The Michigan Venture Capital Association’s (MVCA) 2017 research report has good news for entrepreneurs and investors alike, showing growth both in the number of venture-backed startups and the number of venture capital investment professionals working in the state.
MVCA is an Ann Arbor-based nonprofit whose membership includes 341 investment and entrepreneurship professionals from 95 different organizations. MVCA executive director Maureen Miller Brosnan says the most critical number in MVCA's 10th annual report is 141. That's the number of Michigan companies that venture capital firms backed in 2016, an increase of 48 percent over the past five years.
The report also shows that 54 startups received more than $222 million from Michigan venture capital firms last year, a 42 percent increase over the past five years. Brosnan says these continual increases show that Michigan has a vital, growing venture capital community, unlike other states where venture capital is shrinking.
She says venture firms in Michigan are backing startups in the sectors of information technology, life science, medical devices, and manufacturing.
"These are the types of investments in startups that produce some of the highest paying jobs in Michigan," Brosnan says.
And Ann Arbor is ground zero for many of those high-tech and life science startups.
"Ann Arbor continues to be the largest area for venture capital and startups throughout the state, with Detroit and Grand Rapids running neck and neck for second," Brosnan says. "Ann Arbor continues to lead the way, especially in healthcare and life sciences. A lot of that is coming out of the University of Michigan because they do a lot of research in that area. Their Office of Technology Transfer is very well connected with the venture capital and angel investor communities."
Brosnan says Michigan’s profile is so high in the U.S. venture capital community that for every dollar invested in startups by Michigan-based venture capital firms, $4.61 is attracted from out of state.
That’s a sign that Michigan venture investors are looked at as leaders in the field and experts on recognizing great ideas when they see them, Brosnan says.
"An investor from out of state feels more confident knowing there’s a Michigan partner at the table, and people are confident with the resources in Michigan to sustain growth in startups," she says.
The full 2017 report is available here.
Sarah Rigg is a freelance writer and editor in Ypsilanti Township. You may reach her at firstname.lastname@example.org.
All images courtesy of Michigan Venture Capital Association.