ANN ARBOR — The Michigan Venture Capital Association’s annual research report shows that 2012 was a banner year for venture capital in the state.
Compared to the national trend of declining VC funds and activity, funding activity and fund sizes in Michigan continued strong and steady growth last year.
In 2012, Michigan jumped from 25th to 15th in the national VC ranking — one of the largest increases in venture funding last year.
“The data reported in MVCA’s research report tell a compelling story about Michigan’s success in growing and nurturing an innovation-based economy,” said Carrie Jones, MVCA executive director. “The venture capital community in Michigan continues to mature, with more VC under management among firms here than ever before as well as a steady increase in out-of-state funds establishing a presence in the state. In tandem, Michigan’s entrepreneurial ecosystem continues to mature and strengthen, and more companies than ever before are attracting VC funding.”
The MVCA data shows that there are 29 venture capital firms doing business in Michigan. In 2012, venture capital firms invested $242 million in 33 deals in Michigan. An additional $12.5 million in a combination of angel and pre-seed funding was invested into these same deals.
The state has 106 active companies that have received venture capital or angel investment. While the majority of these companies are in the life sciences, the number of companies in other sectors are growing, most notably those focused on information technology.
Growth in Michigan venture funds has been steadily trending upward. In 2012, the amount invested by VCs, average fund size, capital under management all increased, as did available capital for new investments and the number of investment professionals. This growth has, in part, come from out-of-state funds opening offices in Michigan to tap into Michigan’s growing deal flow.
“Attracting outside investment to Michigan infuses the economy with new money that can help a company grow here,” Jones added. “Entrepreneurs are taking notice of this trend; thanks to the successful venture community in Michigan, more entrepreneurs are considering the state as a destination to locate and grow their business.”
For more information, visit www.michiganvca.org.