The Renaissance Venture Capital Fund issued its annual report last week, saying that it remains busy and committed to venture capital financing of Michigan businesses.
The RVCF is a venture capital fund of funds that was formed by some of Michigan’s most important organizations to profitably invest in the growth of groundbreaking Michigan technologies and companies. It provides capital that will increase entrepreneurial activity and create a connection between those innovative young companies and Michigan’s strong business and industrial base, providing benefit to both communities and increasing the financial success of the RVCF’s investments.
Formed in late 2008 with nearly $50 million from investors such as DTE Energy, Blue Cross Blue Shield of Michigan, AAA Michigan, CMS Energy, Huntington Bank, R.L. Polk & Co. and the W.K. Kellogg Foundation, the RVCF is the largest privately funded entity of its kind in the United States.
Venture capital investing has historically outperformed start market indices, and is a strong job creator– on average, creating a job with an average pay of $70,000 a year for every $38,000 invested. Overall, VC backed companies grow revenue 50 percent faster and grow jobs 800 percent faster than non-VC-backed companies.
The RVCF provides the benefits of venture capital investing with a “mutual fund” approach, spreading its investment over several venture capital firms and, through those firms, dozens of companies.
As of the end of 2010, the RVCF had invested in seven venture capital funds, covering more than 40 companies and a variety of industries that are relevant to Michigan, such as IT, health care, energy and advanced materials.
RVCF officials said that the venture capital funds with which it had partnered have found excellent opportunities in Michigan and have invested in Michigan companies more than three times the amount of its investment. That has enabled those Michigan companies to raise outside venture capital from around the country at a rate of 19 times our investment.
The RVCF said that its financial performance to date has also been strong. While the RVCF is still early in its life, the five realization events to date by our portfolio funds (three acquisitions and two write offs) have collectively yielded over a 360 percent return on investment.
The RVCF is managed by Chris Rizik, one of the most experienced venture capitalists in the Midwest, Chairman of NextEnergy and a Crain’s Detroit Business Newsmaker of the Year; and by Jeffrey Rinvelt, an experienced venture
capital investor and entrepreneur.
The RVCF’s management committee includes some of the most distinguished investors and businesspeople in the region, including Sam Valenti (Valenti Capital Chairman, Tri-Mas Corp. Executive Chairman), Richard Gabrys (retired Deloitte Vice-Chair), Eric Lundberg (University of Michigan Chief Investment Officer) and Doug Rothwell (CEO, Business Leaders for Michigan; Chairman, Michigan Economic Development Corp).
More at www.renvcf.com.