LANSING — The Michigan Economic Development Corp. on Wednesday announced that the Michigan Strategic Fund is targeting to invest up to $9 million to help grow the venture capital industry in Michigan.
Beginning June 28, the Pure Michigan Venture Development Fund will seek applications from first and second generation venture capital funds in Michigan for the primary purpose of increasing their ability to raise additional funds and become viable entities, with the ultimate intent of increasing the number of venture investments in the state.
The PMVDF will invest in up to four new venture funds in the state with up to $2.25 million each. Awarded venture funds must raise additional capital from the private sector (at least 4.5 times the state’s investment) and invest in Michigan companies.
To qualify, applicant venture funds are required to have raised $1 million in private capital from at least three unrelated investors at the time of application, which must be evidenced by signed investor commitments. Funds that have raised more than $25 million are not eligible to apply. Funds with target sizes greater than $50 million will not qualify for this program.
“The Pure Michigan Venture Development Fund will be a valuable tool in helping to grow the venture industry in Michigan,” said MEDC President and CEO Michael A. Finney. “Increasing the number of venture funds here will lead to the development of new innovation companies, greater economic growth and ultimately, more and better jobs.”
Proposals must be submitted to the MEDC via email sent to VDF@Michigan.org. Once the MEDC has received the application, applicants will be contacted on how to pay the application fee. Proposals will not undergo peer review until the application fee has been received.
All applications must be received by July 31, 2012 in order to be considered for award. There will be a $1,000 application fee due once a review confirms that the application meets the required minimum guidelines. There will be a peer review of the venture fund’s business plan as required under the 21st Century Jobs Fund legislation.
“Michigan is a national leader in research and development, ranking fifth among all states in number of patents awarded, in the top 15 in university innovation and second in industrial R&D spending — all critical drivers of good venture deals,” Gov. Rick Snyder said. “The venture industry needs to continue its growth here to better support entrepreneurs who are developing promising technologies and innovative early stage companies that will help to propel Michigan’s economy in the future.”
Questions pertaining to the Pure Michigan Venture Development Fund should be submitted electronically toVDF@Michigan.org. Responses to questions will be posted to the program web page on a regular basis: www.michiganadvantage.org/PureMichiganVentureDevelopmentFund. It is expected that the full review process will take up to 90 days. The review period may be longer or shorter depending on application volume.
The complete guidelines for the PMVDF Fund can be found at http://www.michiganadvantage.org/pure-michigan-venture-development-fund/.