April 23, 2014 @ 8:03 am

Growing Forward: MVCA Programs Expand Michigan’s Entrepreneurial Ecosystem

Headshot - MVCA and Exec CommitteeA hallmark of the Michigan Venture Capital Association has long been our ability to offer members access to top-tier talent through Venture Upstart, a suite of programs designed to grow and sustain a vibrant venture capital community in Michigan.  Funded by a grant from the Michigan Economic Development Corporation, Venture Upstart programs have played a critical role in building Michigan’s entrepreneurial ecosystem and have allowed our members to attract exceptional talent to both their firms and portfolio companies.

 
Executive Attraction Program
The former CEO Placement Program, designed to increase the number of venture-backed executives in Michigan, has been expanded to include all C-level and senior sales and marketing positions at venture-backed firms.  Renamed the Executive Attraction Program, it provides assistance with recruiting and first-year salary expenses associated with hiring exceptional talent at qualified MVCA member portfolio companies, with the goal of increasing the number of successful portfolio companies in Michigan.

 
“Recruiting the right talent is crucial for any business and venture-backed companies can struggle to attract the best candidates,” said Charlie Rothstein, co-founder and senior managing director of MVCA member Beringea. “The Executive Attraction Program will help offset hiring costs, enabling portfolio companies to build strong management teams, thereby increasing the number of thriving venture-backed companies in Michigan.”

 
Venture Fellows Program
Another Venture Upstart program, the Michigan Venture Fellows Program, aims to increase the number of venture professionals in Michigan and accelerate fundraising and deployment of capital into early stage companies.  Selected Venture Fellows are professionals who are early in their venture careers and are hired for two years by a Michigan-based venture firm, with the expectation that they will continue at the firm following the fellowship period. The candidates, who demonstrate a tie to Michigan and an interest in building a venture career here, are directly involved with the venture fund’s portfolio companies.  In the past five years, the number of VC investment professionals in Michigan has increased 39% compared to a 13% decrease in professionals nationally.

 
MVCA member Michigan Accelerator Fund used the Venture Fellows Program to hire Dr. Linda Chamberlain, a move that has benefitted the firm as well as its portfolio companies and LPs.

MVCA piece - Annual Awards Dinner
“The Venture Fellows Program sponsored by the MVCA, has been tremendously useful for us. As a smaller, first-time fund, we are constrained by staffing. Being able to have a venture fellow, particularly of Dr. Chamberlain’s experience and perspective, has made a world of difference,” said Dale Grogan, managing director of Michigan Accelerator Fund. “We now have the ability to reach more broadly for deals, to conduct deeper due diligence, and perhaps most importantly, to maintain continuous engagement for all of our portfolio companies. The translational benefit for our LPs is that we can invest with greater confidence based on our own efforts – as compared to being simply follow-on investors – and enhance our position into the leadership position as investors.”

 
Jared Stasik is a Michigan native who returned to the state to work with MVCA member Detroit Venture Partners, another firm that has participated in the Venture Fellows Program. He explained: “The MVCA Venture Fellows program opened the door for me to return to Michigan and be part of the emerging venture scene in Detroit. One great benefit of the program is the connections to other fellows and their firms.  These connections have helped strengthen the relationships between funds in Detroit, Ann Arbor, and West Michigan, creating a more unified venture landscape in our state.”

Jared Stasik
Angel Network Growth Program
Through over 40 awards made to six Michigan angel groups, the Angel Network Growth Program has directly supported efforts to attract more angel members and enhance deal flow. The Angel Investment Group Seed Program offers funding for administrative expenses to angel groups that invest in a Michigan-based startup company; in 2013, there were 116 active angel-backed companies in Michigan, a 137% increase in the past five years.

 
Jody Vanderwel, who leads the Grand Rapids-based Grand Angels said, “The Angel Growth Program has made it possible for Grand Angels to improve its due diligence process, upgrade some of its equipment, and increase its administrative support.  Those things have led to better investment decisions and new members.  We appreciate MVCA’s support of angel investing.”

 

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July 2, 2013 @ 7:17 am

Public Hearing: Amending Pure Michigan Venture Match Fund Guidelines

The Michigan Economic Development Corporation (MEDC) invites you to the Public Hearing on Amending Pure Michigan Venture Match Fund (PMVMF) Guidelines to be held at the MEDC (300 N. Washington Sq, Lansing, 48913) from 2-4 p.m. on July 17th at the Lake Superior room.

