In 2018, 61 startups in Michigan received $385 million from Michigan venture capital firms, according to the Michigan Venture Capital Association’s 2019 MVCA Research Report, an analysis of investment activity in the state that was released today.
The report says there is increased demand for capital to support the growth of local startup companies; an estimated $964 million of additional venture capital is needed to support the growth of Michigan startups in the next two years.
“To position Michigan at the forefront of innovation, we need high-growth, high-tech startup companies to build a robust economy in the state,” says Ara Topouzian, executive director of the association, which is based in Ann Arbor.
“We have the critical components to building a strong entrepreneurial and investment community — talent, research, capital, and community — but as these companies reach their next stages of growth, we need additional capital to sustain it.”
Total funds under management of university and economic development-related funds in Michigan in 2018 were $46.8 million, an increase of 19 percent from the year before. Additionally, 84 startups raised more than $52 million from angel investors.
“The MVCA Annual Research Report underscores the importance of university, economic development fund, and angel investors in creating a strong investment pipeline that attracts and retains businesses in Michigan,” says Topouzian. “While this has been an incredible year of successes for Michigan’s entrepreneurial and investment community, we must ensure that we support entrepreneurs with the capital they need to hit critical milestones.”
There are 140 venture-backed startups in Michigan, an increase of 37 percent over the last five years.
There are 18 startup companies in Michigan led by a CEO who is a racial minority, an increase of 125 percent over the last five years.
Every dollar invested in a Michigan startup by a state-based venture capital firm attracts $7.85 of investment from outside of Michigan. There are 27 venture capital firms that are headquartered or have an office in Michigan. Total venture capital under management in Michigan is $3.7 billion.
About 533 venture firms from outside of Michigan have invested in startups based in the state.
In Michigan, 84 startups raised more than $52 million from angel investors.
The full report is available here.
The association is a nonprofit trade organization founded in 2002. Its goal is to increase the amount of capital and talent available to venture and angel investors for the funding of Michigan entrepreneurs.
