Talk about venture capital in Michigan, and Arboretum Ventures quickly emerges as one of the biggest players. The downtown Ann Arbor-based venture capital firm is securing its place in those conversations, locking down $140 million for its third investment fund.
"It was an oversubscribed fund," says Paul McCreadie, principal of
Arboretum Ventures. "We had been targeting $125 million."
Arboretum Ventures has scored some
big victories in recent years, creating nine-figure exits with the likes of HealthMedia, HandyLab and
Accuri Cytometers. All of those start-ups were born and bred in Ann Arbor.
"We have a strong preference for investing in local companies," McCreadie says. "We have had a lot of success investing in Michigan companies."
The nine-year-old firm currently employs 10 people after making two new hires this year. It plans to make one more hire within the next year. All of those people will work on
Arboretum Ventures' investment portfolio, which is stocked with medical technology and healthcare IT start-ups. It expects to make 15 new investments with this latest fund over the next 4-5 years.
This newest fund attracted a number of repeat investors and some new ones. New investors had to be able to make an investment of at least $1 million to become a part of it while older investors had the option of coming in for less. The third fund also includes a couple of state-run pension funds and 4-5 foundations.
"It's really quite a big mix," McCreadie says. "About 10 investors comprise 80 percent of the fund."
Source: Paul McCreadie, principal of Arboretum Ventures
Writer: Jon Zemke
Read more about Metro Detroit's growing entrepreneurial ecosystem at
SEMichiganStartup.com.
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