 

The MEDC is looking for comments and suggestions on how to improve the Pure Michigan Venture Match Fund Program and would immensely appreciate your feedback. If you are not able to make it in person, please send your thoughts via email: PMVMF@michigan.org.

 

Below is a summary of the proposed changes. The notice is live on the website as well.

 

The PMVMF Program has been in effect for over a year, during which time the MEDC Staff has been able to test some of the assumptions in the guidelines. The investment community and companies have also provided significant feedback, all of which are incorporated in the topics to be discussed in at the public hearing.

 

·         JEC: Under the MCL 125.2088k(3)(a), which was effective May 30, 2012, all evaluations must be performed by a JEC. Staff recommends receiving public comments for changing the current evaluation requirement from independent third party peer review to JEC.

 

·         Eligible round size: Currently companies are eligible to apply for PMVMF only if they have raised $3 million or less in investments prior to the PMVMF application and are raising no more than $3 million in the round in which the PMVMF is asked to participate. Staff proposes increasing the current prior investment ceiling and current round maximum investment amount eligibility.

 

·         Catch-Up Awards: Staff proposes allowing a catch-up award for those companies that did not receive the maximum award amount under the PMVMF. If a company is awarded with less than $500,000, the company will have the opportunity to apply for the remaining balance by providing a supplemental term sheet to the initial term sheet. The “Catch-Up” will match the same terms as the investors as provided in the supplemental term sheet, including equity and convertible bridge loans. The Catch-Up Awards will not be reviewed by the JEC and may be approved by the MSF Fund Manager.

 

·         Follow-on-Fund Awards: Companies will have the opportunity to submit multiple applications for a Follow-On investment out of the PMVMF so as long as the combined investment amount does not exceed $500,000. The Follow-on investment will follow the same participation guidelines as the initial investment and will match the same terms as the investors, including equity and convertible bridge loans. Follow-on-Fund Awards will follow the standard process as initial awards approved under the PMVMF Guidelines.

 

Notice of Public Hearing for July 17, 2013

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June 10, 2013 @ 7:12 pm

Mercatus Introduces FICO Score Equivalent for Energy Projects, Raises $2M Series A

Ann Arbor-based Augment Ventures was part of a recent $2 million Series A investment in Santa Clara, Calif-based Mercatus.  Mercatus offers Origination and Syndication Management for the energy project finance industry, helping investors make asset-class portfolio decisions.


Of the investment, Augment Ventures founder and managing director Sonali Vijayavargiya said, “Mercatus is well-positioned to transform analytics for distributed energy generation projects by delivering consistent, traceable and measurable metrics to investors and project developers. Rapid deployment of Mercatus will bring standardization to the investment process and documentation, resulting in faster capital allocation, increased return on capital and much needed liquidity to the sector.”

 

As distributed generation projects eclipse utility-scale, investors turn to Mercatus for a single point of truth

Santa Clara, Calif. – June 10, 2013 – Mercatus, Inc., a provider of Origination and Syndication Management for energy investors, today announced that it has raised a Series A funding round totaling more than $2 million. Led by Vision Ridge Partners, the round includes investment from Augment Ventures and Shah Capital. Since its 2009 inception, Mercatus, formerly SCS Renewables, has assessed over 3.2 GW of solar projects, while enabling $250M in investments and transactions. It currently serves more than 40% of the U.S. commercial and utility solar markets and counts the industry’s top global developers, institutional investors and independent power producers as customers.

 

“Today’s distributed energy industry is facing a significant challenge: how to rapidly deploy capital to projects,” said Reuben Munger, Managing Partner at Vision Ridge Partners. “By applying best practices and standardization to this critical piece of the value chain, Mercatus is accelerating fund decisions and enabling the creation of effective pooled investment vehicles.”

 

The Industry’s First FICO Score Equivalent for Energy Projects

The energy world has seen massive shifts in the last 12 months. While cost of technology and installation have fallen dramatically, one factor has remained constant—the high cost of financing. Developers, tasked with originating bankable projects, are failing to attract capital as evidenced by abysmal closure rates of 3-5% annually. And energy investors, lacking the resources, best practices and in some cases, domain expertise, to make expedient decisions are simply not deploying capital.

