- people on the move
Kzoo V.C. Forum Gets Serious
KALAMAZOO — Economic development group Southwest Michigan First is getting serious about its role as matchmaker between up-and-coming local businesses and the venture capital community. For four years, the group’s Kalamazoo Venture Tuesday gave participating entrepreneurs a chance to hone their sales pitches and get feedback from capital funders. Now, with a new focus and a new name, the Kalamazoo Innovation Forum is trying to match up viable businesses with real-world capital.
“We’re trying to focus on companies that are actively seeking funding, have their business plans together, and are ready to go forward,” said Southwest Michigan First CEO Ron Kitchens. “We really want to be a marketplace and not just a showcase.”
The Innovation Forum convenes six times each year, with participants attending by invitation only. Kitchens said that allows the forums to be as effective as possible. Qualified investors and venture capitalists get a chance to meet start-up entrepreneurs or established business owners looking to expand. Among the 120 attendees at the first two Innovation Forum meetings, there have been representatives of 15 venture capital firms from three states. Kitchens said that the forum has also been a useful tool in developing an area-wide network of private, “angel” investors. Participating capital funders also serve a regulatory function: They vet the firms that get a chance to present at the forums. That, Kitchens said, ensures that the busy investors are only hearing sales pitches from the firms that interest them the most. In simple terms, the new set-up is a better use of everyone’s time.
“Before, they were really information sessions,” Kitchens said of the former Venture Tuesday format. “They were really for the entrepreneur to learn how to make a pitch for their company. The venture capital firms were just there to give feedback.”
Perhaps the two most interesting aspects of the Innovation Forum have a geographically specific focus. First, there is the Southwest Michigan Life Sciences Venture Fund, a $50 million pool of venture and angel capital. Kitchens called it the largest community venture fund of its kind in the country. Second, any firm that is funded through the life sciences fund is required to relocate to southwest Michigan, or at least establish a major presence there.
And that doesn’t leave the further north reaches of West Michigan out of the equation.
“Our job isn’t to worry about geographic boundaries, it’s to improve and grow the life science cluster in southwest western Michigan,” said Kitchens. “I know that in my heart and my economic wallet that Grand Rapids, Kalamazoo and, in a lot of times East Lansing, are tied together in a life science cluster. And we can’t succeed if our partners don’t succeed.”
Although the life sciences are a major focus for Southwest Michigan First, the group is open to innovation in any field.
“We are really being very opportunistic,” said Paul Neeb, vice president of the life sciences cluster. “We’ll look at and talk to virtually anyone who has an idea that they think has any marketability. As they say, any good idea will eventually find its way to funding.”
Neeb also pointed out that along with the increase in life science business activity comes secondary business development. Some of those businesses will be related to housing, entertainment and leisure, but others may be support organizations for the life science firms. For instance, life science firms are heavily reliant on information technology. There may be an expanding market for IT firms as the life science sector grows.
“We’re going to need to grow other competencies in the region,” Neeb said. “So an important part of what I’m doing is not only helping organizations to grow, but also attracting new organizations to the area.”
That work is already underway. Kitchens said that in the next few weeks, the organization will be ready to unveil the first three or four projects being funded by the life sciences venture fund, as well as a “major relocation announcement.”
The next Kalamazoo Innovation Forum event takes place May 3. In addition to the presentations by start-ups looking for funding, there will be a panel discussion on the pros and cons of West Michigan as a place to do business, and a keynote address from author Joel Kotkin. Attendance to the event is by invitation only.
More information on the Innovation Forum and the life sciences venture fund can be found at www.southwestmichiganfirst.com.