State Gets Funding Boost In Invest Michigan Program

September 24, 2008
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While Michigan may not be known for venture funds, a new program released by the governor is helping to change that.

The Invest Michigan! program totals $300 million and will be divided equally between a Growth Capital Fund focusing on venture capital and expansion-stage companies as well as a Michigan Opportunities Fund targeting potential acquisitions and buyouts.

The program, which Granholm rolled out July 31, is being invested in by the State of Michigan Retirement Systems, which had assets of more than $57 billion at the time the program was announced. The program hopes to help create jobs while adding to the total assets.

The Michigan Opportunities Fund will be managed by Glencoe Capital, and the Growth Capital Fund portion will be managed by co-general partners Beringea and Credit Suisse.

“I think it’s the state’s way of continuing to support entrepreneurial growth in the area,” said Chris Ahn, a director at Beringea.

“What we have is a very good source of venture capitalists in the state that are maybe doing earlier stage type of investing. When companies need growth capital, very often times they have to look elsewhere — meaning outside the state — in order to get that. And in most cases, companies will have to relocate because most of the venture capitalist firms want to have an oversight on those companies and be as proactive in managing them and assisting them as possible.

“This growth capital really helps keep those businesses here.”

According to the Web site, the program goals are to retain and attract growth businesses; nurture portfolio companies at each phase of development; enhance Michigan’s reputation for entrepreneurship and as an attractive location for private investment growth; and to further develop the state’s entrepreneurial ecosystem.

Collaboration will be important to help the program succeed.

“We have very much talked to a lot of different groups around as being a collegial effort — that this is a resource for traditional advisers to businesses, whether they be attorneys or accountants or even other investment banks, but also to business development and business accelerator groups around the state,” said Ahn.

“Almost every county now has an economic development office where they’re approached by companies within their county, within their city, that are either experiencing growing pains because things are going very, very well, or they want to develop a new technology, and that’s what this money is here to support.”

A Business Leadership Council has been formed to give insight to general partners. The council consists of many highly successful Michigan executives including James Hackett, president and CEO, Steelcase Inc.; and Mark Murray, president, Meijer Inc.

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