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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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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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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April 19, 2013 @ 1:33 pm

The Road Less Traveled: Detroit Venture Partners Pursues “Crazed Mission” to Back Purpose-Driven Entrepreneurs

 

Detroit Venture Partners

Ask Josh Linkner what’s got him, and the team at Detroit Venture Partners, fired up, and you’ll get a simple response: Detroit.  The VC firm’s “crazed mission” is to back companies that are committed to rebuilding the Detroit area by entrepreneurship.

 

We view business building as a palette for creative expression and an opportunity to make a difference and change the world. If not, why bother,” explained Linkner, who is managing partner of Detroit Venture Partners.

 

Linkner and the Detroit Venture Partners team aren’t shy about getting in the trenches to make sure these world-changing businesses succeed.  “We are willing to get down and dirty with our entrepreneurs in order to drive results. We look at venture investing as a full-contact sport, and are ready to do whatever it takes to help our portfolio companies win. You’ll find us hands-on and deep behind enemy lines while other VCs are enjoying their French-vanilla, no-whip, mocha frappuccinos.”

 

Detroit Venture Partners’ commitment to entrepreneurial warfare has helped the firm achieve a key goal to re-establish Detroit as a beacon of innovation and entrepreneurship.  “We’ve led the way and set a path for others to come invest in Detroit, and for startup leaders to build their businesses here,” Linkner said.  “We believe that this region has tremendous untapped potential and this last year was about laying the foundation to harness it.  With the groundwork in place, Detroit is now poised to take off as one of the most important startup cities in the country.”

 

The firm’s investment portfolio is a telling reflection of Detroit Venture Partners’ commitment to backing entrepreneurs who are making their mark in the Detroit area… and beyond.  Over the last year, it’s invested in several exciting Detroit-based companies, including:

 

  • LevelEleven, a company that develops enterprise gamification and CRM solutions that help sales and other managers keep their teams focused on the right things. The company’s flagship product, Contest Builder, is a salesforce.com app that gives companies new ways to motivate salespeople to make more calls, book more meetings, and close more business, which in turn spikes adoption of Salesforce.
  • Chalkfly, which is becoming known as the ‘Zappos for office supplies.’ It offers 50,000 products, 24/7 customer services, free over-night shipping, and a 365-day return policy. Most importantly, Chalkfly gives 5 percent of all sales directly to teachers in your local community.
  • iRule, LLC, a cloud software company offering a platform for the connected home and home entertainment control. iRule’s control and automation software, available for both iOS and Android, is loved by its customers for its functionality, versatility, and value, and is sold by professional dealers in 50 countries.

Linkner is careful to point out that Detroit Venture Partners’ “crazed” mission is really rooted in a common sense, practical approach to investing.  “Michigan offers real advantages to other locations,” he said.  “The state, and the Detroit area in particular, are ripe with top talent that are attracted to what’s unique here: Affordable housing, and accessibility to business leaders and networks.  Plus, there’s a low cost of doing business here that makes an investment go far.”

 

While pursuing their favorite pastime of changing the world’s mind about VC opportunities beyond the coasts – and in Detroit, specifically – Detroit Venture Partners will continue to work hard at being an illustration of all that’s going right here. “We’re excited to add eight to 10 more companies to our portfolio this year,” Linkner said.  “While we continue to grow, we’ll continue to work deep in the trenches with our existing companies to help them win.”

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March 21, 2013 @ 1:07 am

Plymouth Management Co. Focuses on Regional Growth

Plymouth Management Company, an Ann Arbor-based VC, focuses on Great Lakes growth-stage opportunities, but does not focus on a particular segment.  It’s a strategy that has helped the firm carve out a niche in helping growth-stage companies across a wide range of industries.

 

“We look for any regional company that is growing or shows strong growth potential,” explained Plymouth Management’s principal Mark Horne.  “Information technology, software services, telecom, advanced manufacturing and medical devices have all been attractive investments for Plymouth; we want to back companies that have the innovation and talent to succeed.”

 

Plymouth’s broad view is enabled by the firm’s management team, which includes Michigan VC pioneer Ian Bund as well as Jeff Barry and Kevin Terrasi.  Combined, these leaders have an impressive track record of building and exiting growth stage companies, as well as a unique blend of financial and operational experience.

 

The firm’s management is able to support and structure deals in a way that sets it apart from other VCs– and helps Plymouth take advantage of opportunities that might not fit with other VC firm’s charters.

 

“Because we focus on regional, growth-stage companies versus a specific industry sector, Plymouth can look at a wide variety of potential investment companies,” Horne explained.  “This flexibility carries over into our deal structures that can be tailored to the specific needs of the entrepreneur.  Our deal terms can be quite creative.  We are minority investors who insist on strong corporate governance, but we have a negotiating style that is decidedly win-win.”

