Okay, admit it -- as the weekend approaches, you can think of more
exciting things than reading about yet another conference.
Well, so can I. But hang in here with me for a moment, because this one
is the real deal, when it comes to Michigan's future.

Last week, Detroit hosted the 15th annual conference of the National
Association of Seed and Venture Funds. These are, in fact, the folks who
help the companies that will become the Microsofts and General Motors of
the next generation to be born.

Three hundred or so folks who invest in startup and newly developing
companies came to listen to state and national venture capital experts,
including Ann Arbor's Tim Petersen (Arboretum Ventures, L.L.C.) and Mary
Campbell (EDF Ventures).  They got tips from Dan Gilbert of Livonia-based Quicken Loans Inc., and
Josh Linkner, founder of ePrize L. L. C. of Pleasant Ridge.

For a struggling Michigan, holding this conference here and now was
critically important. Tom Kinnear summed it up best. He, by the way, is
the Eugene Applebaum Professor of Entrepreneurial Studies at the
University of Michigan's business school.  Not to mention an authority on venture capital, technology transfer and
entrepreneurship. "This conference puts Michigan on the national venture
capital radar screen," he said.
That is vitally important, because it hints at the prospect of new life
when the dinosaurs are dying. These are dire days for Michigan: Our
state leads the nation in unemployment. The auto companies, frantic to
shed even more workers, are trying to save themselves by scoring $25
billion in low-interest loans from Washington. Even in the best-case
scenario, they will never be what they once were.

All of which means that making progress scoring in the world of venture
capital and helping local start-up companies is the single most
important sign of better things to come in Michigan.

The news is pretty good overall. The amount of venture capital being
managed by Michigan companies is now around $900 million, up more than
70 percent since 2001, according to the Michigan Venture Capital Report.
There were seven VC firms in Michigan in 2001; today there are 17, with
investments in life sciences, information technology and alternative
energy.

"It's really exciting around here. Michigan is coming to life,"
enthuses Kinnear, who has been watching the state's hesitant progress in
venture capital for many years. "There are lots of deals here worth
funding: medical devices, electric and information technology,
materials, software. Compared to the coasts, we're not particularly big,
but things are a lot better than they used to be."

No Michigan firm can bankroll a huge deal on its own. The largest
Michigan VC firm has around $100 million to invest, which isn't enough
to enable them to be the lead investor in big deals.

But that is enough to qualify for a place at the table, when syndicates
are being put together by several firms.

These are adventurous souls. Venture capitalists, like daring start-up
entrepreneurs, tend to be freebooting buccaneers who believe stoutly
that the proper relationship of their work to government is none
whatsoever.

"All government does is just get in the way," one hard-driving start up
manager told me. But in Michigan even government's attempts to help out
seem to be working. The Michigan Economic Development Corporation (MEDC)
was one of the sponsors of last week's gathering. With MEDC support, the
state launched in 2006 the Venture Michigan Fund and the Michigan 21st
Century Investment Fund, two programs with more than $200 million for
early stage investing. The Venture fund is guaranteed by state tax
vouchers, while the 21st Century Fund uses state money coming from the
national tobacco settlement. Both funds are managed by the highly
respected New York firm, Credit Suisse.

This is a sign that we are getting beyond a historic impasse that has
helped paralyze progress in this state. For many years, we had a classic
"Catch 22" -- entrepreneurs in Michigan griped about the lack of venture
capital funds in our state. Meanwhile, VC types grumbled there weren't
any good places to invest in.

Now, according to Kinnear, "there is a lot of technology coming out of
the research universities - the U of M, Michigan State - and places like
the Van Andel Institute in Grand Rapids.

New technology draws venture capital firms, as Kinnear observed, "and
it has led to significant 'angel fund' activity in the state." Angel
funds are informal groups of investors who get together, share
expertise, compare notes and make initial investments in little start up
companies. Today, angel groups in Ann Arbor, Oakland County, Kalamazoo,
Grand Rapids and perhaps elsewhere are adding their heft to more
traditional venture capital operations.

All this is wonderful news. Certainly, powerful roots in manufacturing
and the automobile industry will continue to be a large and important
part of Michigan's economic mix.

But the majority of new jobs in the future will come from new companies
that are starting small - just the ones that need start-up seed money
and venture funding. Last week's conference offers powerful and
encouraging evidence that Michigan is making real progress at last, and
not a moment too soon.