Venture Capital Investment Shows Upward Trend in Michigan

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The number of venture-backed firms in Michigan, the amount of funding being invested, and the quantity of deals in the state, all show significant increases in the last five years, according to an in-depth report on the venture capital industry released today.

The 2013 report, by the Michigan Venture Capital Association, says $120 million was invested in 40 companies in Michigan, an increase of 111 percent over the last five years and the highest number of deals since the nonprofit trade organization began tracking the information.

“Building an entrepreneurial economy takes time, and MVCA’s data show growth in the momentum here in Michigan in both successful startups and investments,” says Carrie Jones, MVCA’s executive director. “We have all of the right pieces of the puzzle in play, from capital for early stage startups through to second stage and growth stage companies as well as a robust pipeline of activity. Another solid indicator for our future: As venture capitalists continue to raise funds here, more investors and entrepreneurs will be attracted to Michigan.”

Key highlights of the report include:

  • There were 103 active venture-backed firms in Michigan in 2013, a 66 percent increase over the last five years.
  • Seventeen new startups received venture capital funding for the first time in 2013, while an additional 23 companies received follow-on investments.
  • Michigan-based venture capital firms had $1.6 billion in capital under management, an increase of 45 percent in the last five years.
  • Investments in life sciences companies accounted for the majority of deals in Michigan; of all investments, 45 percent were in life sciences companies. Forty percent of the companies that received investment in 2013 were in IT.
  • There were 33 venture capital firms either headquartered or with an office in Michigan, an increase of 50 percent in the last five years.

“While all indications point to the long-term vitality of the entrepreneurial ecosystem in Michigan, there is still work to do to ensure that there remains a robust capital continuum for Michigan’s entrepreneurs and their growing companies,” Jones says. “MVCA is committed to working with its members and other stakeholders to ensure that Michigan’s entrepreneurial economy continues to grow, and that there is capital available to invest in companies choosing to start up and grow here.”

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