Michigan venture capital growth outstrips national averages

Venture capital in Michigan has come a long way over the last 15 years, and a new report from the Michigan Venture Capital Association puts some numbers to that growth.

The Ann Arbor-based non-profit released its annual report this week showing growth with some impressive numbers for the venture capital in the Great Lakes State. Michigan enjoyed its best year for venture capital investment in 2015, clocking $328 million. That's up from $224 million the year before (it's third best year) and $246 in 2012, its second best year. Venture capital in Michigan is up 150 percent over the last decade, according to the report.

Michigan-based venture capital firms have $2.2 billion under management, up 47 percent in the last five years and more capital under management than ever before. Michigan venture investors finance nearly every Michigan venture-funded startup. The report concludes that local venture capital has gone from practically non-existent in Michigan 15 years ago to having firmly taken root and growing steadily.

"There are a lot of factors at play at this point," says Maureen Miller Brosnan, executive director of Michigan Venture Capital Association. "Venture capital has firmly established its role in as an economic driver in Michigan."

Ann Arbor is widely seen as the capital for venture capital activity in Michigan thanks to its proximity to the University of Michigan. There is also a large concentration of local VCs headquartered in Ann Arbor and a number of out-of-state VCs with offices in Tree Town.

The report also shows a rise in angel investing in Michigan. There are currently 128 startups in Michigan that have received funding from a locally based angel group, a 42 percent increase in the last five years. Membership in Michigan’s nine angel groups hit 294 investors, a 59 percent increase in the last five years. Michigan’s Grand Angels was listed among the three most active angel groups in the country, and a new angel group in the Upper Pennisula, Innovation Shore Angel Network, launched last year, according to the report.

"Grand Angels has set the pace for growth of the nine angel groups in the state of Michigan," Miller Brosnan says. "There has been tremendous growth there."

Source: Maureen Miller Brosnan, executive director of Michigan Venture Capital Association
Writer: Jon Zemke

Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.
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