By Mike Brennan
MITechNews.Com
May 13, 2011
YPSILANTI - When University of Michigan Business Professor David Brophy started the Michigan Growth Capital Symposium in 1980, he only figured it would run a couple of years. This week, Brophy celebrated the 30th edition of what has become the grand daddy of all American investment conferences.
On May 10-11, 41 companies “pitched” venture capital and angel investors at the symposium presented by the University of Michigan Center for Venture Capital & Private Equity Finance of the Samuel Zell & Robert H. Lurie Institute for Entrepreneurial Studies. In the previous decade, some 71 percent of the presenting companies received investments. Whether the current class will score such impressive results remains to be seen. But the success of the Michigan Growth Capital Symposium in the past decade alone speaks for itself.
But it wasn’t always like this in Michigan, Brophy said in an interview.
“Just look at what has happened in our culture,” he said. “Look at how people talk about start-ups now. It’s totally different from 1980.”
Brophy said he was approached by then Michigan Governor William Milliken to develop a private-equity finance conference that would help the state rediscover its entrepreneurial roots that were planted by the likes of Henry Ford. Unfortunately, the state’s over dependence on that same auto industry lead to a decade-long recession after the turn of the 21st century when automakers’ sales tanked.
“It was tough sledding in 1980 for entrepreneurs,” Brophy said. “It was tough for our client companies to raise capital. But, over time, more money was raised through public funds. Then the public funds led to private funds. Now in Michigan we have an entrepreneurial infrastructure that not only includes some three dozen venture capital companies, but also attorneys, accountants and other professionals that know the entrepreneurial business.”
Today, the Michigan Growth Capital Symposium has grown into one of the catalyst for university spinouts, something that rarely occurred 30 years ago, Brophy said. In the past decade alone:
23 percent of the more than 300 presenting companies were university spinouts; Universities represented include the state’s top three research universities - University of Michigan, Michigan State, and Wayne State University, as well as other from across the Midwest; 70 percent of these companies were members of the state’s University Research Corridor, successfully raising $423 million in total funding and six of these saw successful exits; More than half of these companies came from the University of Michigan.
Brophy said Michigan now has the research, investment power and talent necessary to hold its own with the likes of Silicon Valley and Boston. And the Michigan Growth Capital Symposium has been a strong contributor in fostering the venture community’s growth in the state.
In the past five years alone:
More than $735 million has been invested into more than 120 deals in Michigan;
A 60 percent growth in the number of venture capital firms operating in the state;
Combined capital under management has reached $2.6 billion;
Nearly 80 venture-backed companies are Michigan based.
Long-time Michigan investor, Ray Waters, President of Enterprise Detroit, said he missed the first two Symposiums, but has attended the other 28. What’s his take on the MGCS?
“The quality of companies is getting better,” he said. “The symposium also continues to bring the venture capital community from different states to Michigan to see our start-ups. I don’t know of another forum that has been able to withstand the ups and downs of the economy like Dave’s symposium.”
Mike Brennan is Editor & Publisher of MITechNews.Com
