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A SPOTLIGHT ON THE MVCA EIR & CEO PLACEMENT PROGRAMS
The Michigan Venture Capital Association (MVCA) and the Michigan Economic Development (MEDC) work together to foster an environment to help entrepreneurs and venture stage companies succeed. As part of this partnership, the MVCA received a 21st Century Jobs Fund award from the MEDC to implement the EIR and CEO Placement programs. Under the program, Michigan venture capital firms may apply for a loan award to assist with the first year salary of an EIR. The loan award may be used to pay the one year salary of an EIR or that of a newly recruited CEO in one of their Michigan-based portfolio companies. The loan award may also be applied toward the recruiting fees incurred in finding an entrepreneurial CEO.
For information about the MVCA EIR or CEO Placement programs, visit the spotlight section on www.michiganvca.org or contact LeAnn Auer at 734.223.3750.
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Arboretum EIR Kris Aalto settles into new leadership role as award year closes
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An Ann Arbor biomaterials company is enjoying the leadership of a new president thanks to the MVCA's Executive in Residence (EIR) Program. Kris Aalto recently completed her year-long stint as Arboretum's EIR and is now serving as president of Accord Biomaterials, an Arboretum portfolio company.
"We entered into our EIR relationship with Kris with clear intentions-to have her spend several months evaluating a wide swath of Arboretum deals, hopefully find something that captured her interest and spoke to her passion and experience in the orthopedics or biomaterials sectors, and see if there was a senior leadership opportunity for her," said Tim Petersen, managing director at Arboretum.
"Jan (Garfinkle, Arboretum managing director) and Tim were very helpful in keeping the position exploratory early on and allowing me to get a wide taste of what Arboretum does," recalled Aalto. "It gave me time to evaluate many potential deals and select an opportunity that was the right fit for Arboretum as a VC firm and me as an executive."
The selection, Accord Biomaterials, received $1 million in Series A venture capital financing in April 2008. Arboretum led the round.
"We were familiar with the technology already due to a long relationship with the head of MC3 Corp. (which partnered with the University of Michigan to incubate Accord) but Kris was crucial in putting all the pieces together in a thoughtful way that helped us make the decision. I'm not sure we would have gotten there as quickly without her," said Tim Petersen.
Aalto worked with the company and its founder, interim president Scott Merz, Ph.D., after the funding round to be sure that the fit was right. In July, Aalto was named president of Accord Biomaterials and has since settled in to her role leading the firm's team of research scientists as they develop their signature product, NogenTM catalytic nitric oxide coatings for blood-contacting medical devices.
Petersen says: "In just several months, Accord has moved out of the incubator stage and into the commercialization process and Kris was a key part of that. Her background in biomedical engineering, sales and general management roles has allowed her to quickly navigate the biomaterials space and lead the company to its next stage of growth."
According to MVCA executive director LeAnn Auer, the EIR program model has worked as designed at Arboretum. "We created the EIR program to not just augment the expertise available to a Michigan venture capital firm but also to develop new talent for the Michigan entrepreneurial community. With Kris' appointment to Accord Biomaterials, we have gained one more Michigan VC-backed company with an exceptional entrepreneur in a leadership role. There's real value in that."
Petersen recommends other Michigan VC firms considering participation in the MVCA EIR program evaluate their own financial ability to bring on the executive, along with their firm's internal work schedule. He suggests firms could get extra value from an EIR during busy times, like near the end of a fundraising round. Regardless, he would consider Arboretum's EIR experience a success. "It ended up exactly as we had hoped--we would definitely do it again."
About Arboretum Ventures
Arboretum Ventures is an early-stage venture capital firm focusing on investments in medical technology, life sciences and healthcare services. Arboretum invests throughout the United States, with a special interest in the Midwest region. Founded in 2002 and located in Ann Arbor, Arboretum currently manages $85 million in capital. www.arboretumvc.com |
New MVCA Executive In Residence program participant named--Plymouth Management Co.
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Ann Arbor-based Plymouth Management Company (PMC) is one of Michigan's most active venture capital firms, with 28 portfolio companies and $25 million under management. But this fall, PMC will ramp up its investing activities in a new sector thanks to its participation in an innovative Executive In Residence (EIR) program ran by the Michigan Venture Capital Association (MVCA). The program, which awards loans to Michigan venture firms to support the first year salary of an EIR, allowed PMC to recruit seasoned executive Ariel Sacerdoti to the firm in June.
