State venture capital to be put to work. Fund raises $200 million to bolster young tech companies

A new, state-backed fund designed as a catalyst to attract more venture capital for growing young technology companies in Michigan has raised $200 million and is ready to start investing, Gov. Jennifer Granholm is to announce today.

The Venture Michigan Fund I, to be managed by Credit Suisse’s Customized Fund Investment Group, won’t invest directly in companies. Rather, it will invest in other venture capital funds that have a presence in Michigan and that target investments in Michigan-based start-up companies engaged in research, technology, and new product development.

Michigan has been a backwater for venture capital investing compared to VC hotbeds such as California and Massachusetts. As a result, promising research that begins at Michigan universities or companies often ends up being commercialized by entrepreneurs and companies that leave the state to follow the money.

Venture capitalists often like to have their pet projects located nearby.

BY TOM WALSH

FREE PRESS BUSINESS WRITER

Full Story: http://www.freep.com/apps/pbcs.dll/article?AID=/20060828/BUSINESS06/608280389