The Pure Michigan Venture Development Fund has invested $4.5 million between two Ann Arbor-based venture capital firms.
Michigan eLab and Resonant Venture Partners have each received $2.25 million from the Pure Michigan Venture Development Fund. The money originates from the Michigan Strategic Fund and is awarded by theMichigan Economic Development Corp. The money is targeting first- and second-generation venture capital funds based in Michigan. The capital is intended to help those funds raise additional funds, gain traction in the market and help grow the state’s investment community.
“It’s validation because of the review process the MEDC puts you through,” says Doug Neal, managing partner of Michigan eLab. “It’s a nice step toward our fundraising goal. We’re close to two thirds of the way to our first close of fundraising.”
Michigan eLab is a early stage technology venture fund focused primarily on IT and life science/health care companies that spin out from the University of Michigan. Neal is the executive director at the University of Michigan’s Center for Entrepreneurship. His co-founders include Rick Bolander, Scott Chou (venture capital veterans since the 1990s) and Bob Stefanski (a Silicon Valley serial entrepreneur with a number of technology start-up exits under his belt). The venture capital firm is working to bring both more seed capital and expert business coaching into the local entrepreneurial ecosystem from places like California.
“We’re not just about venture capital,” Neal says. “We are also about bringing talent back to Michigan.”
Two University of Michigan MBA graduates launched Resonant Venture Partnersin 2010 after leading the Ross School of Business’ Wolverine Venture Fund. The firm’s focus is to fill the need for early stage investments in tech companies. Its investment portfolio includes some of the region’s highest profile start-ups, such asDuo Security (an Internet security start-up that has attracted funding from Silicon Valley) and Accio Energy (an alternative energy start-up led by the CEO that built Accuri Cytometers into a acquisition worth hundreds of millions of dollars).
The Pure Michigan Venture Development Fund plans to invest in as many as two more new Michigan-based venture funds. Winning venture funds must raise additional private-sector capital amounting to at least 4.5 times the state’s investment. The Pure Michigan Venture Development Fund is currently accepting application until February 28. Applicants are required to raise at least $1 million in private capital, but not more than $25 million, from at least three unrelated investors at the time of application.
Jon Zemke, Concentrate Media.