MEDC leader calls on firms getting state funds to invest faster in local companies
Louis Aguilar / The Detroit News
The head of the Michigan Economic Development Corp. says venture capital and private equity firms given tens of millions in state money are taking too long to invest in local companies.
The Michigan 21st Century Investment Fund was set up three years ago with $109 million from Michigan's tobacco settlement revenue. Its goal is to help jump-start the state's new economy by giving the money to investors to fund Michigan startups.
But those investors have distributed only $35 million to a dozen Michigan businesses so far. The Michigan 21st Century Investment Fund dispersed its final $35 million to four more firms Monday, including one private equity and three venture capital firms. Eight previous investment firms and one company, Microposite Inc. of Auburn Hills, have received money from the fund.
"Given our economic situation, we would like to see more action," said Greg Main, CEO of the MEDC, which promotes economic growth. "I don't hear anyone saying to me that a deal isn't around. The deal flow is here."
State data show that the pool of venture capital funding in Michigan reached $1 billion in 2008, a $100 million increase from the previous year, and that $246 million was invested in Michigan businesses in 2008, a $141 million jump. More here.