 

This past year was a banner one for Plymouth, which invested in seven companies – four in Michigan, one in Ohio and two in Illinois – through the $41 million fund it raised in 2011.  Plymouth’s recent Michigan deals included Lynx Network Group in Kalamazoo and FutureNet Group in Detroit.

 

Plymouth’s multi-stage investment in Lynx Network Group is helping the company build a new 2,500 mile 4G/LTE fiber project across Michigan, in conjunction with Department of Commerce and the Merit Group.  This “data railroad” will connect businesses and promote further economic development throughout the state.  Its investment in FutureNet, a rapidly growing construction, security and IT business, helped the company acquire a division of Smith & Wesson.  The acquisition is expected to propel the business to more than $100 million in revenues by the end of this year.

 

Horne and his team at Plymouth are finding that their home base in Michigan is a significant advantage.  “Michigan continues to be an underserved market,” he said.  “Unlike the coasts, there are more ideas here than capital.  In Michigan, VCs have tremendous choice between the best deals. Deal flow quality continues to be very good for our firm, and we expect we will near full fund deployment by the end of this year.”

 

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July 11, 2012 @ 7:45 pm

MVCA Programs to Attract Investment, Entrepreneur Talent Gaining Traction

FOR IMMEDIATE RELEASE – JULY 11, 2012 — ANN ARBOR, MICH. — The Michigan Venture Capital Association’s (MVCA) programs to develop the state’s investment community are helping venture capitalists and their portfolio companies attract and retain top talent.

 

As part of its Michigan Venture Fellows Program, MVCA recently placed fellows at member firms Detroit Venture Partners and Open Prairie Ventures.  The organization also awarded funding for CEO Placements to ArborMetrix, a firm backed by MVCA member Arboretum Ventures, and ProNai Therapeutics, backed by MVCA member Apjohn Ventures. MVCA member firms Plymouth Ventures and RPM Ventures received funding through the Executives in Residence program.

 

“Finding, recruiting and developing top talent is a critical need for both investment firms and their portfolio companies,” said MVCA board chair and Arboretum Ventures managing director Tim Petersen.  “MVCA’s programs to help VCs and venture-backed companies fill a void while shining a light on the opportunities that exist in our state for both investment professionals and C-level talent that want to work for entrepreneurial ventures.”

 

The MVCA’s Michigan Venture Fellows, CEO Placement and Executives in Residence programs are funded by the Venture Upstart II allocation from the Michigan Economic Development Corporation (MEDC). The Michigan Venture Fellows Program is intended to create the next generation of venture capitalists and investment professionals in Michigan.  The Executives in Residence and CEO Placement programs are designed to support the eventual placement of an executive into a portfolio company’s operations post-investment or find and hire a qualified CEO candidate for a portfolio company.

 

Jared Stasik, a recent graduate of UC-Berkeley, and Sam Hogg, former director of venture development at NextEnergy, are participating in the MVCA Fellows program.  Stasik is joining Detroit Venture Partners and Hogg is joining Open Prairie Ventures.

 

ArborMetrix and ProNai Therapeutics received funding CEO Placements awards from MVCA.  The funding will be used to execute CEO searches, which both firms are currently conducting.

 

Plymouth Ventures welcomed Kevin Terrasi and RPM Ventures welcomed Kurt Skifstad into their firms for a period of deal sourcing and advisement, with an ultimate goal of placing these executives in a leadership role at a portfolio company.  Terrasi and Skifstad both bring operational experience to their venture firm sponsors.

 

Michigan venture capital firms participating in the Michigan Venture Fellows program receive assistance in hiring an associate.  Michigan venture capital firms may apply for a loan award to assist with the first year salary of an Executive in Residence or a CEO for a Michigan-based portfolio company.  The CEO Placement loan award may also be applied toward the recruiting fees incurred in finding an entrepreneurial CEO.

 

About the MVCA
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.  www.michiganvca.org

 

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November 30, 2010 @ 4:25 pm

MVCA Talent Committee charting course for talent retention, growth

Members of the MVCA Talent Committee are preparing for a busy 2011.  Among the group’s initiatives–sustaining the EIR/CEO Placement program, creating a new MVCA Fellowship program aimed at recent advanced degree graduates of in-state universities, and continuing the popular “Super HotShots” talent recruiting night.

MVCA Talent Committee

MVCA Talent Committee Members Jim Adox, Amy Cell and Tim Petersen

The committee members include:  Jim Adox, Venture Investors; Amy Cell, Ann Arbor SPARK; Tim Petersen, Arboretum Ventures; and Jeff Barry, Plymouth Management Partners.

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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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