MEDC Funds Venture Capital Firms
LANSING—Local companies in the life sciences and health care industries may be able to apply for funding from two new southeast Michigan venture capital firms next year.
The Michigan Economic Development Corp. recently awarded $600,000 to Arboretum Ventures of Ann Arbor and Accelero Capital Partners of Farmington Hills to help launch new funds. Each firm received $300,000 from the Michigan Capital Growth Fund.
“There is an abundance of quality research coming out of Michigan’s universities, yet the number of new companies being created around that research is relatively low,” said Doug Rothwell, MEDC president and CEO.
“The creation of these new funds will provide more venture capital aimed at the seed and early growth stage of company development, which is so needed in Michigan,” he added.
Michigan companies received nearly $129 million in venture capital last year, but only $15.4 million of that total, or 12 percent, went to seed and early-stage firms.
Rothwell said Arboretum and Accelero are committed to raising $25 million and $20 million, respectively, within 18 months.
“Our input of $600,000 is going to stimulate the creation of at least $45 million in new capital to help launch life sciences and health care companies,” he said.
The state money comes from the Michigan Growth Capital Fund, supplied with a one-time $5 million appropriation to encourage public and private investment in the state’s technology business sectors.
“We will provide the next step to many of the technologies funded by the Michigan Life Sciences Corridor, and expect to contribute toward building a critical mass of successful life sciences companies in Michigan,” said Jan Garfinkle, managing partner of Arboretum.
“Despite the economic strength of Michigan companies and the incredible pool of talent, there is not enough capital to support their development,” said Rajesh Kothari, managing director of Accelero. “We are confident that Accelero can help fill that gap.”