09 May 2009

VC's From 60 Firms And Banks To Gather In Ypsilanti

Story from Detroit Free Press

Investment dollars may be scarce, but that isn't stopping venture capitalists and entrepreneurs from converging in Michigan early next week.

Employees from 60 venture capital and private equity firms and banks plan to attend the 30th Michigan Growth Capital Symposium on Tuesday and Wednesday at the Ypsilanti Marriott hotel.

In search of the next Google or Starbucks, these investors will hear presentations from 16 Michigan companies as well as 16 firms from other states and Canada in industries such as the life sciences, energy and information technology.

The Free Press recently spoke with David Brophy, who started the annual conference and still oversees it as director of the Center for Venture Capital and Private Equity Finance at the University of Michigan's Ross School of Business. Here are some excerpts from the conversation:

QUESTION: Given the depressed economy, what is your outlook for venture capital firms in Michigan?

ANSWER: It's tough for venture capitalists per se. But most of the firms successfully raised new funds last year. On balance, they have a little more dry powder than last year. I'm hopeful that even in this bad time, we're going to come out of it strong.

Q: What is your advice to Michigan entrepreneurs with promising businesses that are struggling to find capital?

A: Make connections. You have to go out and make yourself known. Talk to others, help others and they will help you.

Q: What can Michigan do to grow its venture capital industry?

A: Build better companies like Lycera Corp., a pharmaceutical firm that recently obtained $36 million in venture capital financing. We need Lycera to stay here. We need people to spin off from Lycera and make new companies. We need 10 other Lyceras. That's nothing but hard work.

Q: What is the major trend in venture capital these days?

A: Energy is dominant. Energy is very central to what's going on here in Michigan.

Q: How do you see Michigan's economy evolving?

A: Michigan has been characterized as big business, big labor and big universities, none of whom cared about tech-based companies. But Michigan has a very skilled workforce. If we play our hand right, this will emerge as a strength for Michigan.

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