Michigan Capital Network raises target for next VC fund to $35M, citing strong interest

GRAND RAPIDS — Strong interest from investors led Michigan Capital Network to expand the size of its new venture capital fund, the organization’s fourth since its inception.

The Grand Rapids-based Michigan Capital Network filed documents today informing federal securities regulators that it raised the fundraising target for Michigan Capital Network Venture Fund IV L.P. to $35 million from the original $25 million.

Paul D’Amato, CEO and managing partner of Michigan Capital Network. (COURTESY PHOTO)

The investment group set the higher amount for the fourth fund after raising $23.7 million so far over 14 months, according to a filing with the U.S. Securities and Exchange Commission. The federal regulatory filing indicated the amount came from 81 investors.

Michigan Capital Network raised the funds as venture capital investing continues to grow both within Michigan and nationally, said CEO and Managing Director Paul D’Amato.

“There generally has been stronger interest in venture capital nationwide and in Michigan over the last few years,” D’Amato said. “Venture capital is growing and it’s gained a lot of new investment.”

Michigan Capital Network manages four venture funds and five affiliated angel investor groups: Grand Angels in Grand Rapids, Ka-zoo Angels in Kalamazoo, Woodward Angels in Detroit, Flint Angels and BlueWater Angels in Midland.

D’Amato called the commitments to the fourth fund a “great amount.” Investors include high net worth individuals, family offices and institutional investors. 

“We’re thrilled with the support and it’ll let us really get out there and make an impact in the Michigan ecosystem,” D’Amato said. “It’s going to be exciting to be able to support some amazing Michigan companies.”

Michigan Capital Network focuses on seed- and A-round investments, often in tandem with other investors, for startups primarily involved in life sciences, advanced manufacturing and software, which are sectors “relevant for Michigan and they’re the centers that in many ways Michigan has the strongest capabilities.” D’Amato also cited the strong startup activity and support at the state’s universities for those industries. 

Since forming 18 years ago as Grand Angels, Michigan Capital Network’s angel groups and the first three venture capital funds have collectively invested millions in more than 100 startup companies that collectively have created 2,000 jobs. The first three venture capital funds accounted for half of the investments and have recorded 18 exits, D’Amato said. 

The ranks of successful startup companies that the venture capital funds have backed include Grand River Aseptic Manufacturing Inc., Tetra Therapeutics Inc., Facility Health Inc., and HealthBridge Financial Inc.

The fund’s latest startup investments are in Quint Workspaces LLC, a Zeeland-based producer of home office furnishings; Midland-based water filtration company Accelerated Filtration Inc.; and Holland-based Wedge LLC, which developed a one-way video interview platform intended to streamline recruiting. 

As Michigan Capital Network continues to raise capital for the fourth fund, the pipeline for prospective investments remains strong, D’Amato said.

“We’re seeing a lot of really exciting companies in Michigan and the surrounding area,” he said.