"We've long wanted to pursue a buyout strategy, but often the value in that type of investing comes from having a senior executive ready to place in the target company ," said Mark Horne, CEO of Plymouth Management Company. "Ariel's exceptional twenty-year leadership history, starting two companies and growing them into multi-million dollar operations, was exactly what we were looking for."
Sacerdoti, an Ann Arbor entrepreneur who most recently led Swiss robotics manufacturer Gudel's U.S. operations, was searching for his next opportunity when he learned of the MVCA's EIR program.
"I had known Ian (Bund, Chairman of PMC) for many years and thought that my talents might fit well in the venture capital arena. Despite job offers from firms in Minnesota, Georgia, and Germany, I really wanted to remain in Ann Arbor. The MVCA EIR program made it possible for me to stay in Michigan and continue to contribute to our entrepreneurial economy," said Sacerdoti.
Considering Sacerdoti's experience leading similarly sized firms, the firm seeks buyout targets with $5 million-$20 million in revenue, with a $0.5 million-$2 million in EBITDA, in a variety of preferred industries, including: manufacturing, technology, aerospace, defense, capital equipment, medical devices, applied technology manufacturing, integration and services. Targets such as family companies or divisions or product lines will be considered, addressing issues such as succession planning, underperforming activities, divestitures or undercapitalized businesses.
MVCA Executive Director LeAnn Auer believes the EIR program could be a key factor in keeping talented executives like Sacerdoti in Michigan. "We are down in the trenches with the venture firms, helping them source and develop talent for their firms and the portfolio companies they support," she said. "Ariel and Plymouth Management Company represent a great example of how the program should work-allowing an experienced executive to remain in the state, to the benefit of a Michigan venture firm and possibly a Michigan portfolio company."
About Plymouth Management Company
Plymouth Management Company (PMC) isa general-purpose venture capital firm financing and adding value to growth stage companies in Michigan and the Great Lakes region. Its fund Plymouth Venture Partners (PVP) I is a $25 million pledge fund that has been investing since April 2003. PVP I finances and adds value to emerging companies in Michigan and the Great Lakes region. PVP I investors are mainly highly experienced Midwest entrepreneurs who have successfully built and exited one or more companies. Many investors are actively involved in adding value to investees and serve as a unique "brains trust" and resource to PMC. Currently, PMC is fund raising for a second fund, PVPII@OU, a $30 million committed fund with a strategic alliance with Oakland University INCubator.
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New MVCA Executive In Residence program participant named--Venture Investors
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Ann Arbor-based Venture
Investors' Managing Director Jim Adox had known Christine Gibbons for 10 years when
he heard she was ending her tenure as Chief Financial Officer at water sensor
producer Sensicore. With a burgeoning
portfolio of young companies in need of experienced advisers, Adox thought Gibbons
might be a great fit.
"For us, it's all about
having knowledgeable, trustworthy people in place to support our portfolio
companies. When I heard Sensicore was
being sold (to GE in April 2008), I wondered what Chris was doing next," said Adox.
The two reconnected and
quickly learned of The Executive In Residence (EIR) program, developed in 2007
by the Michigan Venture Capital Association (MVCA) to help Michigan venture
firms support the placement of an EIR into a firm's operations for the purposes
of finding a new venture investment for that EIR to lead.
Adox said: "Our intention to work together was amplified
by the possibility of participation in the MVCA's EIR program. The EIR award made our relationship with
Chris more extensive than we had hoped, allowing us to capitalize on her
experience at a successful venture-backed business."
Venture Investors (VI),
with $200 million under management, will receive loan money to support the annual
EIR salary of Gibbons. Gibbons, who had
venture capital experience before becoming CFO of Sensicore in 2002, will be tapped to run a VI portfolio company within one
year.
The program has allowed Gibbons
to remain in the area, while helping VI build strong Michigan companies. "Joining forces with them to source, fund and
lead a Michigan-based early-stage company allows me to stay involved in the
local entrepreneurial economy," Gibbons said.
Venture Investors plans
to invest $500,000 to $2 million in a promising early-stage technology project
which needs talented leadership. Areas
of interest include, but are not limited to, cleantech, medical devices and
hardware and software. The investment
will come from its $117 million Fund IV, managed out of VI's Ann
Arbor and Madison,
Wisc. offices.
MVCA Executive Director
LeAnn Auer believes the EIR program addresses an important concern among
venture capital investors-finding and retaining talented portfolio company
management: "Michigan lacks a
concentration of experienced executives like exists on the (east and west)
coasts. Our MVCA EIR and CEO programs
can bridge the talent gap and be the impetus for a promising start-up company
to succeed and eventually hire more employees."
