BIRMINGHAM Michigan Venture Capital Association President Mitch Mondry expects two more board members will be named to the Michigan Venture Investment Corp. within the next few weeks, which will allow the state-backed venture capital fund to incorporate and apply for non profit status with the IRS.
The $150 million fund will provide money to venture capital firms in Michigan that in turn will invest in Michigan companies in IT, life sciences, advanced manufacturing, and alternative energy technologies. The investment is backed by state tax credits against the single business tax to insure investors in the fund do not lose their money.
We have three board members, but need five to have a quorum, Mondry said Wednesday. Once we have a quorum, we can then incorporate the entity, apply for IRS certification and then search for a fund manager.
MVIC eventually will be directed by a seven member board, which will include State Treasurer Jay Rising, MEDC CEO Don Jakeway, two candidates selected by the Governor, one by the Senate, one by the House and one by the MVCA.
The Governor recently appointed Douglas Diggs of Grosse Pointe Park and Charles Rothstein of West Bloomfield. The MVCAs nominee, Thomas Kinnear of Ann Arbor, also was appointed to the board. Kinnear heads up the University of Michigan Zell Lurie Institute.
State Treasurer Rising manages Michigan’s public employee pension funds, which now amount to some $45 billion. Although some 13 percent of the fund has been placed in alternative investments, including Venture Capital funds, little if any has gone to support Michigan early stage technology companies. Rising has argued in the past that he has to place the funds in the highest possible yields. Michigan Venture Capital funds have not provided the yields Rising said he has had to deliver as part of his fiduciary responsibility.
When MVIC launches this year the $150 million fund will fill some of the funding gap not done by state pension funds – and help Michigan build a stronger technology industry.
