MVCA report cites highest-ever number of deals
44 percent increase in number of venture capital firms in Michigan,
compared to a 6 percent increase nationally.
Nearly a doubling in the number of venture capital professionals in
Michigan, compared to a net 13 percent decrease nationally.
Investments into firms specializing in women’s health and medical
research yielded a significant research impact. For instance, new
companies developed an imaging model for breast exams, a novel genetic
fetal screening, and, an original approach to targeting DNA to fight
cancer and bone regeneration.
LANSING, Mich.--(BUSINESS WIRE)--
Tech entrepreneurs and enterprising investors in the life sciences and
information sectors will play an increasingly prominent role in the
Michigan economy, according to survey
results of the “early stage building” of the state’s technology
In 10 years since its formal inception, Michigan’s venture capital
community is showing growth in key measurable categories, outpacing the
national venture capital landscape during the last five years, according
to “Building Michigan’s Vibrant Future,” an annual report released today
compiled by Michigan
Venture Capital Association.
“The investment infrastructure and public-sector support is in place for
Michigan to become a top-ten venture capital state,” said Gov. Rick
Snyder. “We’re committed to maintaining the right policies, practices
and programs to further cultivate venture capital investment in
Michigan’s knowledge-based economy.”
Many of the tech startups are the result of research conducted at the
state’s world-class universities, including Michigan State University,
University of Michigan and Wayne State University, collectively referred
to as the University
Research Corridor (URC).
Despite a diminished national fundraising climate during the last five
years in which total capital under management nationally decreased by
3.5 percent, total capital under management among Michigan-based firms
increased by 45 percent, from $1.1 billion to $1.6 billion, essentially
the reverse of the national trend.
Other key survey findings in Michigan’s venture capital growth from
“Building an entrepreneurial economy takes time, and MVCA’s data shows
growth in the momentum in Michigan in both successful startups and
investments,” said Carrie Jones, executive director, MVCA. “The right
pieces are in place, from capital for early stage startups through to
second stage and growth stage companies as well as a robust pipeline of
Specific developments in 2013 cited in MVCA’s report include:
Michigan recorded $120 million in venture capital investments in 40
companies, the highest number of deals since MVCA began tracking.
Total venture capital funds under management of Michigan-headquartered
firms was $1.65 billion, an increase of 12 percent from 2012.
Angel investors showed strong support for early stage companies,
investing $9.9 million.
Three new venture firms were launched, and two national firms – Baird
Capital and Cultivian Sandbox – opened offices in Michigan.
Venture-backed Esperion Therapeutics held an Initial Public Offering
(IPO) and was added to NASDAQ Biotechnology Index, which raised
approximately $70 million.
Esperion is a biopharmaceutical company focusing on research,
development and commercialization of therapies for treatment of
elevated levels of low-density lipoprotein cholesterol and other risk
factors. The company received support from the Michigan Economic
Development Corporation through the 21stCentury Investment
Fund administered by Arboretum Ventures.
“We truly value our partnership with the venture capital community and
feel we’re in lock step in continuing to build Michigan’s tech economy,”
said Paula Sorrell, vice president of entrepreneurship, innovation and
venture capital at MEDC.
“Venture programs at MEDC improve the climate for investment and
entrepreneurial activity in Michigan,” said Sorrell. Supporting growth
of venture capital and private equity in Michigan, MEDC
has developed a range of programs to invest in early stage companies,
commercialized breakthrough technologies, along with Michigan-based
companies creating new business and jobs in the life sciences,
information technology, advanced manufacturing and homeland security.
Nationally, $29.5 billion was invested in 4,041 venture capital projects
in 2013. That marks an 8 percent increase in the amount invested, and a
5 percent increase in number of deals compared to the previous year.
Nearly half of all U.S. venture capital investment dollars occurred in
California in what accounts for about 40 percent of all nationwide
deals. The figures are based on the MoneyTree Report, compiled by
PricewaterhouseCoopers LLP, National Venture Capital Association, and
Of the record number of investments in Michigan’s venture capital
community last year, according to the MVCA report, nearly two-thirds of
the venture funds invested in the Life Science sector, primarily
composed of pharmaceutical and medical device companies. About one-third
of venture capital is invested in the Information Technology sector.
Funding stages include seed, start-up, expansion, and mezzanine. Most
deals take 7 to 10 years before profitable.
“We’re committed to building Michigan’s entrepreneurial ecosystem, and
are working with venture capital firms to help attract exceptional
talent to their firms and portfolio companies,” said Snyder. “The
Michigan entrepreneurial spirit is igniting a reimagining of the state’s
Venture-backed companies accounted for 11.87 million jobs in 2011,
according to Venture Impact, a study by IHS Global Insight. The job
figure translates to about 11 percent of private-sector employment.
is the state's marketing arm and lead advocate for business development,
talent and jobs, tourism, film, and digital media incentives, arts and
cultural grants, and overall economic growth. The MEDC offers a number
of business assistance services and capital programs for business
attraction and acceleration, entrepreneurship, strategic partnerships,
talent enhancement, and urban and community development.
National Media Contact:
Lambert, Edwards & Associates
Source: National Media Contact: MEDC