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Ann Arbor start-ups take $90M in VC funds year-to-date

Wednesday, September 01, 2010

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Ann Arbor

Venture capital spending is up in Michigan, and Ann Arbor start-ups are proving to be king of the hill.

Year-to-date, Michigan-based firms have attracted $123 million in venture capital investment, with Ann Arbor-based companies taking in about $90 million of the total. The biggest investment ($51.75 million) went to Cerenis Therapeutics, a bio-tech firm with twin headquarters in France and Ann Arbor that's composed mostly of ex-Pfizer employees.

"This is a testament to the quality of companies that Michigan is creating," says LeAnn Auer, executive director of the Michigan Venture Capital Association.

The total dollar amount invested is up 35 percent compared to 2009 year-to-date. However, the number of deals is lower, with 12 by August of last year and 10 so far this year. Life science firms took in the biggest chunks, with 57 percent of the total investment dollars last year and 75 percent so far this year. Cleantech firms were the only other ones to capture double-digit shares over each of the last two years. Other firms, including IT, received token amounts.

The jump in venture capital investment can be attributed to economic improvements over the last year. A double-digit recession could force a drop in those numbers, Auer says, but barring that she expects to see a steady increase in the near future.

"Over the last few years we have had a couple of investment firms that have capitalized," she says. "Now they're being active."

Source: LeAnn Auer, executive director of the Michigan Venture Capital Association
Writer: Jon Zemke