| An Incentive for Angel Investors |
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This week, the Michigan State Legislature unanimously approved bills allowing angel investors to receive an income tax credit if they put at least $25,000 into a "qualified business" that received a total investment of $100,000. This credit would apply to investments made prior to December 31, 2011.
Previously, the minimum investment amount was $100,000, which left the tax credit unused since 2005, when it was introduced.
The MVCA represented
our angel investor members by presenting our support of the bills to the New Economy and Quality of Life Committee in Lansing on February 25th.
A "qualified business" must meet all of the following conditions: (1) is a seed or early stage business as defined in Section 3 of the Michigan Early Stage Venture Investment Act of 2003 (MCL 125.2233); (2) has its headquarters in Michigan, is domiciled in Michigan, and has a majority of its employees working in Michigan; (3) has a pre-investment valuation of less than $10 million; (4) has been in existence less than five years; (5) is engaged only in competitive edge technology; and (6) is certified by the Michigan Strategic Fund as a "qualified" business. "Competitive edge technology" includes advanced manufacturing, alternative energy; homeland security/defense; and life sciences.
reducing the minimum investment an angel investor
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Michigan VC Community News Roundup
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To be included in the news roundup, please send your press releases to LeAnn Auer at lauer@michiganvca.org.
Arboretum Ventures Closes Second Fund at $73 million
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| MVCA Calendar of Events |
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MVCA VC BREAKFAST ROUNDTABLE
Networking, MBT & Venture Firms, Portfolio Valuation, and the MVCA Capital and Legislative Strategy
Wednesday, March 4, 2009
8:00-10:30am
Hosted By: Honigman
130 S. First St., 4th Fl.
OTHER INDUSTRY EVENTS...
Credit Suisse Private Equity Conference on Small & Emerging Managers and In-State Investments April 20-21, 2009 Wayne State University
Detroit, MI
Michigan Growth Capital Symposium
May 12-13, 2009 Marriott Resort at Eagle Crest
Ypsilanti, MI
www.michigangcs.com |
MVCA members awarded EIR, CEO Placement loan awards
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CEO Placement Awardees--Nephrion and MVCA member investors Apjohn Ventures Fund, North Coast Technology Investors and Dow/Union Carbide Employees' Pension Plans
The Michigan Venture Capital Association (MVCA) has awarded a CEO placement loan to the venture investors behind Ann Arbor-based Nephrion, Inc., a life sciences firm whose medical devices are intended to treat End Stage Renal Disease, Acute Renal Failure and other acute inflammatory indications. MVCA venture members Apjohn Ventures Fund, North Coast Technology Investors and Dow/Union Carbide Employees' Pension Plans, along with Lurie Investments, the Biosciences Research and Commercialization Center of Western Michigan University, and the State of Michigan Strategic Fund, will receive a loan to fund the search and salary of a qualified CEO for Nephrion. The CEO placement program was developed in 2007 by the MVCA to help Michigan venture capital firms support the placement of qualified leadership into a portfolio company's operations.
According to Mina Sooch, founder and managing partner of Apjohn Ventures, the group hopes for a candidate with experience leading a venture-backed medical device company who has taken a product from concept to commercialization.
"We have hired national recruiting firm O'Hara and Associates, which specializes in finding medical device executives," Sooch continued. "They have already given us an exciting selection of candidates, and we fully expect to have our leader in place by the second quarter of this year."
The new CEO will guide the company through its clinical trials, regulatory approvals, and is also expected to be involved in subsequent fundraising rounds. The company forecasts its initial products to be commercially available in 2010.
Nephrion is the third venture-backed company to receive the MVCA CEO placement award. MVCA Executive Director LeAnn Auer said her organization is pleased that multiple venture members will share in the loan benefit. "This gives Nephrion's investors more runway to ensure that the company enjoys long-term viability. It also makes their investment dollars go further, which is a great advantage for our member investors."