 

To solve this gap between the two worlds, Mercatus introduced Origination and Syndication Management. Based on four years of due diligence and transactions with 40 of the top U.S. financial organizations, the Mercatus platform translates those key investment and underwriting criteria into the first consistent and common language for developers and investors to assess, appraise and ultimately syndicate project portfolios. Developers simply load project information onto the Mercatus platform and 48 hours later, the project receives the industry’s first FICO score equivalent, which is visible to developers and investors alike. The Mercatus platform is based on a proprietary appraisal methodology that rates eight key categories, which provides a holistic assessment of each project’s economic and risk profile and acts as a single point of truth for investors as they race to find the best projects. Developers, who once struggled to understand investors’ criteria for bankability, now have a transparent view of what makes a project financeable, while energy investors looking to find the best projects first depend on the Mercatus FICO-like score to accelerate decision-making and reduce diligence inefficiencies for optimal aggregation and syndication.

 

“As Wall Street begins to eye the industry as an emerging asset class, a sophisticated solution for end to end Origination and Syndication Management is needed to help the industry reach its full potential, both as a mainstream source of distributed generation and a viable asset class,” said Haresh Patel, CEO of Mercatus. “Our comprehensive solution slashing financing costs of energy projects by up to 50% and provides a bridge for more than $35T of institutional investment into energy infrastructure projects.”

 

About Mercatus

Mercatus is a leading solutions provider for the energy project finance industry, offering Origination and Syndication Management for investors looking to making asset-class portfolio decisions.  Answering the call for deal standardization, Mercatus has introduced the energy industry’s first project appraisal —or single point of truth—of each project’s risk and reward score. Mercatus’s new standardized approach to the appraisal, aggregation and syndication of individual projects provides the critical transaction interface the buy and sell sides have been waiting for. Please visit us at www.gomercatus.com.

 

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Media contact:

mercatus@missionCTRLcommunications.com

415-601-9645

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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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February 13, 2013 @ 8:41 pm

InvestMichigan! Program Co-Managers Beringea And Credit Suisse’s Customized Fund Investment Group Announce The $180 Million Michigan Growth Capital Partners II, L.P.

DETROIT —Beringea and the Credit Suisse Customized Fund Investment Group (“CFIG”) have launched Michigan Growth Capital Partners II, L.P. (“MGCP II”), a $180 million fund dedicated to providing growth equity to Michigan companies.  The new fund follows on the success of Michigan Growth Capital Partners (“MGCP”), L.P., launched in 2008 as part of the $300 million InvestMichigan! Program.

MGCP II will provide equity capital to growth-oriented businesses, led by talented managers at or near profitability.  Prospective businesses may participate in a range of dynamic sectors, including but not limited to: advanced materials and manufacturing, health care and life sciences, media and communications, specialized consumer goods, homeland security, IT and clean technology. The fund’s objectives include providing a compelling return to investors, retaining and attracting growth businesses to Michigan; nurturing portfolio companies at each phase of development; enhancing Michigan’s reputation for entrepreneurship; attracting leading regional and national private equity and venture capital investment funds to Michigan, and further developing Michigan’s entrepreneurial ecosystem.

MGCP co-managers Beringea and CFIG have reviewed more than 1,200 deals since the InvestMichigan! Program’s inception in 2008.  MGCP has invested in 28 companies employing more than 5,000 in Michigan.

For more information on the Michigan Growth Capital Partners II and the InvestMichigan! Program, please visit www.investmichiganfund.com.

About Beringea

Beringea, Michigan’s largest and most active expansion-stage capital investor, offers advice, guidance and capital to support growing businesses. With offices in the U.S. and UK, Beringea’s award-winning team offers its portfolio companies the resources to develop strategy, evaluate growth opportunities, and build value in a range of sectors, including health care and life sciences, clean technology, advanced manufacturing, media, Internet technologies and specialized consumer products. Beringea is the co-manager of Michigan Growth Capital Partners Funds and the Michigan Growth Capital Partners Mezzanine Fund in the U.S., as well as the ProVen VCT family of funds in the UK, among others.

