New InvestMichigan! Fund adds $130M local investment capital

When Charlie Rothstein, founder of Michigan's largest venture capital fund, Beringea, helped launch the Venture Michigan Fund in 2006, barely a dozen people showed up. That's from both the venture capital and media camps. When the Venture Michigan Fund II launched earlier this year, more than 100 people came, ranging from venture capitalists to attorneys to reporters.

It shows how far Michigan's investing community came in a relatively short time. It's a journey that's taking another step forward this week with the launch of the InvestMichigan! Mezzanine Fund, a $130-million fund focused on investing in second stage companies.

"Sometimes these program take years to bear fruit," Rothstein says. "What's you're seeing now is some of those vines beginning to bear fruit, such as the InvestMichigan! Fund."

The InvestMichigan! Mezzanine Fund was formed from a partnership between the State of Michigan Retirement Systems, Dow Chemical and the U.S. Small Business Administration's Start-Up America Impact Investment SBIC Initiative, which is worth $1 billion. The fund will invest in lower-middle-market companies located in Michigan over the next five years. Farmington Hills-based Beringea and Credit Suisse will manage this newest arm of the circa-2008 InvestMichigan! Program.

The fund is joining a flood of new investment money targeting early to middle-stage start-ups. Among those are the $100 million Stage 2 Innovations Fund in Oakland County, the aggressive Detroit Venture Partners fund in downtown Detroit and a smattering of VC start-ups in Ann Arbor.

"There is certainly more private capital available now than at any other time (in recent memory)," Rothstein says.

Source: Charlie Rothstein, founder and senior managing director of Beringea
Writer: Jon Zemke

Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.