A $500,000 state grant will help relaunch a statewide fellowship program to develop new talent for Michigan’s venture capital industry.
The Michigan Strategic Fund board today approved the funding for the Michigan Venture Capital Association to renew the fellowship program that ran from 2011 through 2018.
MVCA Executive Director Ara Topouzian hopes to relaunch the program as soon as possible.
“The good news is that we’ve done this before, so it was a matter of tweaking the program and we’ve done a lot of that ahead of time already. I think we can be getting it up in short order,” Topouzian told MiBiz. “It’s a big win for the ecosystem, for sure. It will help fund a new generation of investors.”
The state grant will support placing eight people into fellowship positions at venture capital firms in Michigan. The MVCA will begin the application process soon and “a lot of interested firms” have contacted Topouzian about participating. Twenty-two individuals previously participated in the fellowship program from 2011 through 2018, according to the MVCA.
The MVCA will soon put out additional program information, including eligibility requirements, he said.
The grant funding will last for one year, although the Michigan Strategic Fund may provide additional financial support in subsequent years to support the fellowship program.
“This was a program that was so successful in the past. It does so much for the Michigan ecosystem, bringing more investors, more diverse members into the mix, and we want them to stay here and invest in the entrepreneurial community,” Topouzian said. “If we do well the first time, there will be, hopefully, additional funding that will allow us to continue the program.”
The fellowship program has been structured with a focus on diversity, equity, and inclusion. Creating greater diversity among venture capital professionals working in the state “will ensure Michigan’s ecosystem of investments will also be diverse,” according to an MVCA announcement on the grant award.
As of 2021, 81 venture capital professionals were working in Michigan, according to the MVCA’s most recent annual research report. That’s down from nearly 100 five years earlier.
Of the investment professionals in 2021, 14 were women and 14 were people of color, according to the MVCA report for 2021.
Michigan has “significant demand … for young professionals with career aspirations in venture capital,” according to a memo on the funding proposal from Kerry Ebersole Singh, executive vice president and chief talent and engagement officer at the Michigan Economic Development Corp.
In providing the grant funding, the MEDC aims to “foster a candidate pool to support the needs of Michigan’s VCs and their portfolio companies” by “creating a broad network of venture fellow talent, establish Michigan as the leader in supporting talent in the venture capital entrepreneurial ecosystem, and accelerate growth of startups,” Ebersole Singh wrote.
“Although Michigan’s many business colleges and MBA programs produce qualified candidates, much of this talent is exported to other states. Many venture capital firms need associate-level resources, however, the economics of smaller venture funds do not allow for hiring full-time talent at competing market salaries,” she said. “With matching funds for salaries for the fellows, the Venture Fellows Program is designed to increase the number of venture professionals in Michigan, helping to accelerate the fundraising and deployment of capital into early-stage companies.”
Across Michigan last year, venture capital investors put more money into Michigan-based companies than in 2021, even as deal volume declined, MiBiz previously reported.
The VC sector invested $1.16 billion into companies in the state in 2022, an increase of more than 9 percent from the $1.06 billion invested in the prior year, according to a quarterly report from Pitchbook and the National Venture Capital Association. The 162 deals funded in Michigan in 2022 marked a decline of nearly 16 percent from 2021.