LANSING ? The Michigan Venture Fund, once activated, should generate 6,000 jobs in Michigan. But first the Fund has to pass muster with the IRS to get its non profit status and the fund manager has to be named, Michigan Treasurer Jay Rising said in The Interview.
Rising, in a question and answer session with Mitechnews.Com Editor Mike Brennan, said the primary criteria for the Fund manager is a proven track record and the ability to recruit top flight venture capitalists to Michigan to invest in Michigan start ups.
Which sectors of the Michigan technology economy that will receive funding has yet to be determined as well, Rising said.
The full interview follows:
Q: How close are we to naming a manager for the Venture Michigan Fund?
A: We?re very close. The board has had lots of discussions about what they are looking for and what is the best fit for the goals the board wants to accomplish for the state.
We have to make sure we have an agreement we all can live with.
Q: What are the key attributes for the fund manager?
A: A proven track record. A complete understanding of these programs. Understanding how they have to be combined with the state and private sector for these types of programs. We want someone who has been able to pick top talent and knows how to work with that talent.
We want to recruit the best VCs into this program and they want to find emergent VCs too. These new VCs and emerging VCs want to grow and improve the Venture Capital industry in Michigan. The fund manager must have an understanding of Michigan and these programs.
Q: How many submitted RFPs?
A: We had seven RFPs. We interviewed six of them and had second interviews with two. We?re talking with one to make sure we can reach an agreement that will make us all happy. Another key is to raise the capital for the Venture Michigan Fund and how these companies need to be capitalized.
Q: What sort of impact do you think the Venture Michigan Fund will have?
A: To grow venture capital in Michigan and place more funds under management in Michigan. It will produce more investments in Michigan looking for deals as well as mining and pulling commercialized technology and research from private and public places and to work with entrepreneurs to turn their ideas and products into commercial success and jobs. If it works the way we hope, we?ll be able to leverage the capital we invest four to six times with these VCs. We expect them to put all the money we?re investing back into Michigan. The ultimate goal is to create Michigan companies employing Michigan citizens.
We hope to create tens of thousands of jobs with this program. For every $21,627 invested in Venture Capital, one job is created. Our money alone, the $120 million, will create 6,000 jobs. Our money will not be the only money in that company and when a VC invests it will not be the only money invested. There?s a four to five times multiple to what we are doing here.
Q: Other states have tried similar funds and met with limited success. How will Michigan?s Venture Fund be different?
A: I don?t look to failure by example. I think we?re better positioned than other states. During the interviews, the fund managers said Michigan has the most likelihood of success. Look at the research dollars spent in Michigan. The VC industry here is really early in its formation. It?s a real opportunity for Michigan. I think national VC firms with all the competition they have on the Coasts realize that and are starting to locate in Michigan.
We?ve been able to attract good VCs to open offices in Michigan and start to mine Michigan. We?re attracting big VCs with $200 million funds in life sciences.
Q: What?s your five year outlook for the Michigan Venture Fund?
We?re never going to have what California has, a state with the economy of France. What I see is Michigan being competitive. We?re more competitive for researchers to locate. We?re more competitive for people to come to our Universities to do research. We?re more competitive for people to open their businesses here rather than go someplace else. The key to what we want to do is keep the business in Michigan and growing in Michigan.
Q: Can you explain your philosophy on how you manage the Michigan pension funds?
A: We are very active in public equity investment and real estate and are looking constantly in Michigan trying to put our investment dollars in every possible investment we can. One success was Flagship Ventures came to Michigan. EDF?s has begun fund raising in Michigan. We?re constantly looking at what Michigan companies are doing so we can play a role and look for the best managers and best private equity funds.
Q: Where do you see the Venture Michigan dollars going?
A: We haven?t defined a strategy to impose which sectors we?ll look at for Michigan?s economy. Any successful business person capitalizes on what they do best. What we do best is advanced technologies, life sciences and we?re a growing area in homeland security. Those are the components that come up with products and services in these areas. But Michigan?s strength is its life sciences and advanced technologies.
Jay Rising is the Michigan State Treasurer.
