In a quest to fill West Michigan’s early-stage funding gap, the $15 million Michigan Accelerator Fund I has invested $4.8 million in seven companies, with an additional $3 million earmarked for add-on investments in those companies.
Finding those firms meant looking at more than 500 companies, a process that shined a light on the state’s innovation culture for the fund’s managers, John Kerschen and Dale Grogan.
“When we started, we were worried whether there would be enough Michigan companies to invest in,” Grogan said. “We’ve looked at 500 companies over the past 21/2 years. Michigan is a fertile ground for innovation. The quality of the deals in Michigan is every bit as good as what you would see nationwide.”
The fund emerged as an idea in August 2010, when a consortium of regional partners, including the Michigan 21st Century Jobs Fund, cobbled together a plan aimed at supporting early-stage life science and technology companies.
A $6 million award from the Michigan Economic Development Corp. provided a significant boost for the MAF-I, while the balance came from eight regional partners.
Grogan and Kerschen put in the initial $1 million and manage the fund from their offices at Charter Group Inc., a Grand Rapids-based merger and acquisition advisory firm.
Increasing the number of venture funds in Michigan will lead to the development of new companies and, ultimately, more jobs, said MEDC President and CEO Michael Finney.
“We are confident that by co-investing in these promising funds, we can continue to grow Michigan’s venture industry and accelerate the growth of innovative technology startups,” he said.