Michigan is a goldmine of funding for new start-up businesses, despite a dip in such giving nationally, according to the Michigan Venture Capital Association.
The group found in its annual research report that the Great Lakes State jumped to 15th-best state in the nation for venture capital activity, up from 25th a year ago. That means investors who underwrite start-ups are heaping millions of dollars in new companies in fields like information technology and the sciences.
That comes even as total national capital investment declined 10 percent, year-over-year, to $26.5 billion.
“The data reported in MVCA’s research report tell a compelling story about Michigan’s success in growing and nurturing an innovation-based economy,” Carrie Jones, MVCA executive director, said in a release. “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.”
There are 29 venture capital firms doing business in Michigan, backing 106 companies, the report showed. In 2012, venture capital firms invested $242 million in 33 deals in Michigan.
“I think all the good things that need to be happening are,” Jones said. “We have a great ecosystem here. An entrepreneur can find anything they need, from incubators and accelerators to support from the state to great local talent.”
Kaylan Handique directly benefited from venture capital funds.
Handique, president and CEO of Plymouth-based Devnovo Science, a cancer research and diagnostics start-up, got $1.75 million from in-state investors for his company’s research.
“We were very fortunate to be able to get that money,” he said. “It helped us execute our business plan.”
Without the funding, Handique said his company may not be in Michigan.
“We would have looked elsewhere,” he said.
As Michigan produces more and more entrepreneurial success stories, Jones said, the venture capital funding will continue to increase.
“We’ll see more investors look to bring capital into the state because they’re seeing more successful deals being done here,” she said.
The entire Midwest region remained relatively stable over the last three years, according to the report, although the amount of dollars invested is up in Michigan and Ohio. Jones expects that to continue.
“Attracting outside investment to Michigan infuses the economy with new money that can help a company grow here,” Jones said. “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.”
Michael Martinez, Detroit News.
