At a time when some venture firms are closing their doors, several Michigan venture capitalists have formed the Michigan Venture Capital Association in an effort to guide entrepreneurs to firms that can help them.
The association will also promote venture capital companies, and further on down the road begin lobbying the state on various issues.
"We want to continue to nurture the industry, and make sure everyone understands the important role venture capital plays in Michigan," Dick Eidswick, the association's president, told United Press International in a telephone interview.
There are 16 firms in the state, with funds that range between $10 million and $100 million. Most are early start-up funds that focus on life sciences, health care and some advanced manufacturing industries, including robotic applications, he said.
Eidswick added that the Ann Arbor, Mich., -based group plans to lobby to change how the state's pension funds are invested so more money can be invested in Michigan's venture capital firms.
"Our state government has one of the nation's largest pension funds, but our firms are so small they don't qualify for loans," Eidswick said. "We need to raise awareness that there exists a problem in the state of Michigan."
He added, "The state government has to recognize there is a need to stimulate the economy in this area, by supporting entrepreneurial companies that create jobs, and whose workers pay taxes."
Michigan invests its pension funds in such areas as stock, venture capital funds, bonds and real estate. Terry Stanton, press secretary to state Treasurer Douglas Roberts, said $860 million is set aside for venture capital investing.
"Generally, we don't consider investing in funds of less than $5 million," Stanton told UPI. "When it comes to investing in some of the state's smaller companies to help Michigan we are willing to listen."
However, he said the number one priority is whether a company or fund is a "good investment."
About $20.5 billion of the state's $45 billion in pension funds is invested. Stanton said $645 million has been invested in Michigan-based stocks and venture capital.
Eidswick, president of Arbor Partners LLC., said his firm has raised close to $40 million for two funds. Most of the money has come from institutional investors or wealthy individuals, he said.
