What Every Michigan Venture Capitalist Needs to Know

Michigan has many programs available to assist the venture capital community. Here are answers to some questions on the Venture Michigan Fund, 21st Century Investment Fund and the 21st Century Jobs Fund Business Plan Competition.

1. What is the Venture Michigan Fund?

The Venture Michigan Fund (VMF) is a venture capital fund investment program that promotes Michigan's economic health through a "fund-of-funds", the Venture Michigan Fund I, LP (VMF-I). VMF-I is helping to create new jobs, new businesses, and new industries by investing in venture capital managers, who in turn invest primarily in Michigan-based early stage companies.

2. What is the Michigan 21st Century Investment Fund, LP?

The Michigan 21st Century Investment Fund, L.P. (21st Century Fund) was created through an agreement between Credit Suisse and the Michigan Strategic Fund. It aims to diversify and strengthen Michigan's economic base by spurring the creation and growth of new jobs, new businesses, and new industries in Michigan through investments in private equity, venture capital and mezzanine funds, along with potential co-investments.

3. What are the VMF and 21st Century Fund's processes for evaluating fund managers?

Fund manager evaluation process includes:

1. Issuing a Request for Proposal (RFP);
2. Reviewing and short-listing responses;
3. Requesting the completion of a detailed questionnaire;
4. Reviewing the questionnaire and holding on-site meetings; and
5. Making final selections.

For information on entering the VMF process, click on http://www.venturemichigan.com/venturecapitalists.htm. Visit http://www.michigan21stcenturyinvestmentfund.com/about_21stCentFund.htm for information on the 21st Century Fund. Bidders should expect the complete fund manager evaluation process to take up to 6-8 weeks from the receipt of a completed RFP.

4. How should the response to RFPs be submitted?

Bidders to the VMF and 21st Century Funds should submit proposals by both email and hard copy. Send electronic copies (including all Microsoft Word and Excel files) to venture.michiganfund@credit-suisse.com and 21st.centuryfund@credit-suisse.com. Two hard copies should be sent to the following address (same for both funds):

Jessica Holsey, Analyst
Credit Suisse
11 Madison Avenue, 16th Floor
New York, NY 10010

Any questions regarding the specifications in the RFP should be sent via email to: venture.michiganfund@credit-suisse.com or 21st.centuryfund@credit-suisse.com.

5. What is the 21st Century Jobs Fund Business Plan Competition?

Each year, Michigan's $2 billion 21st Century Jobs Fund invests $30 million into the winning bidders, which seeks companies in the life sciences, alternative energy, homeland security and defense and advanced automotive, manufacturing and materials industries. The competition seeks for-profit companies that can demonstrate a viable, sustainable business opportunity with job creation within five years or less. Competitors are evaluated on their business management team, current or near term investors, merits of their technology and projected market opportunity and success.

6. How does the 21st Century Jobs Fund Business Plan Competition work?

Proposals are submitted online and evaluated through independent peer review on scientific and technical merit, commercialization merit, personnel expertise and the ability to leverage additional funds. Matching funds from outside investments is required.

Awards are most likely structured as convertible loans. Winners will also have a portfolio manager assigned to them by the MEDC, providing value beyond the awarded capital.

7. What is the deadline to enter the 21st Century Fund Business Plan Competition?

The submission period for the 2008 competition has passed. Click here to view proposals that were chosen to advance.

For answers to frequently asked questions on the competition's Request for Proposal, click here. Visit http://www.themedc.org/21CBizPlan/ for more information and updates on the 2009 competition.