Michigan Leads Great Lakes Region in Venture Capital Growth

Novi’s Michigan Venture Capital Association has released its 2022 MCVA Research Report, a comprehensive analysis of investment activity that has had a positive impact in the state. The report shows $6.6 billion of VC investment across 1,593 deals in Michigan since 2006.
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Flag of Michigan sticking in various american banknotes.(series)
Michigan is the fastest growing state for venture capital investment in the past five years. // Stock Photo

Novi’s Michigan Venture Capital Association has released its 2022 MCVA Research Report, a comprehensive analysis of investment activity that has had a positive impact in the state. The report shows $6.6 billion of VC investment across 1,593 deals in Michigan since 2006.

In 2021, an article in Crunchbase points to Michigan as the fastest growing state for VC investment: “No state has seen its venture money increase in the last five years as much as Michigan.”

The 2022 report reveals 161 Michigan startups received more than $1.4 billion in venture capital investment in 2021. It also showed there are 154 venture-backed startups in Michigan, an increase of 56 percent over the last five years.

Total venture capital funds under management of firms headquartered in Michigan in 2021 was $5.4 billion, a two-fold increase over the last five years. There were 19 exits by Michigan VC-backed startups in 2021, the largest amount of exits in a given year.

Diverse CEOs led 14.7 percent of Michigan venture-backed startups compared to 7.6 percent of diverse CEOs of Fortune 500 companies nationally.

These investments are not just coming from Michigan-based investors. For every dollar invested in a Michigan startup by a Michigan venture capital firm, $42.87 of investment is attracted from outside of the state.

The remaining capital available for new investments in 2021 was $527.6 million. As for follow-on funding for startups, it is expected that $236.8 million is reserved for existing Michigan-based portfolio startups. More than $76 million was raised by 111 startups from angel investors in 2021.

For venture capital firms headquartered in Michigan, the report shows a 10-year trend of a 36 percent increase in the number of active VC investors, a 671 percent increase of capital under management, an 88 percent increase of companies receiving venture capital funding, a 75 percent increase in the state’s VC deal count, and a 600 percent increase in the deal value.

Compared to the rest of the Great Lakes region — consisting of Illinois, Indiana, Minnesota, Ohio, and Wisconsin — over a five-year period, Michigan saw a 55 percent increase in deal count compared to 32 percent for the region, a 56 percent increase in startups receiving VC investments compared to 27 percent for the region, and a 367 percent increase in VC investment compared to 282 percent for the region.

Compared to the U.S. in the same time frame, Michigan’s VC deal count increased 55 percent against 27 percent nationally, the number of startups receiving capital increased 56 percent against 35 percent nationally, and a 352 percent increase in VC deal value against 303 percent nationally.

“For a year that saw many records being broken nationwide, we were proud to see that Michigan beat both the National and Great Lakes region average for investment volume,” says Jeffrey Rinvelt, chairperson of the MVCA and partner of Renaissance Venture Capital in Ann Arbor.

“Our report is more than facts and figures; it tells the story of the enormous impact and resiliency of the venture-backed businesses and how Michigan is becoming a leader within the Great Lakes region.”

For the most comprehensive list of Michigan venture capital firms, private equity firms, investment banks, family funds, angel-investor groups, economic development organizations, and asset management companies compiled by DBusiness magazine, Click here.