EIR Awardee--MVCA Member Southwest Michigan First Life Science Fund
The Executive In Residence (EIR) program has named the Southwest Michigan First (SWMF) Life Science Fund as its most recent loan award recipient. The EIR program was developed in 2007 by the Michigan Venture Capital Association (MVCA) to help Michigan venture capital firms support the placement of qualified leadership, an EIR, into a firm's operations.
The Kalamazoo-based SWMF Life Science Fund will receive a loan to partially support the annual salary of EIR Paul Neeb. Neeb, formerly with Pfizer and most recently a vice president with the Fund's General Partner, Southwest Michigan First (SMF), will identify and then join a new SWMF Life Science Fund portfolio company within one year.
"Paul has all the requisites for a great CEO-years of experience in the life sciences sector, a background in commercialization and an understanding of the practical side of running a business," said Patrick Morand, Managing Director of the SWMF Life Science Fund. "We expect him to find several potential portfolio companies, perform the due diligence on the most interesting opportunities and lead the one that's best fit. We're betting on him."
A graduate of the Kellogg Graduate School of Management at Northwestern University, Neeb spent most of his career with GD Searle (later Pharmacia and Pfizer) in finance, sales and leadership roles. Most recently, Neeb served as vice president at Southwest Michigan First, supporting the life science cluster, working with early stage companies and founding First Angels, a Kalamazoo-based angel group.
"My background is both leading and building companies that are close to commercialization. This experience is applicable to medical device firms or companies nurturing technology that's further along in the regulatory process-but I'm open to other opportunities," Neeb said. "I'm already guiding ten life sciences companies through our investment process. Whether any ultimately join our portfolio or not, I feel very optimistic that we will find the right investment target for the fund, as well as an appropriate leadership role for me."
Morand credited the MVCA and the State of Michigan for allowing funds like the SWMF Life Science Fund to access capital to retain and nurture high-level talent: "Paul is highly motivated and extremely disciplined, and he'll make a great CEO for an early stage life sciences company. Thanks to the MVCA and the MEDC, we are able to make that happen."
Neeb agreed, "I feel extremely blessed to be given this opportunity. The full support of the MVCA, MEDC and SMF will ensure that my experience is a success and hopefully pave the way for other individuals to be given similar opportunities."
The SWMF Life Science Fund follows a slightly different capital model from the standard venture fund, accessing capital on a rolling subscription basis. Morand says the fund's limited partners are keenly interested in venture investing right now, given the industry's low valuations and a talent surplus in the region. The portfolio includes companies working in therapeutics, medical devices, bio-IT, ag-bio and diagnostics.
The SWMF Life Science Fund is the fourth Michigan venture capital firm to receive the MVCA EIR award. Past awardees include Arboretum Ventures, Plymouth Management Company and Venture Investors.
The MVCA received a 21st Century Jobs Fund award from the MEDC to implement the EIR and CEO Placement programs. This grant award allows the MVCA and the MEDC to work together to foster an environment to help entrepreneurs and Michigan-based venture-backed companies succeed. Under the EIR program, Michigan venture capital firms may apply for a loan award to assist with the first year salary of an EIR. Under the CEO Placement program, the loan award may be used to pay the one year salary of a newly recruited CEO in one of their Michigan-based portfolio companies. The CEO Placement 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 |
| MGCS: Call for Presenting Companies
Spread the Word... |
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Who should apply?
Companies, representing industries ranging from information technology, life sciences, and alternative energy, will present for an audience of venture capitalists, angel investors and institutional investors. These companies represent high potential opportunities in the Midwest at various stages of development from commercialization deals through start up to later-stage operating companies. Companies will be selected based on market opportunity, competitive advantage, management team, intellectual property and financial model.
Companies considered for presenting should meet the following criteria:
--Project $20M in revenue within five years.
--Seek funding in the range of $1M to $20M.
--Preferably have a Midwest connection.
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