state as offering amazing potential for those willing to take a chance and start here.

 

“People outside of Michigan wondered what we were doing starting here,” Rothstein said, recalling Beringea’s humble beginnings in his basement 25 years ago.  “That always struck me as the wrong question because the answer is so obvious: In order to be successful, you have to see things different than the rest of the world.  In Michigan, we don’t give up when things are tough, which is a huge advantage for entrepreneurs that will get knocked down a lot in the early stage of business.  Knowing these companies will get off the mat and persevere makes them a really attractive investment opportunity.”

 

That eye on Michigan’s strengths has helped Beringea find great investment opportunities that those outside of the state are missing.  Recently, it backed Fiber Byproducts, a Michigan company that recycles wood waste.

 

“Fiber Byproducts is based on a smart, simple concept that’s in great demand,” Rothstein said.  “The company takes scrap wood from construction business that would otherwise go to waste and recycles it for wood pellets used in heating stoves as well as mulch, wood chips, and other consumer products.  Investing in Fiber Byproducts gives Beringea the chance to support a company that’s innovating a clean, cheap, sustainable fuel, and commercializing a Michigan-made product.  Fiber Byproducts is a great investment because it created an in-demand product but needed capital to take business to the next level.”

 

Identifying and embracing those attractive investment opportunities has helped Beringea become a partner of choice for entrepreneurs in a range of business sectors including media, healthcare, clean technology and IT. Today, the firm has offices in Detroit and London, more than 60 companies in its portfolio, and more than $525 million under management.

 

Recently, the firm’s portfolio has been boosted by a few major wins.  Beringea investment Pioneer Surgical Technology was acquired by RTI Biologics Inc. for $130 million. Earlier this year, the firm was also part of a $5 million investment round in Abe’s Market, an online store for natural and organic products.

 

Looking forward, Rothstein is as enthusiastic about the future now as he was 25 years ago.  “We are seeing an economy nationally and locally that has stabilized,” he said.  “In Michigan, we’ve laid the groundwork and now’s our opportunity to show that we’re home to great VCs and great companies.”

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June 24, 2013 @ 8:26 am

New Michigan Angel Fund Offers New Opportunities for Funders, Startups

Michigan Angel Fund

The Michigan Angel Fund (MAF) is a for-profit, professionally managed equity fund focused on capital efficient early stage companies located in Michigan. It is a $2 million fund that, with nearly 70 members, is the largest angel organization in Michigan.

 

“There are two really unique aspects to MAF,” explains managing director Skip Simms.  “MAF flipped the traditional angel model on its head by raising a fund first, reaching out to existing angels around the state, and people new to the angel community.

 

MAF is looking to fund companies that need $1-4 million in total investment to get to profitability.  “Most VCs aren’t interested in these investments because these companies are too small,” Simms explained.  “In reality, the majority of startups don’t need the amount of capital that can generate the size returns a VC needs.  We believe these smaller companies can still generate significant outsize returns comparable to VC returns on an IRR basis, just smaller dollar amounts.”

 

MAF is also unique because its managing member, Ann Arbor SPARK, is a non-profit economic development organization that provides support to the fund and its funding recipients.  Ann Arbor SPARK, as managing member, coordinates screenings of fund applicants, conducts due diligence, and works with the New Enterprise Forum to prepare companies for their investor presentations.  Ann Arbor SPARK also handles back office work on behalf of MAF.

 

“People wonder why Ann Arbor SPARK, an economic development group and non-profit, decided to create a for-profit identity and get in to managing an angel fund,” Simms said.  “If you look back a few years ago, it was apparent that the companies Ann Arbor SPARK and other groups were helping were all struggling to raise funds, mostly because they didn’t need a large investment, and weren’t quite right for VCs.  On the flip side, Michigan is a top 10 state for high net worth individuals, yet we didn’t have a lot of angels investing in these companies. We need to develop an angel funding culture. By supporting MAF, Ann Arbor SPARK brought more individuals in to the angel arena, and made it easier for startups to find capital in the state.”

