Michigan: An Unexpected Role Model for Growth

9/10/12

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would invest in the best venture capital funds from around the country under the condition that they begin to actively look at innovations in Michigan. While the idea of a venture capital fund-of-funds to spur growth was not new (many state governments have established similar programs, including the very successful Venture Michigan Fund program in our state), Renaissance was different in that it was led not by government but by business. Most importantly, we had major corporations in industries ranging from energy to automotive to home products to insurance (collectively representing over $1 trillion in annual sales) committing not only their money as Renaissance investors, but also their talent and purchasing power.

In other words, some of the nation’s most sophisticated organizations agreed to engage with our venture capital funds and Michigan start-up companies to help make them more successful. This was a game changer for our region in attracting venture capital: It is one thing for a venture capital fund to find an interesting alternative energy company in which to possibly invest; it is another for that fund to know that an industry leader like DTE Energy Company is willing to work with the VC and to provide market and technical feedback.

This created the ultimate “win-win” scenario that helped Michigan startup companies and venture capitalists increase the likelihood of their success and provided our corporate members with new visibility into cutting edge technologies. It also highlighted the overarching idea behind Renaissance: to use our fund as a platform to establish a network to bring together major businesses, research universities, venture capitalists, and startup businesses—helping all.

We established the Renaissance Fund at the worst possible time: Fall of 2008. The world seemed to be falling apart and Michigan was hemorrhaging jobs and companies. But the members of Business Leaders for Michigan stood tall and nonetheless provided over $40 million to get us started. Three and a half years later, we’ve grown to over $100 million and have an even broader group of stakeholders. We’ve provided our investors with solid financial returns but, just as importantly, have used our platform to create tangible benefit to Michigan’s innovation community. Our investments in venture funds to date have yielded venture capital investments of 15 times that amount in Michigan startup companies. If trends continue, our fund will enable over $1.5 billion in venture capital investment in Michigan, as well as increased connectivity between Michigan’s largest companies and some of its smallest, benefitting both.

When we established the Renaissance Fund, we felt that it could serve as a model for other regions of the country that have strong technology development and an engaged business community. So we were prepared when we were contacted by executives at Proctor & Gamble who, with others in the Cincinnati area, were looking to establish an ambitious, innovative organization called Cintrifuse to increase entrepreneurship in their region.

Working with McKinsey & Co., they identified Renaissance as a model for … Next Page »

Chris Rizik is the Chief Executive Officer and Fund Manager of the Renaissance Venture Capital Fund, a venture capital fund of funds formed by a consortium of several of Michigan’s largest corporations. Follow @

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