The Venture Michigan Fund II is starting to pick up the pace of its investment, closing its third deal since its launch in January.
The $120 million fund of funds, which means it invests in other venture capital firms, has invested in only Ann Arbor VCs so far, including downtown Ann Arbor-based
Arboretum Ventures and
MK Capital, which has an Ann Arbor office. The latest investment is in Plymouth Management Company, commonly known as
Plymouth Venture Partners.
Plymouth Venture Partners recently closed its
second fund with $41 million, well above its initial goal of $30 million. The downtown Ann Arbor-based venture capital firm specializes in second-stage firms, mainly from the Great Lakes region, that are creating scalable technologies in areas like software, medical devices, or advanced manufacturing. Its previous investments include University of Michigan spin-out
Accuri Cytometers, which was
recently acquired for more than $200 million.
"They have been probably the most active investor in regards to getting deals done. That's important," says Sean O'Donnell, an investment professional with
Credit Suisse's Michigan Office. The Troy-based office is managing the Venture Michigan Fund II, which is a sequel to the original $96 million Venture Michigan Fund that came out in 2006.
The
Venture Michigan Fund II is supported by a bank loan. If the return on investment for Venture Michigan Fund II is not adequate to pay the principal and interest on the bank loan, then the bank can sell state of Michigan tax vouchers that can be used to satisfy a Michigan tax liability. The fund's focus is on venture capital firms targeting Michigan companies seeking seed and early-stage capital. Those start-ups are in the advanced manufacturing, health care, life sciences, IT, alternative energy, homeland security, and defense sectors.
Source: Sean O'Donnell, investment professional, Credit Suisse's Michigan Office
Writer: Jon Zemke
Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.
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