MVCA and professionals from Michigan’s venture community met with legislators Wednesday to examine the Michigan Venture Capital Association’s (MVCA) Annual Report on venture capital activity in Michigan.
“This year’s in-depth analysis of venture capital activity in the state indicates a steady and consistent trend of success in Michigan,” said Maureen Miller Brosnan, executive director of MVCA. “The number of investors, the amount invested in Michigan-based companies, and the number of successful, active angel- and venture-backed companies located and hiring in Michigan are all trending upward, showing significant increases in the last five years.” The 2015 Report also examines venture activity in specific geographic regions of the state, which was particularly relevant to the legislators in attendance. “Venture investing has an impact on every geographic region in our state, and those of you elected to represent these areas can see that high-paying jobs and economic development come with venture capital activity in your communities,” Brosnan said.
Representative Joe Graves (R-Argentine Township), Chairman of the Trade and Commerce Committee, attended the event with staff member Matt Sowash and discussed Michigan’s venture investing environment with MVCA Board Chair (and managing director of Venture Investors) Jim Adox. “Michigan’s venture capital community has grown tremendously in recent years; just last year, the $219 million invested in venture capital in Michigan was a 97% increase over the year before. It was rewarding to relay the great opportunities we see as investors in Michigan with Chairman Graves, who is so highly in tune with Michigan’s commercial and economic issues,” Adox said.
Richard W. Chylla, Ph.D., Executive Director of MSU Technologies, explored the relationship between MSU research and development and Michigan’s venture community. “Michigan State spends $526 million per year on research, and at least 150 innovations come from the university every year. Those new technologies fuel the startups that Michigan’s angel and venture community eventually fund.” Chylla implored legislators to continue supporting innovation and entrepreneurial endeavors at the university level, especially the entrepreneurial studies programs that serve students who demand a way to explore their entrepreneurial passions while still working toward a degree.
About the Report’s Findings
Venture capital and angel investment in Michigan continues to contribute to the state’s economic recovery, according to the report. The in-depth analysis of venture capital activity in the state indicates a steady and consistent trend of success in Michigan’s entrepreneurial economy. The number of investors, the amount invested in Michigan-based companies, and the number of successful, active angel- and venture-backed companies located and hiring in Michigan are all trending upward, showing significant increases in the last five years.
Notably, the report also forecasts a disparity between the demand and the amount of venture capital available for new and follow-on investments in Michigan startups. Founders typically locate and keep their businesses geographically near the sources of the capital they need for growth.
“We’ve spent more than a decade building a venture capital community in Michigan that can support the state’s extraordinary startup companies and contribute to the diverse economy that is crucial to the state post-recession. We’re now at a point where, despite significant increases in venture capital under management at Michigan-based venture firms, it’s still not enough to meet future funding demands by Michigan startups,” said Brosnan. “In order to continue to have a positive impact on our economy, we must ensure Michigan-based venture capital firms are able to grow their available capital while at the same time able to attract out-of-state venture firms to invest more in Michigan.”
Key highlights of the 2015 MVCA Research Report include:
- There are currently 129 venture-backed companies in Michigan, a 70 percent increase in the last five years.
- Michigan venture capital firms invested in 97 percent of all Michigan startups that received any venture capital in 2014.
- Last year, Michigan-based venture capital firms had $1.7 billion in capital under management, an increase of 45 percent in the last 5 years.
- Fifty one companies in Michigan received more than $204 million from Michigan venture capital firms in 2014. This is an 89 percent increase in the last five years.
- The number of venture capital investment professionals living, working, and investing in Michigan has increased by 98 percent in the last five years.
- The number of venture firms with an office or headquarters in Michigan has increased by 48 percent in the last five years.
- There are currently 214 startup companies in Michigan that have received funding from a Michigan angel group, a 206 percent increase in the last five years.
- In 2014 there were nine Angel Groups in Michigan with 272 Active Angel Investor Members, a 45 percent increase in membership in the last five years.
About The Michigan Venture Capital Association
The Michigan Venture Capital Association (MVCA) is a non-profit trade organization designed to bring together venture capital industry experts in the state of Michigan. The organization’s goal is to grow and sustain a vibrant venture capital community in Michigan. MVCA membership includes private and corporate venture capital funds, angel investors, universities and economic development participants, and service providers. More than 400 individuals are members of MVCA, representing over 100 organizations across the nation. www.MichiganVCA.org