It’s not exactly a secret that this isn’t the greatest time for venture capital. Returns over the past decade have gone negative after the heady dotcom bubble years, and with the recession lingering many funds have either closed or found themselves significantly smaller as it became harder and harder to attract capital.
These national trends are mirrored in Michigan. The Renaissance Venture Capital Fund, which announced its final close earlier this month, came in at half its $100 million target—and small firms like Apjohn Ventures of Kalamazoo, MI, were not able to raise a new fund at all.
Still, a quick look at venture fund-raising activity around the state shows there is still life in them thar limited partner pockets—and if anything, buoyed by a recent wave of exits such as Arbor Networks and Mobius Microsystems, the odds of successfully closing a venture fund in Michigan might even be rising.
We’ve been tallying things up and keeping a list of venture funds that have either closed recently or are currently seeking to close—both funds based in Michigan and those with a strong Wolverine state presence. By our count, 12 of these funds representing $614 million in committed capital have closed in the past two years—including the University of Michigan’s Social Venture Fund announced today (see below)—although because many invest around the Midwest or even the country, not all that money is earmarked for Michigan startups. And another six funds, targeting more than $250 million, are raising money now. That’s not counting two new angel funds trying to get going.
Here’s a roundup of what we have. If we missed something, and no doubt we did, please let us know at [email protected].
Closed in 2009 and 2010
—Arboretum Ventures (Ann Arbor): Early stage, specializing in health care. Closed $73 million second fund in February 2009. Arboretum’s first fund, which closed in 2005, was $24 million.
—Allos Ventures (Cincinnati and Indianapolis): Invests in early-stage companies and plans to work closely with angels who have helped build companies to the point they are ready for initial venture rounds. Began raising this debut fund in October 2009, and in early September of this year reported that it had reached $25 million target. Focus is on tech and healthcare companies in the Midwest.
—DFJ Mercury (Houston): Seed and early-stage firm invests in information technology, advanced materials, and life sciences/bioscience. Announced close of $70 million DFJ Mercury Fund II in late June 2010. The vast majority of its portfolio companies are in Texas. Michigan investments are limited to Kabongo and Swift Biosciences, but it is one of the firms Michigan-based fund of funds Renaissance Venture Capital Partners (see below) has invested in.
—Early Stage Partners (Cleveland-based, but opened Ann Arbor office in 2009): Invests in early-stage companies, primarily in Ohio and Michigan, across life sciences,
