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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May 20, 2013 @ 11:10 am

MVCA Research Report: Michigan Jumps to 15th for VC Activity, $242M Invested in 2012

FOR IMMEDIATE RELEASE — MAY 20, 2013 – ANN ARBOR, MICH. — The Michigan Venture Capital Association’s annual research report, a compilation and analysis of investment activity, shows that 2012 was a banner year for venture capital (VC) in the state.  Compared to the national trend of declining VC funds and activity, funding activity and fund sizes in Michigan continued strong and steady growth last year.  In 2012, Michigan jumped from 25th to 15th in the national VC ranking — one of the largest increases in venture funding last year.

 

“The data reported in MVCA’s research report tell a compelling story about Michigan’s success in growing and nurturing an innovation-based economy,” said Carrie Jones, MVCA executive director.  “The venture capital community in Michigan continues to mature, with more VC under management among firms here than ever before as well as a steady increase in out-of-state funds establishing a presence in the state.  In tandem, Michigan’s entrepreneurial ecosystem continues to mature and strengthen, and more companies than ever before are attracting VC funding.”

 

The MVCA data shows that there are 29 venture capital firms doing business in Michigan. In 2012, venture capital firms invested $242 million in 33 deals in Michigan.  An additional $12.5 million in a combination of angel and pre-seed funding was invested into these same deals.

 

The state has 106 active companies that have received venture capital or angel investment. While the majority of these companies are in the life sciences, the number of companies in other sectors are growing, most notably those focused on information technology.

 

Growth in Michigan venture funds has been steadily trending upward.  In 2012, the amount invested by VCs, average fund size, capital under management all increased, as did available capital for new investments and the number of investment professionals. This growth has, in part, come from out-of-state funds opening offices in Michigan to tap into Michigan’s growing deal flow.

 

“Attracting outside investment to Michigan infuses the economy with new money that can help a company grow here,” Jones added.  “Entrepreneurs are taking notice of this trend; thanks to the successful venture community in Michigan, more entrepreneurs are considering the state as a destination to locate and grow their business.”

 

About the Michigan Venture Capital Association

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. Membership includes private venture capital funds, corporate venture capital funds, private equity firms, angel investors, and entrepreneurial infrastructure participants. The MVCA is a vehicle to bring together industry participants and to provide a concerted voice for Michigan’s venture capital industry. For more information, visit www.michiganvca.org.

 

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January 18, 2013 @ 11:37 am

Huron River Ventures Invests In Digital Cleantech, Michigan’s Future

It only takes five minutes with Tim Streit to get excited about Michigan’s potential.   The venture capitalist could easily be the state’s chief evangelist.

 

“People who don’t know what’s happening here think I’m crazy for being so enthusiastic about Michigan,” Streit explained. “From even the most pragmatic, reserved viewpoint, all I see is potential; Michigan has everything it takes to nurture a healthy start-up ecosystem. You can see momentum building statewide from Grand Rapids to Detroit.”

 

It’s that view that compelled Streit to leave a comfortable corporate position at HSBC to co-found Huron River Ventures with Ryan Waddington in 2010.

 

Huron River Ventures, which has offices in Grand Rapids and Ann Arbor was funded initially by Michigan’s $6 million Accelerator Fund Program. It’s on track to finish fundraising in the $12 million range. With that money, the firm has focused on making $250,000-$1 million seed investments in early-stage, Michigan-based companies. The firm is keen on investing in energy efficiency technologies, digital cleantech – IT enabled solutions to global resource constraints – and smart transportation. Tim’s background building software-as-a-service businesses combined with Ryan’s background investing in energy technologies was a perfect complement.

 

“In 2010, we had hypothesis about the future of technology: With the right backing, the talented minds and businesses in Michigan could help redefine the energy economy for the world market,” Streit explained.  “It was the perfect time to start Huron River Ventures; Michigan-based entrepreneurs were struggling to attract coastal VCs, who didn’t understand what they were missing.”

 

Huron River Ventures’ portfolio reflects this vision of the future through its investments in digital cleantech companies like SideCar and FarmLogs as well as energy efficiency technologies like Ambiq Micro and OptoAtmospherics.  It also reflects the firm’s commitment to Michigan: FarmLogs and OptoAtmospherics are based in the Ann Arbor region. SideCar and Ambiq Micro are both spin-outs from the University of Michigan that have expanded outside of the state.

 

Three years later, the rest of the world is catching up and recognizing that energy efficiency and digital cleantech are the future. “We are really proud of our co-investors, including Google Ventures, Lightspeed Ventures, Mercury Fund, Rockport, First Step Fund and others that can help us propel these world-changing innovations forward,” Streit added. “Huron River Ventures is bringing real value to our portfolio companies, and Michigan’s economy, by attracting these other sources of capital.”

