In projects involving local talent, investors can get just as excited as entrepreneurs. That became evident on December 15, when the Center for Entrepreneurship & Innovation, along with partnering sponsors, brought together 170 eager investors, fund managers, and business professionals for Invest Locally, Invest Profitably, an event that highlighted the wealth of investment opportunities in West Michigan.
In his opening address on atypical l investing, Michigan native Tom Groos, a partner at City Light Capital, a New York City-based venture capital firm, emphasized patience, discipline, passion, and understanding as crucial to realizing substantial long-term returns after periods of short-term volatility. Reaffirming this point in a later presentation, Dr. Mahendra Ramsinghani, manager of Invest Detroit–First Step Fund, stated that since 2007, over $200 million has been invested in Michigan companies, and nine companies have had what experts call “successful exits” valued at $940 million.
Of course, no investment comes without risk, and Groos recommended planning for the worst scenario by setting a “stop-loss” point. He also noted that atypical investing can provide diversification, supplement an investor’s financial portfolio, and produce nonfinancial rewards. For example, City Light Capital invests in energy and environmental projects whose global mission reaches far beyond financial returns. “There is no trade-off between doing good and making money,” explained Groos. “Investors can have both.”
Event participants were able to sit in on panel discussions by representatives from notable Michigan investment firms on topics including angel investing, later-stage private equity, early-stage venture capital, and real estate syndication. John Kerschen, managing director of the Michigan Accelerator Fund-1, noted that each form of investing provides unique advantages and risks. Questions ranged from investment time frames to levels of returns expected to the role an investor plays in the investments a fund will pursue. Panelists stressed the importance of knowing who the investor will be working with, whether that be a fund manager, property manager, or fellow angel investor.
The day closed with a recap of Michigan’s entrepreneurial scene. The state is becoming a hotbed for innovation and technology companies, but investors must be prepared to handle some volatility in return. “Investors should be prepared to lose money in eight of ten opportunities in a portfolio,” remarked Dr. Ramsinghani, who discussed the bittersweet nature of atypical investing. He called for strong leadership in enticing potential investors in West Michigan.
Paul Brown, vice president of the Capital Markets Group with the Michigan Economic Development Corporation, gave the day’s final presentation and emphasized the state’s efforts to fund the programs that make quality investing possible.
The Center for Entrepreneurship & Innovation hopes this will become a recurring event to keep local investors interested in local opportunities.
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