About Venture Investors
Venture Investors (VI) provides
seed and early stage venture capital in the Midwest. Formed in 1982, the firm has a proven track
record of financing world-class technology companies throughout the Midwest. With $200 million under management, its
investment strategy is to identify and commercialize industry-leading
technologies developed by some of the nation's top research institutions,
including the University
of Michigan and the University
of Wisconsin-Madison. |
| Monthly MVCA Member Roundtable Held |
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 The Michigan venture capital community came together September 24 at the Ann Arbor offices of Dickinson Wright for a roundtable discussion of the state's venture climate. The breakfast meeting highlighted the new "Michigan Growth Fund", a $50 million seed fund of funds with a "mission driven" goal of accelerating committment to venture funding in Michigan. The Fund's managers, Tom Porter and Gerry Spencer, hope to support seed funds that can meet technology at the state's universities' gates and successfully market the ideas. Members also voiced the need for a common glossary to describe VC stages and a catalog of state-wide VC programs available. MVCA committees, including Legislation, Capital and Talent, were outlined and volunteers for each committee are requested. To join an MVCA committee, contact LeAnn Auer at lauer@michiganvca.org.
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| MVCA members welcome national VC group to Michigan |
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 Michigan Venture Capital Association members gathered in Detroit September 10-12 for the annual meeting of the nationwide National Association of Seed and Venture Funds (NASVF). The group, a collective of private, public and non-profit organizations committed to building local economies by investing in entrepreneurs, held their annual meeting in Detroit's Marriott Renaissance Center. MVCA members, including those from EDF Ventures, Credit Suisse Customized Fund Investment Group, Arboretum Ventures, Chrysalis Ventures, Nth Power, MEDC, and U-M, spoke to the national VC audience on topics ranging from fund formation and entrepreneurship to portfolio management and exit strategies. |
| Chrysalis Ventures Celebrates New Ann Arbor Office |
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Michigan Venture Capital Association members helped
welcome Chrysalis Ventures to the community with a reception August 20 at
downtown Ann Arbor hotspot Vinology.
Chrysalis, which was founded in 1993 and invests primarily in healthcare
services and technology, media and communications, and business services in the
Midwest and South, is headquartered in Louisville and has offices in Cleveland
and Pittsburgh.
"Chrysalis has a proven history of identifying and investing in the best young
companies in Middle America, an area historically overlooked by the financial
community and therefore 'under-ventured,'" said Koleman Karleski, Chrysalis
Ventures managing director. "We have had great success working with
Michigan-based companies in the past and have been impressed by the caliber of
the management teams and resources available. We look forward to expanding our
Michigan presence even more through our new office location."
Karleski introduced his firm to the guests at
Vinology and welcomed Chrysalis portfolio company CEO Ted Dacko of Ann
Arbor-based HealthMedia, Inc. Dacko
praised Chrysalis' supportive investment style and its confidence in its
portfolio companies to ultimately succeed despite any short-term rough
patches. "I've managed several VC-backed
businesses, and Chrysalis' involvement with HealthMedia has been absolutely
first-rate. I've been so pleased with
how the relationship has developed, and I think they are as well."
In February 2008, Chrysalis announced the closing of
its fourth fund at $163 million which included the Venture Michigan Fund as a
new limited partner. It has $375 million under management and has made
investments in over 55 companies.
Chrysalis Ventures is located at 130 South First
Street, Ann Arbor, Michigan, 48104. www.chrysalisventures.com
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| MVCA Calendar of Events |
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MVCA ANNUAL AWARDS DINNER
Monday, November 3, 2008
5:00 - 8:30pm Marriott at Eagle Crest in Ypsilanti, MI
MVCA TEXAS HOLD'EM TOUR
Immediately following the Annual Awards Dinner
@ Approximately 8:30pm
MVCA & CREDIT SUISSE VC HOLIDAY COCKTAIL RECEPTION
Tuesday, December 2, 2008
5:30-8:00pm Ann Arbor, MI
Vinology "Bubble Room"
314 S. Main Street
Ann Arbor, MI
OTHER INDUSTRY EVENTS...
Midwest Alternative Energy Venture Forum
November 6, 2008
Chicago, IL
MichBio 2008 Expo & Conference
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| Office Furniture Promotion for MVCA Members |
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WorkSquared, a high-end furniture distributor in Novi, MI is passing along "rock bottom" discounts for MVCA members and/or their portfolio companies and clients. WorkSquared is the 2nd largest distributor in Michigan and has been doing business for 13 years, and is ranked #1 nationally.
username: mvc
password: mvc546!
Also, if you are interested in receiving an actual catalog, please contact the MVCA. | |
