Xconomist of the Week: Ramsinghani On Microinvesting in a Company Town
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city turned itself around after losing approximately 100,000 auto-sector jobs. Turin, often called the Detroit of Italy, was a company town that revolved around Fiat. Turin has diversified its economy by focusing on entrepreneurship and high-tech sectors the way Detroit is trying to do now, but Ramsinghani says what he found most compelling was the way government, the universities, the foundations, and investors were willing to work together. “They developed a master plan and they stuck with it for 15 years,” he says. “They found unity in adversity, and that’s probably the biggest lesson we can learn.”
Where Turin lags behind Detroit, Ramsinghani says, is in the amount of risk capital available for investment—about a tenth of what we have here. Turin will soon be sending its own delegation to Detroit to learn more about the strategies used in Michigan to increase venture capital.
Ramsinghani came to his position leading the First Step Fund after living in Ann Arbor and Lansing, where he served as the Director of Venture Capital Initiatives for the Michigan Economic Development Corporation (MEDC). While at the MEDC, he developed strategies for bolstering Michigan’s venture-capital supply chain and helped shape the legislation responsible for deploying millions of investment dollars through the MEDC’s seed-stage venture funds.
Last year, he wrote a highly regarded book called “The Business of Venture Capital,” a collection of insights from global VC leaders. The idea for the book came from all the time he spent “sitting at the feet” of people who have been in the investment game longer and listening to their advice. “The ground rules never change,” Ramsinghani says. “You’re still asking someone to part with their money and allow you to manage it on their behalf.”
Ramsinghani, who is exceedingly kind in an almost fatherly way, thinks of his investments like kids: The tricky part comes in deciding who needs immediate attention and who needs room to breathe. He has been personally involved in the financing of more than 30 startups, but he hopes that’s just the beginning.
“Detroit is still looked upon by the rest of the world as a place of ruin, or the rust belt,” Ramsinghani says. “To some extent, it will take time to get rid of those biases. I see a lot of good opportunities in southeast Michigan. It’s easier to help entrepreneurs be successful than it was 10 years ago, but it’s still a challenge.”