 

Startup BioPhotonics Solutions is the first company to benefit from MAF’s focus on Michigan businesses.   The company, a Michigan State University spin out venture, is developing technology that automated the process of shaping and compressing ultrashort (femtosecond) laser pulses, ultimately improving their utility.  In addition to funding, MAF helped find BioPhotonics’ CEO Kyomi Monro.

 

“It’s important that MAF have an active role in its portfolio companies; by having a hands-on approach, MAF delivers valuable support beyond just funding the business,” Simms said.  “The angel community backing MAF offers a very diverse and significant depth of experience that can be a big help in getting a startup on the fast track to success with the connections and wisdom of its members.”

 

Going forward, Simms said that MAF will shift its focus from closing the fund to making investments.  “A year from now, we want to have six to eight companies in our portfolio,” he explained.  “At that point, we can begin thinking about raising another fund to keep MAF going.  The true measure of our success in a year is whether MAF’s 70 investors are happy with the program, its process and want to keep it going and keep making great things happen here in Michigan.”

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May 24, 2013 @ 9:03 am

Renaissance Venture Fund

Chris Rizik and Jeff Rinvelt

Chris Rizik and Jeff Rinvelt

With a relatively late start, Michigan’s venture capital community spent the early 2000s playing catch up to the leaders of the national venture scene, not redefining it.   But the 2008 creation of Michigan’s first private venture capital fund-of-funds was so revolutionary it made waves that continue to reverberate around the country and established our region as model for innovative venture fund creation.

 

Formed in association with Business Leaders for Michigan and with the backing of some of Michigan’s largest corporations, the $45 million Renaissance Venture Capital Fund I was hailed as a new model for fundraising.  The private sector could improve on the long-used public economic development model, using a fund of funds vehicle to earn strong returns, increase venture capital activity in a region and improve the portfolio’s chance of success by giving young companies invaluable direct access to their largest potential customers in the state—the Fund’s investors.

 

Renaissance Venture Capital Fund CEO and Fund Manager Chris Rizik describes these kinds of connections as “make or break” for some of the start-ups in his fund’s portfolio, allowing them to gain market traction quickly.  “Venture fund managers do a great job of vetting technology but the difficult piece is validating is the market—is there a customer base out there, and can we bring in a significant customer quickly?  With Renaissance Venture Capital Fund, we’re actually introducing the market to the start-ups.  If we find an interesting investment in the energy space, for instance, we’re one phone call away from DTE Energy.  A first or second customer of that size and profile can mean the difference between a slow climb or a quick ascension into viability.”

 

The success of Renaissance I led to the $65 million Renaissance Venture Capital Fund II in 2012, whose investors include a base of returning institutions as well as new additions like prominent Michigan businesses Meijer Inc. and La-Z-Boy; the first university to invest, Wayne State University; and three influential Michigan foundations: the Herbert H. and Grace A. Dow Foundation, the W.K. Kellogg Foundation and the McGregor Fund.  Rizik says expanding the investor profile was always the intention of the Fund’s organizers.  “The hope was to make this more than just a corporate-backed fund, involving Michigan institutions that represent many different stakeholders.  Fund I proved that a privately-backed fund-of-funds model could achieve regional impact while achieving solid financial performance for investors, so we were thrilled to widen the opportunity with Fund II.”

 

Rizik and partner Jeff Rinvelt credit recent strong returns and exits in Michigan for the Funds’ robust deal flow from all over the country, and Rizik says the Funds have doubled original targets for investment dollars attracted into the state.   In fact, the Renaissance Venture Capital Fund model has been so successful that leaders around the country have sought out Renaissance and his team to help replicate the model in their region.

 

“Cincinnati was a region facing many of the same issues we had in Michigan.  Led by executives from Proctor & Gamble, a group there commissioned a McKinsey Consultants study that suggested they replicate the Renaissance Venture Capital Fund model,” said Rizik. The managers of the resulting fund, called Cintrifuse, asked Rizik to sit on the advisory board and share best practices.

 

“We’ve helped Cintrifuse, and others who are also attempting to copy our model, because we feel it’s good for us to have complementary regional fund of funds.  And because we know this is a model that can make a huge difference to a geographic region that really needs it—we’ve seen it happen first-hand in Michigan.”

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The MVCA 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.
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