Ann Arbor VC funds reap big returns from HandyLab sale

Wednesday, November 4, 2009 | Source: AnnArbor.com

The smaller venture capital funds in the Ann Arbor area are starting to get bigger thanks to big deals, like the sale of HandyLab.

Excerpt:

As major venture capital firms in California and Boston shift their attention toward late-stage investments to mitigate risk, opportunity emerges for Michigan investors willing to take the risky plunge into early-stage ventures.

The potential benefits of an early-stage strategy for Ann Arbor were on full display with the student-led Wolverine Venture Fund, which last week celebrated a financial windfall from one of its first investments.

The Wolverine Venture Fund reaped a return of six to seven times its total investment of $350,000 in U-M spinoff HandyLab, an Ann Arbor-based medical devices firm acquired Friday by New Jersey-based Becton, Dickinson and Co. AnnArbor.com confirmed Friday that BD paid close to $300 million.

The deal showcases the potential of small-scale, early-stage investors and underscores the increasing prominence of student-run funds. The Wolverine Venture Fund, along with Ann Arbor-based EDF Ventures, was a founding investor of HandyLab when it started in 1999.

“It wouldn’t have existed without EDF, and Wolverine was part of that,” said Tom Kinnear, executive director of the Samuel Zell & Robert H. Lurie Institute for Entrepreneurial Studies at the U-M Ross School of Business. “We were there Day One when they were first founded.”

Read the rest of the story here.