 

“Huron River Ventures looks for investments that not only show growth potential and will deliver ROI, but also for those that show potential to change the world,” said Streit. “We’ve found these great opportunities here in Michigan, and know that there are more to come. The researchers, engineers and technologists here, combined with an unbeatable work ethic and wealth of ingenuity, make early-stage Michigan companies a winning investment opportunity.”

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April 27, 2012 @ 8:59 pm

Call for Presenting Companies for 31st Michigan Growth Capital Symposium – May 15 & 16

MGCS 2012 will feature presentations from more than 40 of the Midwest’s top high-growth companies. Applications will be accepted through Tuesday, March 6. A four page (maximum) executive summary is needed to apply along with a $20 application fee.

Who should apply?
High-growth innovative companies from market sectors including but not limited to internet, software, healthcare, medical device, pharma, mobile and energy. Companies encouraged to apply include seed, early-stage, late-stage, and pre-IPO. Presenting companies will be selected by a committee of qualified venture capitalists. Companies will be selected based on market opportunity, competitive advantages, intellectual property, partnerships, business/technology platform, financial projections, exit strategies and the quality and experience of the management team.

Companies considered for presenting should meet the following criteria:
- Project $20M in revenue within five years.
- Seek funding in the range of $500K to $20M.
- Preferably have a Midwest connection.

Presenting Company Benefits
*  A four-page company executive summary will be included in the conference binder.
*  Listing of company name and link on the MGCS web site.
*  Pitch and presentation coaching.
*  15 minute presentation slot to showcase your business opportunity.
*  Table-top exhibit space.
*  Extensive networking time in and near the exhibit area.

Registration
Selected companies receive a reduced registration rate of $295, which is a $200 discount off regular admission.

MGCS will also feature:

*         2 Keynote Luminaries

*         65+ Investment Firms Represented

*         42 Top Midwestern Companies Seeking Funding

*         30 Premier Panelists

*         5 World Class Panel Discussions

*         2 Days of High Level Networking

Questions? Please contact Mary Nickson, Symposium Manager, at 734-615-4424 or mnickson@umich.edu.

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September 21, 2011 @ 2:34 pm

MEMBER NEWS: Plymouth Venture Partners II Completes Fund-Raising at $41.0 Million

Managing Partner Mark Horne reported today that fund-raising for Plymouth Venture Partners II has
successfully concluded with $41 million of capital committed (slightly above the target range of $30 to $40
million).  The strategy of Plymouth Ventures II is to provide growth capital to young companies headquartered in the
Great Lakes region that have begun commercialization of their products or services in the market and need
capital for their next growth step. Plymouth Ventures II is looking for companies seeking up to $5 million in
total capital.

Mark Horne commented, “We have seen a considerable increase in the number of Great Lakes early stage
companies, but there is a significant shortage of capital to support their growth. Our new Fund has been
raised to meet this need.”

Mr. Horne added, “This is the final closing of Plymouth Ventures II. Through earlier closings the Fund has
already invested in three companies. These companies have implemented their growth plans and are
demonstrating the importance of the timely raising of such capital.”

Plymouth Ventures II follows on the heels of Fund I which completed its new investment cycle in 2009 and has
been in a successful exit mode in recent years.  For more information on the investment criteria of Fund II, see www.plymouthvc.com.

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October 19, 2010 @ 2:16 pm

MVCA Breakfast Roundtable, Offices of Beringea, October 19, 2010

“The tourists have left.”  That’s how National Venture Capital Assn. President Mark Heesen describes the pared down U.S. entrepreneurial ecosystem after several years of tough exit markets, low returns, and an abysmal fundraising environment.  Further, he expects the fallout from the dot-com bust and its effects on the venture capital community to continue through 2011, as the last of the weak VC players retreat from the industry.

NVCA President Mark Heesen address the MVCA Roundtable group

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Heesen did have some good news for Michigan’s venture community–the exit market is picking up, with a record number of acquisitions this year and the expectation that that number will climb after the midterm elections.  Fundraising should pick up accordingly, as existing LPs start receiving long-awaited checks and become more optimistic about the asset class.  He also shared a prediction that our state will become one of the most important state’s in the country if Republicans gain control of the U.S. House of Representatives, as Reps. Fred Upton (R–6th District) and Dave Camp, (R–4th District) are poised to take leadership roles on powerful House committees.

Finally, Heesen touted the importance of regional venture funds as locally sourced deals become a key differentiation point in Silicon Valley.  He expects a continued increase in first-time funds and early stage funds, as smaller LPs previously frozen out of the asset class squeeze in.  He said the NVCA is carefully monitoring the European directives that will restrict European money invested into U.S. funds and foreign venture investments in European companies, an issue so important its passage could lead to a U.S./Europe trade war.

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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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