LANSING — The Michigan Economic Development Corp. today announced Michigan Strategic Fund investments of $2.8 million into six growing technology companies through the Pure Michigan Venture Match Fund.
“Innovative early-stage companies often need venture capital to help finance critical stages of their development and commercialization,” Michigan Gov. Rick Snyder said. “We are confident that by co-investing in these companies, all of which have secured private investments, we are bridging a capital gap and helping entrepreneurs develop promising technologies to grow into new innovation companies.”
In April 2012 the Pure Michigan Venture Match Fund opened for applications from Michigan companies that have secured an equity investment commitment led by a qualified venture fund. The program uses a market-driven approach to co-invest alongside qualified venture capital firms in early-stage technology companies that are based in the state. While only in-state companies are eligible to apply, the program can match investments from both in-state and out-of-state venture funds.
From the total of $5 million that was initially available for this round of funding, the MSF has approved $2.8 million in matching investment dollars into six companies: Amplifinity, Gema Diagnostics, Livio Radio, nanoRETE, Stik, and Tissue Regeneration Systems. The MSF matching funds leverage $7.3 million in private investment dollars.
“One of these companies, Stik, just announced it has closed a $2.3 million Series A financing round, and we’re excited to be a part of this round of investment with Stik,” MEDC President and CEO Michael A. Finney, said. “This is a perfect example of why we are willing to co-invest through our Pure Michigan Venture Match Fund alongside venture capital funds in our promising companies.”
Stik, a Detroit-based local review website for professional services, made its fundraising announcement on the heels of the company’s move from San Francisco to downtown Detroit’s emerging tech hub. Stik will use the latest round of funding to add some key hires to its team, which has more than doubled in the past six months. MEDC highlighted Stik in its recent national business advertising campaign (“What happens when left coast meets right fit”).
The remaining Pure Michigan Venture Match funds will be awarded to eligible companies as long as funds are available. Companies are only allowed to apply for MSF funding once they have secured a qualified venture-led investment. The program requires an independent peer review of the company and its investors in the application process, and a $1,000 application fee is due once the review confirms that the application meets the required minimum guidelines.
The minimum venture-led investment that will be considered is $700,000 and the maximum is no more than $3 million. The co-investment from the MSF is no less than $350,000 and no more than $500,000, with similar investment terms as the venture-led commitment.