www.beringea.com.
About the Customized Fund Investment Group

The Customized Fund Investment Group is one of the world’s leading managers of private equity investment programs, with approximately $29 billion of client commitments under management.  CFIG’s team is comprised of over 120 professionals, and the group’s senior investment professionals have extensive backgrounds in managing private equity portfolios at leading public and corporate pension plans. Credit Suisse’s extensive transaction experience, which includes coverage of many top-tier private equity sponsor groups, facilitates CFIG’s access to and analysis of many leading fund investment and co-investment opportunities. CFIG seeks to facilitate access to top quartile private equity managers and will bring its institutional expertise and due diligence capabilities to bear in constructing well-developed private equity portfolios for its clients. CFIG manages or co-manages over $625 million of capital dedicated to investing in Michigan including the Invest Michigan Growth Capital Fund, Invest Michigan Mezzanine Fund, Venture Michigan Fund and Michigan 21st Century Investment Fund.

www.credit-suisse.com

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January 4, 2013 @ 12:06 pm

VC Journal Needs Entrepreneurs And Investors For Story On Autonomous Car

VC Journal is writing a story for early 2013 about the arrival of the autonomous car, and its future impact on the U.S. automotive industry. They need entrepreneurs and investors who are working or investing in technologies in this space and who can speak to its impact on private transportation, Detroit, the global auto industry and the EV industry.

If you are interested in being a source, please send an email to jenn@jenncornell.com. Contact info is needed by Monday, January 7 at 8 p.m.

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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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January 10, 2011 @ 12:19 pm

POLITICO: “Michgan hopes tech will help recovery”

Mich. hopes tech will help recovery
By: Jennifer Martinez
January 6, 2011 04:36 AM EST

http://dyn.politico.com/printstory.cfm?uuid=580D7924-A87A-987A-F380BB469A0AEE3C

Michigan is best known for making cars, but the state’s technology sector is gaining clout thanks, in part, to local and national politics.

Michigan’s own Rep. Fred Upton has become one of the most powerful lawmakers on technology policy. As the new chairman of the influential House Energy and Commerce Committee, Upton plans to kick off his tenure by leading the charge of Republicans seeking to repeal the Federal Communications Commission’s Net neutrality order.

Another Michigan Republican, Rep. Dave Camp, is slated to chair the House Ways and Means Committee, which handles tax issues that affect large high-tech corporations and entrepreneurs. Tax incentives for small-business entrepreneurs and research-and-development tax credits will be among the items under Camp’s purview.

Michigan certainly won’t have the political pull of other tech-focused states such as California. But by attracting investors and entrepreneurs, it is hoping to generate a new tech-focused economy that will help cities like Detroit recover from the collapse of the auto industry.

“The state itself has been very aggressive and understanding of the importance of technology to an economy that needs help,” said Mark Heesen, president of the National Venture Capital Association. “If you look at folks coming into power, … there’s this understanding that technology for the state of Michigan and their districts is an important consideration.”

New state-run initiatives may be on the horizon now that a former tech executive is at the helm. Michigan’s new governor, Rick Snyder, previously served as president and chief operating officer of computer-maker Gateway and went on to start two venture-capital firms in Ann Arbor. He served as an interim CEO at Gateway in 2006.

Venture capitalists are particularly bullish about the growth opportunities for biotech, medical devices, clean tech and battery technologies.

Additionally, the U.S. Patent and Trademark Office plans to build the agency’s first satellite office in Detroit this year, a move intended to help the agency tackle its backlog of more than 700,000 patent applications. The agency said it selected Detroit because of its proximity to major research universities, large community of scientists and engineers and high number of patent agents and attorneys.

Still, Michigan is far from becoming a tech powerhouse like California, said TechAmerica Executive Director Ed Longanecker.

“Silicon Valley is its own unique environment, and other areas aspire to have that same [venture-capital] environment and that same network of companies,” said Longanecker, who runs TechAmerica’s Midwest office. “It’s taken a long, long time to develop, and I don’t think Michigan [is] anything close to becoming Silicon Valley, but I certainly think there are some positive things happening that will help diversify their economy.”

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April 26, 2010 @ 10:21 am

Where Did Venture Capital Came From in 2009?

Get an inside look from VentureWire at high-tech start-ups and their investors.  Click on the link below to read this informative article written by Keenan Skelly, a Wall Street Journal Blogger.

http://blogs.wsj.com/venturecapital/2010/04/16/where-venture-capitals-money-came-from-in-2009/?blog_id=106&post_id=5782

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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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