Year 2000 Great for Venture Capital Investments, Reports Michigan Economic Development Corporation

Survey shows increased investments in Michigan companies



Apr 16, 2001, 01:00 ET from Michigan Economic Development Corporation

    LANSING, Mich., April 16 /PRNewswire/ -- The Michigan Economic Development
 Corporation (MEDC) recently announced that venture capital (VC) investments
 increased by 75 percent in 2000 to $232.3 million, mirroring national trends
 of 80 percent for VC growth.
     According to a recent survey, conducted by Ann Arbor-based EDF Ventures
 L.L.P. and PricewaterhouseCoopers, a total of 36 out-of-state VC firms
 invested in Michigan compared to 28 in 1999.  The number of Michigan venture
 firms investing in Michigan companies last year remained constant at 13.
 Three new VC firms initiated operations in Michigan last year.  The amount of
 venture capital under management in Michigan increased 36 percent to $2.5
 billion.  This is nearly 20 times the growth since 1996.
     "This is a great victory for Michigan.  This news signifies that our
 efforts to bring high-tech industries and companies to Michigan are making a
 difference," said Doug Rothwell, president and CEO of the MEDC.  "It also
 confirms that the resources are available to foster new businesses seeking to
 invest in Michigan."
     Michigan is home to the nation's fastest growing venture capital industry,
 with more than $2.5 billion available to bankroll growth-oriented companies in
 the state.  Venture capital is a high-risk equity investment by experienced
 fund managers in companies with explosive growth potential.  Investments
 should yield earnings several times the size of the original equity investment
 over five to seven years.
     "The good news for Michigan is that each year we have more venture
 capitalists in state and more money under management.  This helps in the
 building of the state's financial structure," said Tom Porter, a general
 partner at EDF.  "It's important because it demonstrates the steady growth in
 capital funds and professionals in Michigan."
     In addition, the life sciences and health care companies cornered
 20.2 percent of total investments.  The information technology (IT) sector
 raised 62.2 percent while 14.8 percent was raised by business services.  Seed
 and first round investments increased from 34 percent to 58 percent.  The
 majority of the investments are in early stage companies.
     EDF Ventures, L.L.P. and PricewaterhouseCoopers annually survey companies
 via mail, e-mail and phone responses to measure the cash-for-equity
 investments of venture capitalists nationwide.
     The Michigan Economic Development Corporation, a partnership between the
 state and local communities, promotes smart economic growth by developing
 strategies and providing services to create and retain good jobs and a high
 quality of life.  For more information on the MEDC's initiatives and programs,
 visit the website at www.michigan.org .
 
 

SOURCE Michigan Economic Development Corporation
    LANSING, Mich., April 16 /PRNewswire/ -- The Michigan Economic Development
 Corporation (MEDC) recently announced that venture capital (VC) investments
 increased by 75 percent in 2000 to $232.3 million, mirroring national trends
 of 80 percent for VC growth.
     According to a recent survey, conducted by Ann Arbor-based EDF Ventures
 L.L.P. and PricewaterhouseCoopers, a total of 36 out-of-state VC firms
 invested in Michigan compared to 28 in 1999.  The number of Michigan venture
 firms investing in Michigan companies last year remained constant at 13.
 Three new VC firms initiated operations in Michigan last year.  The amount of
 venture capital under management in Michigan increased 36 percent to $2.5
 billion.  This is nearly 20 times the growth since 1996.
     "This is a great victory for Michigan.  This news signifies that our
 efforts to bring high-tech industries and companies to Michigan are making a
 difference," said Doug Rothwell, president and CEO of the MEDC.  "It also
 confirms that the resources are available to foster new businesses seeking to
 invest in Michigan."
     Michigan is home to the nation's fastest growing venture capital industry,
 with more than $2.5 billion available to bankroll growth-oriented companies in
 the state.  Venture capital is a high-risk equity investment by experienced
 fund managers in companies with explosive growth potential.  Investments
 should yield earnings several times the size of the original equity investment
 over five to seven years.
     "The good news for Michigan is that each year we have more venture
 capitalists in state and more money under management.  This helps in the
 building of the state's financial structure," said Tom Porter, a general
 partner at EDF.  "It's important because it demonstrates the steady growth in
 capital funds and professionals in Michigan."
     In addition, the life sciences and health care companies cornered
 20.2 percent of total investments.  The information technology (IT) sector
 raised 62.2 percent while 14.8 percent was raised by business services.  Seed
 and first round investments increased from 34 percent to 58 percent.  The
 majority of the investments are in early stage companies.
     EDF Ventures, L.L.P. and PricewaterhouseCoopers annually survey companies
 via mail, e-mail and phone responses to measure the cash-for-equity
 investments of venture capitalists nationwide.
     The Michigan Economic Development Corporation, a partnership between the
 state and local communities, promotes smart economic growth by developing
 strategies and providing services to create and retain good jobs and a high
 quality of life.  For more information on the MEDC's initiatives and programs,
 visit the website at www.michigan.org .
 
 SOURCE  Michigan Economic Development Corporation