ANN ARBOR –
The National Venture Capital Association, in a report released this week, said
Michigan set a record in the first quarter for investment activity. But the
executive director of the Michigan Venture Capital Association said she’s not
sure those figures are correct.
“Their
numbers are higher than ours,” said MVCA’s Maureen Miller Brosnan.
The national
MoneyTree report announced 12 companies in Michigan raised $75.3 million in
venture capital investments from January through March. A year ago in the first
quarter MoneyTree said Michigan did 14 deals for $37.1 million. But back in the
first quarter of 2000, before the Dot.Com bubble burst, Michigan recorded 17
deals for $142.9 million.
“We like the
MoneyTree numbers when they are good,” Miller Brosnan said. “And we look
skeptically on them when they are bad. But it does seem like their overall
theme in general is steady and consistent growth in the Michigan Venture
Capital industry.”
But that
growth could be threatened by a very conservative Michigan legislature that has
pushed for the elimination of the Venture Michigan Fund. The Fund invests in VC
firms that in turn invest in second-stage Michigan companies. Some legislators
have referred to the Fund as corporate welfare. Miller Brosnan said they don’t
understand the Venture Michigan Fund is not a subsidy, but a bipartisan investment
made in the state in 2003.
“We
understood it would be 10 to 15 years before it resulted in a Return on
Investment,” Miller Brosnan said. “We’re just now on the edge of seeing that
good work come to fruition.”
She said the
MCVA has been running an educational campaign for the legislators that
culminated in a report issued by the VC association in early April that pointed
out a huge disparity exists now between the demand for investment capital and
the amount of Venture Capital available for new and follow-up investments,
threatening the state’s entrepreneurial economy.
Miller
Brosnan said the report was crafted so it broke down the numbers on a
geographic basis to show legislators the economic activity going on in their
own backyards.
“We provided
good data that shows each of them what Venture Capital has brought to their
community,” she said. “We’re sharing it with them now. There’s a lot of
lobbying going on now. I am a locally elected official now and I understand
what it takes to get up to speed.”
Miller
Brosnan is president of the Livonia City Council.
She conceded
that the Venture Michigan Fund could be revamped and restructured. The MVCA
seeks a seat at the negotiating table to make sure the Fund continues to help
build the Michigan economy.
“We’ve spent
more than a decade building a venture capital community in Michigan that can
support the state’s extraordinary start-up companies and contribute to the
diverse economy that is crucial to the state post-recession,” Miller Brosnan said.
