Back to Blog January 30, 2015 in

MVCA Co-Hosts Michigan Investment Landscape Meeting

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Amid the quickly transforming skyline of downtown Detroit, DTE Energy, Kresge Foundation, Michigan Venture Capital Association, NEPC, University of Michigan and Renaissance Venture Capital Fund of Funds welcomed Michigan institutional investors and general partners across the capital continuum for the Michigan Investment Landscape Meeting.  The meeting highlighted the dense network of Michigan organizations that work across the enterprise growth spectrum, from idea-stage concepts to mature companies.  “This is our first attempt at getting our arms around the investors and support networks that are integral to entrepreneurial businesses in Michigan,” said Maureen Miller Brosnan, Executive Director of the MVCA.  “It’s a chance for Michigan LPs to gain a better understanding of the many opportunities for alternative asset investment in their own backyards.”

Rob Manilla, Vice President and Chief Investment Officer of Kresge Foundation and Planning Committee member, was critical to bringing together the state’s institutional investment community for this meeting.  “In May, MVCA presented its annual research report findings and it was clear Michigan LPs craved more insight into the Michigan venture and growth capital landscape. We’re grateful they were able to help provide us with this opportunity for education and information sharing.”

Tom Kinnear, President and Chair of the Venture Michigan Fund, and Chris Rizik, CEO of the Renaissance Venture Capital Fund of Funds, gave a overview of the investment landscape in Michigan.  The pair addressed the rise of the venture capital community in Michigan, the breadth of sectors receiving venture funds, and the rich variety of professional resources to support fast-growing Michigan companies.

Two elements that make Michigan an attractive place to grow a business were highlighted: access to technology and talent.  “From an engineering standpoint, there’s no better place in the country to find talent.  Our challenge had been in attracting C-level talent.  In the past it was difficult to pull talent into early stage companies because they were already ensconced in the automotive industry,” said Rizik.  “But with the growth of entrepreneurship nationally, the strengthening of the entrepreneurial support system locally, and a culture change that has been ongoing in Michigan for the past decade it’s become much easier to recruit strong talent.”

“Importantly, we have an investment infrastructure now; MVCA has more angel and venture capital members than ever before, and it’s a number that has gone up steadily.  Years ago there wasn’t a venture community, beyond a few firms talking occasionally on the phone.  Now there is a significant network, and promising start-ups have multiple firms to talk to.  Michigan has truly become the envy of the Midwest in terms of our entrepreneurial ecosystem.”

Tom Kinnear, Chairman of the Venture Michigan Fund, raised another attractive feature of Michigan investing: low cost of capital.  “As an investor, I can tell you that the pre-money valuations tend to be better in Michigan than on the coasts.   There’s not a lot of the “silly pricing” you tend to see in a market where there’s massive amounts of competition for a deal.”

Later in the meeting, Plymouth Ventures Managing Director, Mark Horne, echoed that sentiment.  “We (Michigan-based venture investors) can get in at Midwest valuations and exit at national valuations.  You can’t discount the impact that has on our returns.”

Attendee Dennis Johnson, Chief Investment Officer for Comerica Bank, is more focused on venture capital after a recent spike in bank clients with intriguing business plans who need early-stage capital.  “We’re trying to figure out how to connect our clients with the capital they need.  I’m hoping this meeting will put me in contact with some potential partners that might help us better involve Comerica in the venture community in Michigan.”

“While all indications point to the long-term viability of the entrepreneurial ecosystem in Michigan, we still have work to do in establishing Michigan as the state where growth-oriented businesses advance further, faster,” said Jim Adox, MVCA Chairman.  “It’s gatherings like the Michigan Investment Landscape Meeting that allow us to share our strengths and build the relationships necessary to move more Michigan businesses forward, create new and better jobs, and help redefine our economy.”