To stir growth state needs to take venture capital risks

Given the economic challenges that both Michigan and the nation are facing, we need to remain both optimistic and realistic about growth. We must continue to believe in the long-term importance and vitality of the region. With the right strategic support from our business community and the political community, we can thrive and succeed.

It will take some belt-tightening, creative dialogue and dedicating resources where they will have the most leverage. We must face these challenges together, using our collective talents and available resources with a resolve and will that won't weaken when the clouds roll in.

One of the challenges that our area faces is the struggle to obtain a greater share of the venture capital industry. This is where taking risks becomes a necessity to gain footing.

Long ago, the influx of population in Michigan came from risk takers. They were in search of jobs, focused on the automotive industry and the five-dollar wage. The industry was wildly successful, and venture capital wasn't a huge priority or focus for many years.

Banks were successful financing the manufacturing economy versus the emerging service and knowledge sector. We were more focused on brick and mortar, hard asset financing for mature and stable companies. But with the right ingredients here in Michigan, banks and other partners can support and nurture new businesses and those entrepreneurial innovators who will ultimately enable economic growth, and spur the growth of venture capital committed to our region.

There are of course, glimmers of positive evidence that these risks are already happening. The Plymouth Management Co. is going to base its $30 million venture capital fund at Oakland University's Smartphone business incubator, OU Inc. The question now is "how quickly can we accelerate this?"

Investing in venture capital carries a risk, with each dollar a strategic step toward reinvigorating the economy.

For every $1 million in venture capital investment, 27 new jobs are brought to the community.

Venture capital-generated companies have also historically had a higher return, and those companies backed by venture capital outperform other companies nationally.

We're putting in risk capital, but we believe in the success of venture capital and that Michigan needs more of it. By continuing to put capital back into the community, we're taking action, delivering a solution and a model that will foster future growth. We hope other members of the financial and business community will agree and join.

We remain optimistic, as we take these risks, that they are providing a vital ingredient to create a new model for business in Michigan.

http://detnews.com/apps/pbcs.dll/article?AID=/20080611/OPINION01/806110310

Business Financial Services

To stir growth state needs to take venture capital risks